HONG KONG • Chow Tai Fook Jewellery Group said it plans to shut about 15 of its Hong Kong stores after their leases expire this year, in a sign that major retailers are starting to withdraw from the city's economy as anti-China protests continue.
In the first significant pullback by a luxury retailer after months of demonstrations that have driven tourists away, the world's second-most valuable jewellery chain said in an e-mailed statement yesterday that it will not renew the leases of a "mid-teens" number of stores in the year starting April.
Chow Tai Fook is closing the stores because it expects "macro headwinds" to continue to have an impact in the next six to 12 months, it said.
Besides the protests, volatile gold prices and US-China trade tensions are also weighing on the company's outlook.
The company currently has 86 Chow Tai Fook retail outlets and five stores under other brands in Hong Kong. It is the second-largest jeweller in the world by market value, after Tiffany & Co.
Prominent restaurants and bars have also announced closure plans, while cosmetics retail chain Sa Sa International Holdings said it was likely to shutter 30 stores in Hong Kong this year.
Chow Tai Fook said its store closures will mainly be in tourist districts such as Causeway Bay, Mong Kok and Tsim Sha Tsui, and that it will continue to review store productivity and optimise its retail network in Hong Kong.
The jeweller, controlled by the billionaire Cheng family, has seen same-store sales fall for three consecutive quarters in Hong Kong and Macau. It is now focused on mainland China, where it plans to add 600 new stores in the year ending March 31.