Chow Tai Fook (1929) says a gold-price tumble and political uncertainties dragged on jewelry exports last year but sees a brighter retail outlook.
Managing director Kent Wong Siu- kee said sales in the second half of last year improved. Higher exports this year and a strong marriage season may boost demand. Wong also expects a retail sales fall in Hong Kong during the second half, a viewed shared by investment houses.
Hong Kong's retail sales are expected to show a low single-digit drop this year, said China/Hong Kong consumer sector analyst Mavis Hui, from DBS Vickers (Hong Kong).
Due to the low base effect, the local retail industry in 2017 will improve from last year. But the Hong Kong dollar and US dollar may appreciate while the yuan may depreciate. Hui sees this reducing the consumption of visitors to Hong Kong, leading to a downward trend in retail sales. She also believes the jewelry business should have bottomed out due to rent cuts. If the gold price drops, the gross profit margin can jump further too, said Hui.
Meanwhile, Chinese department store chain Parkson Retail Group (3368) turned from loss to profit of 147.3 million yuan (HK$166.21 million) in 2016 partly because of an increase in direct sales from cosmetics and fashion brands.
Alibaba announced a strategic partnership with Bailian Group, the largest retailer by store numbers, to join the e-commerce giant's drive to use big data to improve sales.
