Sou Hu Cai Jing·2025-11-12 15:35Core Viewpoint - The rising gold prices are leading to a significant reduction in the number of gold retail stores in China, particularly among major brands, as they shift focus from quantity to efficiency and brand experience [4][5]. Group 1: Impact of High Gold Prices - As of November 11, gold prices have surged, with several brands reporting prices exceeding 1300 RMB per gram [6]. - Major brands are closing inefficient franchise stores while increasing self-operated and experiential stores, indicating a shift from expansion to efficiency [6][7]. - The number of closed stores among leading brands has reached nearly 2000 this year, primarily affecting franchise outlets [5][6]. Group 2: Franchise Model Challenges - The franchise model, once a growth engine, is now seen as a burden due to rising gold prices, increased rental and labor costs, and a more rational consumer base [8][9]. - Revenue contributions from franchise systems are declining, with major brands like Chow Tai Fook and Chow Sang Sang reporting significant drops in franchise revenue [8][9]. - The shift towards self-operated and e-commerce channels is becoming a growth highlight for these companies [8][9]. Group 3: Strategic Adjustments Post-Store Closures - Companies are exploring new growth avenues such as online sales, e-commerce, and high-end product offerings [10][11]. - Chow Sang Sang is establishing a joint venture to create a live-streaming sales model, aiming to reduce reliance on traditional franchise systems [10]. - Other brands like Lao Feng Xiang are focusing on brand upgrades and entering the luxury market to mitigate cost pressures from rising gold prices [10][11].