Chow Tai Fook Jewellery Group Ltd, the world's largest jewellery retailer by market value, posted a 10 percent drop in third-quarter retail sales on Thursday, hit by unrest in Hong Kong, and said the current quarter would also be weak.
The company said retail sales in Hong Kong, Macau and all other markets excluding China dropped 16 percent in the three months ended Dec. 31, which was the first reporting period reflecting the full impact of the pro-democracy protests in Hong Kong. Chinese retail sales were down 6 percent.
"We are disappointed with the performance in the third quarter," Finance Director Hamilton Cheng told journalists on a conference call. "Occupy Central did have an impact and consumer confidence needs time to rebuild."
Same-store sales fell 18 percent during the quarter, with Hong Kong, Macau and other non-China markets down 21 percent, while the mainland was down 15 percent. Gold product sales continued to be less than they were last year, the company said.
"The weak sentiment will extend to the fourth quarter," said managing director Kent Wong, with China's crackdown on lavish spending and a growing number of Chinese customers shopping abroad expected to continue impacting sales.
The data came a week after Hong Kong posted a better-than-expected 4.1 percent rise in November retail sales values as consumer sentiment stabilized. Sales of jewellery and watches slid 2 percent after a 11.5 percent fall in October.
Chow Tai Fook, which competes with Cartier and Tiffany & Co , felt the impact of the pro-democracy demonstrations that paralysed parts of Hong Kong and scared off mainland Chinese tourists for more than 2-1/2 months. It said its Hong Kong same-store sales for October fell 24 percent.
Smaller rival Luk Fook Holdings and operator of Harvey Nichols department stores in Hong Kong, Dickson Concepts , had also flagged a hit from the protests.
Authorities cleared the last of three pro-democracy protest sites in prime shopping district Causeway Bay on Dec. 15, marking the end of the months-long protests.
The retail sector seems to be stabilizing now. Apparel retailer Bauhaus International (Holdings) Ltd on Wednesday posted a 6 percent rise in same-store sales in Hong Kong and Macau for the three months ended in December, while China was up 9 percent.
Luxury retailers are still feeling pressure from Beijing's ongoing anti-corruption campaign, however, which has seen many Chinese visitors curb lavish spending in Hong Kong.