Rare gold rush helps Luk Fook Holdings achieve record revenue

Luk Fook's chief executive Wong Wai-sheung told a post-results briefing yesterday that its record half-year revenue of HK$10 billion and 72.9 per cent jump in net profit to HK$965 million came from a gold rush "that may happen only once in many years".

The jump in net profit in the six months to September also reflected a marked improvement from the first half of the previous fiscal year, when net profit fell 22.4 per cent to HK$558.2 million because of a substantial slowdown in sales in Hong Kong and Macau.

The group said it would continue to aggressively expand into the mainland and would also open its first store in Sydney, Australia, next month.

Mainland visitors accounted for 60 per cent of the group's retail sales locally, and revenue from its mainland operations contributed 21 per cent of total revenue, which rose 70 per cent.

Luk Fook opened five self-operated shops on the mainland in the first half, including a 16,000 square foot flagship store in Wuhan in June, and saw revenue grow on the mainland by 66.8 per cent year on year.

It plans to open more mainland shops targeting those living in second-tier cities.

"We will open a new shop in Chengdu next month," deputy general manager Shirley Wong Hau-yeung said. "Shoppers in medium-sized cities on the mainland have already visited our shops in Hong Kong and are familiar with our brand. We see high potential for growth in these strategic areas."

The group saw sales fall between July and September after the earlier gold rush but expected another spike in demand from wedding and celebration-related sales next year, which will feature a "double spring" and a "leap month" in the lunar calendar, combined with Valentine's Day and the Lantern Festival or Chinese Valentine's Day occurring on the same day.

Luk Fook has 1,188 shops around the world, with 1,132 shops (79 self-operated and 1,053 licensed) on the mainland, 42 in Hong Kong, 10 in Macau, one in Singapore and three in North America.