Core Viewpoint - The gold retail sector is experiencing mixed results amid rising gold prices, with some companies reporting positive growth in retail value and net profit, while facing challenges from store closures, particularly among franchise outlets [1][5][10]. Group 1: Financial Performance - Chow Tai Fook's retail value increased by 4.1% year-on-year in Q3, while Luk Fook's overall retail value rose by 18% [1][6]. - Zhou Dasheng reported a net profit growth of 13.57% attributable to the high gold prices and increased consumer spending [1][6]. - Despite the growth in retail value, the number of closed stores continues to rise, with Chow Tai Fook closing 296 stores and Luk Fook closing 49 stores in Q3 [1][12]. Group 2: Market Dynamics - The increase in retail value is supported by three main factors: high gold prices leading to higher average transaction values, an increase in the proportion of priced products sold, and strong growth in e-commerce channels [6][7]. - In Q3, Chow Tai Fook's same-store sales in mainland China grew by 7.6%, while same-store sales volume decreased by 8.6%, indicating a shift towards higher-priced items [6][7]. - E-commerce sales for Chow Tai Fook grew by 28.1% year-on-year, contributing significantly to overall retail value despite a general slowdown in physical store performance [7][8]. Group 3: Franchise Model Challenges - The franchise model, which has been a key growth strategy for many gold jewelry brands, is facing scrutiny as many franchise stores are underperforming and closing [1][10][12]. - As of September 30, Chow Tai Fook had 6,041 stores globally, with over 4,000 being franchise stores, highlighting the reliance on this model [11]. - The trend shows a shift towards increasing self-operated stores, with Zhou Dasheng opening 47 self-operated stores in the first nine months of the year, while closing 333 stores overall [14].
周大福、周大生们迎零售大变局