Chow Tai Fook Jewellery Group (CTF), China's largest jewelry retailer by market value, has reported a 11% drop in overall retail sales for the three months ended 31 December 2015, driven by a 20% decline in Hong Kong and Macau. Mainland China retail sales fell 6%. CTF says that the decline is, "attributable mainly to the declining visitation of Mainland tourists to Hong Kong and the continual weak local retail sentiment in Hong Kong and Macau." Same-store sales fell 15% as a whole during the quarter, with Hong Kong and Macau down 23% and the Mainland sliding 7%. Gold items, representing 56% of total retail sales value, fell 14% overall, 24% in HK and Macau, and 3% on the Mainland. Gem-set jewelry, representing 28% of total sales, fell 12% overall.
Reuters reports that CTF expects to close 5-6 Hong Kong stores in the fiscal year ending in March, as tourists are put off visiting the city by a strong local currency. Managing Director Kent Wong said that the company would negotiate for lower rents when it renews leases and would see more store closures unless rents were cut in the city's key tourist areas including in Causeway Bay and Tsimshatsui. "Hong Kong remains challenging because of the strong Hong Kong dollar," he told Reuters. "Same-store sales for the current quarter and on the coming Chinese new year (in Hong Kong) can be a decline as we see no sign of recovery yet." Reuters adds that, "The data came days after Hong Kong posted a 7.8% fall in retail sales in November, its ninth consecutive month of decline. Sales of jewellery and watches plunged 20.6% after a 17% fall in October."