China, long known for its strong demand for gold, is now seeing challenges even in this sector as it grapples with an ongoing economic slowdown. Chow Tai Fook, one of the world’s largest jewelry brands, reported a 20% drop in sales across Greater China compared to the previous year. As a result, the company has been forced to close 239 stores in the past six months.
Chow Tai Fook’s latest financial results for the first half of the 2025 fiscal year (April to September 2024), released on Wednesday, reveal the full extent of the downturn. Sales for the period dropped by 20.4%, totaling HKD 39.48 billion (roughly USD 5.07 billion). Net profit also significantly hit, falling 44.4% to HKD 2.53 billion (about USD 325 million).
The company, which operates 6,968 stores across mainland China, has seen a marked reduction in its retail network, closing 293 locations over the last six months. Three have now closed in Hong Kong and Macau, where 84 stores were previously operated.
Reports from Diyi Caijing note that the broader jewelry retail sector in China is facing a closure rush as more stores respond to falling sales by closing down operations.
Securities analysts attribute this decline to a shift in the industry that began in 2017. According to one analyst, jewelry brands like Chow Tai Fook, once known for their rapid expansion, are now struggling. “The market has become saturated, and with profit margins shrinking, the years of aggressive growth in the jewelry sector are coming to an end,” the analyst said.
A recent survey by the World Gold Council reveals that around 40% of jewelry retailers plan to scale back their gold inventories in response to sluggish demand for gold and jewelry. The survey points to a wider trend of declining inventory turnover as businesses brace for uncertainty in the luxury goods market in the years ahead.