Jewelry Giant Zhou Dafu And Lufu Jewelry Performance Crisis

Jewellery giant Zhou Dafu Jewelry Group issued a profit warning notice, expected profit or decrease of 50%, the surplus police dragged down Zhou Dafu's share price fell for the two consecutive day, reaching the lowest price since 2011.

Subsequently, another jewellery brand, Lufu group, also issued a profit warning. The median profit is expected to drop by about 40% on a year-on-year basis.

Although the two jewellery listed companies in Hongkong issued a profit warning, the reason is that the consumption of local consumers in Hongkong is insufficient, and the proportion and willingness of the mainland to Hong Kong to reduce consumption lead to a decline in gross profit. However, reporters interviewed many domestic jewelry salesmen all said that the jewelry industry is not optimistic this year.

In fact, the diversified demand of consumers is accelerating the pformation of traditional jewelry industry.

The profit early-warning of Zhou Dafu and Lufu Jewelry Group represents the current situation of jewelry industry in China to a certain extent.

The industry told reporters that gold products are still the backbone of the local jewellery industry, and the traffic volume of Beijing Caishikou department store is a barometer of the jewelry industry's prosperity index.

The reporter walked into the vegetable shop, still "bustling", the first floor of the gold counter full of gold shopping customers.

But if you compare the traffic volume with the same period one or two years ago, you can still see a lot less.

In October 2012, gold prices remained high, at about 370 yuan per gram, while gold jewelry prices reached about 410 yuan / gram, but customers' enthusiasm for buying gold products and gold jewelry was high.

Today, the price of gold has fallen all the way, the price of jewelry is less than 300 yuan / gram, but on the contrary, consumers' enthusiasm for buying is gradually decreasing.

Besides jewelry stores such as Zhou Dafu, Liu Fu and Cai Bai, the volume of visitors is less than that of previous years.

The proportion of gold products in total sales of brands continues to increase, while the actual sales volume of this category is declining, which directly affects the sales data of jewelry brands.

The development of local brands in rare jewel inlay products is slow, only relying on a single gold product is one of the most important factors for the development of the industry.

Zhou Dafu can be said to be the most influential luxury group in China.

In the second half of this year, DDT, an international consultancy, released the 2015 global luxury report and ranked the 100 luxury companies in the world according to its revenue. Zhou Dafu ranked fourth in annual sales of $9 billion 979 million, ahead of the LVMH group, the peak group and Estee Lauder group.

Even the famous Swatch group and Kai Yun group are ranked behind Zhou Dafu.

However, this family

The days of giants in 2015 did not seem to be good.

In his earnings warning, Zhou Dafu said that in the 6 months ended September 30th, the company's profit is expected to decrease by about 40% to 50% over the same period last year. There are two reasons: first, the weak consumption in Hongkong and Macao, resulting in a year-on-year decline in turnover and two in gross profit margin.

The reason for the decline in gross profit margin is the increase in the proportion of gold products, as well as a record of gold hedging in the period (the same period last year).

The group has said that it plans to add 150~160 retail outlets to the mainland market in fiscal year 2016, and declared in its earnings report: "at this stage, we should not only stabilize the market of the two or three tier cities, but also continue to implement the channel sinking strategy, opening new stores in cities, townships and towns that meet the population of 200 thousand and 300 thousand."

However, this successful marketing strategy that once promoted Zhou Dafu's rapid growth has become the biggest burden of brand this year.

A jewelry salesperson in the industry told reporters, "opening a jewelry store depends on" raising ". Generally, the new shop does not earn money in 35 years. It is normal that the old shop will have more profits, and in a short time, it will depend on the old shop to maintain a new store.

While Zhou Dafu is currently in the Chinese market intensive shop strategy, many shops are still "young" has not yet entered the best profit period. During this period, the downturn in the retail industry and jewelry industry in Hongkong has led to a sharp reduction in the efficiency of the old stores. The balance of "keeping the old with the new" is expected to be broken. At the same time, the economic factors such as the fluctuation of the gold price have led to the decline of Zhou Dafu's performance.

Another jewellery giant

Although the distribution of outlets is far below that of Zhou Dafu, the decrease in jewellery revenues and the increase in the proportion of gold sales have led to a decline in gross margin. This same situation with Zhou Dafu has brought down its sales performance.

Hu Zhiliang, director of CIC's industry and Policy Research Center, said: "with the construction of inland free trade zones and the rapid development of haotao, Hong Kong and Macao have gradually lost their advantages of tax haven, and the recent high exchange rate of the Hong Kong dollar has weakened the attractiveness of Hongkong to consumers and has a negative impact on the jewelry retail industry to a certain extent."