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UPDATE 1-Jeweller Chow Tai Fook sees Chinese tourists boosting 2014 sales in HK, Macau
April 14, 2014 / 8:41 AM / 4 years ago

UPDATE 1-Jeweller Chow Tai Fook sees Chinese tourists boosting 2014 sales in HK, Macau

* Sees positive growth in HK, Macau stores sales in coming year

* Says decline in Jan-Mar quarter sales in HK, Macau due to high comparison in 2013

* Aims to continue expansion, adding 200 new stores a year in coming years

* Shares down to over 4-mth low, in line with overall drop in retailers (Add comments, context, stock price)

HONG KONG, April 14 (Reuters) - Chow Tai Fook Jewellery Group Ltd said on Monday it expected same-store sales to turn positive in Hong Kong and Macau this year, helped by an increase in the number of visitors to both cities from mainland China.

Last week, the world’s most valuable jewellery retailer said same-store sales in both cities fell 9 percent in the fiscal fourth quarter, which ended March 31.

Chairman Henry Cheng told reporters the decline was largely due to the fact that a drop in gold prices in the same year-ago period had sent sales soaring to unusually high levels. He said the anticipated increase in Chinese tourists would help reverse the decline this year.

“As mainland tourists continue to come to Hong Kong, and without the high base effect that dragged down sales in the latest quarter, we are confident that the same stores sales growth for this year will be positive,” Cheng said.

Hong Kong is a popular destination for Chinese shoppers while Macau’s casinos are the main draw for mainland visitors, who have turned the autonomous region into the world’s biggest gambling hub.

A new free trade zone being developed in southern China’s Qinghai region and an increasing population should also help sales in Macau, where Chow Tai Fook has recently established a regional office, Managing Director Kent Wong added.

The number of outbound Chinese tourists hit 100 million last year and is expected to double by 2020, according to a recent report by broker CLSA.

Chow Tai Fook will continue to add 200 new stores a year in the next few years, Cheng said, adding that the jeweller expects overall sales growth to average over 20 percent annually.

Shares in Chow Tai Fook fell over 3 percent to their lowest in more than 4 months, tracking a drop in Hong-Kong listed retailers on concerns about a possible drop in mainland tourist arrivals after media reports that the Hong Kong government had suggested restricting the number of mainland visitors.

The stock trimmed losses to end at HK$11.30 ($1.46) on Monday, still down 1.4 percent, lagging a 0.15 percent gain in the benchmark Hang Seng Index. ($1 = 7.7531 Hong Kong Dollars) (Reporting by Donny Kwok and Clare Baldwin; Editing by Miral Fahmy)

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