Luk Fook Group Posts 50% Jump In Profit

In March, the group had 1,268 shops globally, including 45 in Hong Kong, 10 in Macau and 1,208 on the mainland.

The Luk Fook Group announced that annual profit surged 50 percent on the year to a record $240 million, aided by high levels of gold sales after prices of the metal fell last year.

Meanwhile, revenues soared 43 percent to $2.48 billion.

"Last year we had a high base effect with the gold price drop,” said CEO William Wong Wai-sheung. “So compared to 2011 or 2012, a normal year, we are confident there will be growth [this year].”

Chief Financial Officer Kathy Chan said April and May sales dropped 56 percent on the year but that was within forecasts as the period last year saw a 96 percent rise compared with 2012.

Management said rental expenses were a challenge in the local market, as they rose about 60 percent on the year. However, they have leveled out somewhat in recent months.

"If it's not in the prime shopping districts it has actually been reasonable, but in Macau our rental expense is still rising very fast,” Chan said. "In Hong Kong we will work on finding more attractive spaces."

Over the past year, the group has focused on opening landmark stores in prominent locations, including in Wuhan May last year, which serves as the mainland flagship. It also launched its first store in Sydney in December last year.

Wong said Luk Fook's outlook on the Hong Kong market was very cautious. This year the company would open one to three stores in Hong Kong, most likely in the New Territories districts of Sha Tin, Yuen Long or Sheung Shui, which are frequented by more mainland tourists, he said.

The company is unlikely to expand further in Macau in the coming financial year given that it recently opened a flagship outlet there - its largest worldwide.