Zhou Dafu Is Suffering From Performance Problems.

Zhou Dafu, a jeweller in Hongkong, is suffering from performance problems and has adjusted its huge retail empire.

In the six months ending September 2015, Zhou Dafu closed 115 retail outlets, equivalent to about 5% of the total retail outlets, and opened 29 retail outlets during the period, and the retail network increased to 2286 retail outlets. In the first half of the fiscal year, Zhou Dafu, whose net profit fell by 42.2% last year, plans to continue to integrate some low efficiency retail outlets, mainly located in East China and Southern China.

However, jewellery companies have different views and strategies on the growth of this industry. There are 3000 retail outlets, 00116.HK and Zhou Shengsheng, who have 330 retail outlets in the mainland.

Shi Hongyue, Deputy Secretary General of China jewelry and jade jewelry industry association, told reporters that despite the influence of various factors, the jewelry industry has developed steadily in recent years, but the market structure has changed. Jewelry enterprise Retail channel strategy is divided.

Regarding the planning of retail stores, Zheng Jiachun, chairman of the Zhou Dafu group, said at the mid term business conference that the expansion of the retail outlets in the next 12 months will be more conservative than before, including the integration of inferior stores and slowing down the expansion of retail outlets. The company expects to improve its profitability. In the first half of this year, there are 3 outlets in Hongkong. The Group expects that there will be 7 to 8 branches in the second half of this year to be adjusted or other branches to undertake business.

He stressed that some of them were not in line with the level of operation or too many shops in some areas, and some shops should be closed to focus on the development of existing stores.

"The number of closed stores is higher than the average in the past due to the restructuring of more and more department stores in mainland China in order to adapt to the changing retail consumption preference." Zhou Dafu said. And Shi Hongyue thinks, "the influence of network sale diverts partial consumer, also can let a few enterprises feel the person that enter store drops."

Zhou Dafu's latest first half financial report showed that income fell by 4.1% to HK $28 billion 120 million (US $3 billion 630 million) in the first six months of September 30th compared with the same period last year, while net profit dropped by 42.2% to HK $1 billion 560 million (US $200 million 900 thousand) compared with the same period last year. Whole Same store sales A drop of 8.7%, of which the jewelry business in the mainland and the same store sales in Hong Kong and Macao increased by 0.1% and 18.2% respectively.

"The decrease in turnover and retail sales is mainly due to the continued weakness in the consumption intention of the retail market and the decrease in the number of mainland tourists to Hongkong and Macao." Chow Tai Fook It says.

Due to its poor performance, Zhou Dafu's share price has fallen by nearly 45% since this year, and its market value has evaporated to more than HK $48 billion, and its market value is HK $59 billion.

In the face of Hongkong's growing popularity with mainland tourists, especially the Hakkas, Zhou Dafu Jewelry Group launched its first Outlet outlets in Mong Kok, Hongkong, in October. The main products are jewelry, some of which are priced at only 5~6 of the original price, and the move is expected to attract local customers.

In addition, Zhou Dafu also plans to gain new business opportunities and jewelry retail opportunities by increasing investment across cross-border channels such as cross-border e-commerce and entity stores. It has signed an agreement with New World Development Co and Zhou Dafu Enterprises Limited Affiliated Companies in August 25, 2015 to develop and operate shopping centers in Qianhai, Shenzhen. The shopping center is expected to open in December 2015 with cross-border e-commerce and physical stores.