Luk Fook Holdings (International) expects weaker demand for jewellery from mainland consumers this year after strong net profit growth of 54 per cent for the last fiscal year. 'I am not so optimistic about jewellery sales in Hong Kong this year, considering the impact of the European debt crisis and the slowing global economy,' Luk Fook chief executive Wong Wai-sheung said. The Hong Kong-based jewellery retailer recorded single-digit sales growth in January and February compared with 40 per cent in the same period last year, Wong said. He blamed the slow market on lower demand from mainland tourists and a high base last year. Wong expects sales growth to stay at the same level for the whole year. Luk Fook's net profit rose to HK$1.33 billion for the year to March from HK$866 million over the previous year. Revenue grew 47 per cent to HK$11.9 billion for the period. Luk Fook's share price fell 4.6 per cent to HK$15.66 yesterday. The stock has lost up to 43 per cent this year while the Hang Seng Index has edged up 0.7 per cent. Rivals Chow Tai Fook and Chow Sang Sang have also shed 36 and 14 per cent, respectively, this year. Analysts said the jewellery sector had cooled since the end of last year, in step with the decline in international gold prices and the global economic slowdown. As of the end of March, Luk Fook ran 103 self-owned retail outlets in Hong Kong, Macau, the mainland, Singapore, the United States and Canada. It also has 758 franchised shops across the border. During the reporting period, around 60 per cent of the company's sales came from gold and platinum products and the rest from gem-stone products. Hong Kong accounted for around 70 per cent of its business, generating HK$8.28 billion in revenue, while the mainland contributed 18 per cent. But mainland visitors in Hong Kong are a major source of customers for the company, contributing more than half of total sales. Luk Fook said it would remain 'prudently optimistic' on its business growth and outlook this year, which it called 'a challenging year'. In Hong Kong, it will closely monitor changes in retail rents and take stringent cost-control measures to maintain rents at a 'reasonable' level. Meanwhile, the company will continue its 'aggressive yet prudent' expansion in the mainland cities. It declared a final dividend of 43 cents per share for the period.