Business / Companies

Lao Feng Xiang to open new outlet in HK

By Wang Ying (China Daily) Updated: 2015-12-08 10:07

Lao Feng Xiang Co Ltd, one of China's oldest jewelry brands, is opening its largest store yet outside of the Chinese mainland, in Hong Kong - its third launch in the city this year.

Wang Ensheng, its spokesman, said the new 200-square-meter outlet in Mongkok will throw open its doors in time for Christmas shoppers. The site is the Shanghai-based company's sixth outside of the mainland. Its first was opened in Sydney in August 2012.

"Encouraged by the surprisingly positive feedback from Hong Kong consumers, in the next three to five years, we are planning more stores in the city and elsewhere overseas," said Wang, adding that all options are open, including Southeast Asia and Europe.

The company's first HK outlet - in a 75-sq-m site in Tsim Sha Tsui - opened in May and netted an impressive HK$1.3 million ($168,000) in sales on its opening day. A second, 105-sq-m site, opened in Mongkok in August, and it sold HK$1.5 million of goods on its first day. "Almost all our products were sold out on those two opening days, with 70 percent of the customers young shoppers," said Wang.

Unlike its mainland stores, where most sales are made during weekends, he said the two new HK outlets have performed just as well on weekdays. Lao Feng Xiang first planned to take on the HK market a decade ago, but its plans were continually delayed due to competition for suitable retail space, and rising rental costs.

Wang said the three opportunities arose only when outlets were shut down by other retailers, due to sluggish sales resulting from a sharp drop in visitors, and a slowing HK economy in the first six months of this year.

The Hong Kong accessory brand Chow Tai Fook, for instance, is reported to have closed 115 outlets, or about 5 percent of its total number.

"We understand it takes time to develop in a market, so we are not worried if our overseas branches do not make a profit in their early stages," said Wang, adding the company still expects its sales in the mainland to provide the income it needs to continue its ambitions globalization plan.

Founded in 1848, Lao Feng Xiang has seen a dramatic expansion, particularly in past 23 years. In that time its capital assets expanded 181 times in value, sales revenue 430-fold, and profit 124-fold.

In the second quarter of this year, global gold demand dropped 12 percent year-on-year and hit a six-year low, according to the World Gold Council. Lao Feng Xiang, however, still maintained a 4.8 percent growth rate in revenue during the first 10 months of 2015. Its annual domestic sales revenue is now projected to hit 35 billion yuan ($5.46 billion).


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