Diamond World (DW) May - June 2020
Why Covid-19 will make people fall in love with diamonds all over again | Ban is good - Industry welcomes ban on rough imports | Hong Kong jewellery industry show mettle| An Irrevocable Loss - Arun R. Mehta, Rosy Blue Group Why Covid-19 will make people fall in love with diamonds all over again | Ban is good - Industry welcomes ban on rough imports | Hong Kong jewellery industry show mettle| An Irrevocable Loss - Arun R. Mehta, Rosy Blue Group
SPECIAL REPORT I know of a retailer who has created a bench jeweller concept for consumers to build, repair, and/ or polish their rings as a touch of personalization. These are creative ways in which retailers are expanding beyond conventional methods Harsh Maheshwari, Kunming Diamonds lockdown end of January and before that we were shut because of Chinese New Year. We also had the protests, so Hong Kong has been through a lot. China is doing extremely well. We don’t have a presence there but our clients from the U.S. and Europe who have stores in China tell us that on some days they have had record breaking sales. This sentiment has not trickled into Hong Kong as yet. We are hearing that the borders will open up in July, may be things will start looking up then,” says Harsh Maheshwari of Kunming Diamonds. The jewellery market in Hong Kong is at least 70 per cent down. Jewellers are working on pending orders as parts of U.S. are opening up. However, India opening up remains crucial to Hong Kong jewellery industry’s health as it is the sourcing hub – if India doesn’t open up, it will heavily affect the supply chain and operation will not be smooth. largely depends on inflow of tourists from China and anywhere else in the world. Jewellery and watch sales plummeted by 69.7 per cent to HKD 2.02 billion ($261 million) in May. HK’s largest jeweller Chow Tai Fook reported a 36.6% drop in profit but is still optimistic about demand in Mainland China. The retail giant is planning to close at least 10-15 stores in HK and Macau, however, as demand from China seems to be steady, the company plans to expand using the franchise model, aiming to open 400- 450 more points of sales by the end March 2021. Retailer Luk Fook is also struggling. The decline of same-store Retail needs resurgence Closure of Mainland border due to Covid-19 has affected retail sales in Hong Kong to a large extent as the city Earrings, Oriental Gemco 90 | may-june 2020 | DiamonD WorlD
SPECIAL REPORT sales in the first three weeks narrowed to around 60 percent, while overall shops in the mainland market showed progressive improvements with a less than 20-percent decline in June as compared to the 20-per-cent drop in April to May and 40-per-cent drop in March. The retailer will close five stores in Hong Kong and open two in Macau. Tse Sui Luen (TSL) reported HKD 89.8 million ($11.6 million) loss for the 12 months ending March 2020. The company stated that it has been one of the most difficult years, citing the backdrop of US-China trade war as one of the major reasons for a steady decline in sales. Before the onslaught of the novel coronavirus and the protests, TSL opened four stores in HK. However, with the crisis at hand, the company has realigned its business strategy and cost effectiveness remains a key priority. Many retailers have negotiated with their landlords – their rents have been significantly cut to tide through the current period. “For most retailers around the world, things are looking bad and Hong Kong is no different. When we ask for payments they want to return the goods. But we are cooperating with them. We are being patient and extending the credit by six months. I do believe that nothing will change before second quarter of 2021. So, if retailers don’t get support from suppliers and owners of the place they are renting, they won’t be able to survive,” says Nigam. Primed for innovation When the going gets tough, the tough gets going. Hong Kong has been a centre for gems and jewellery for many years and businesses have gotten complacent – a Ring, Oriental Gemco The Government has given subsidies and salary packages to support the employees. They have given $9000 to each employee in Hong Kong every month, this will continue for 6 months. India opening up is crucial as it is the hub of sourcing. There will be major issues if India doesn’t open up as supply chain will get affected Zulu Ghevriya, Prism Group DiamonD WorlD | may-june 2020 | 91
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SPECIAL REPORT<br />
sales in the first three weeks narrowed to<br />
around 60 percent, while overall shops in<br />
the mainland market showed progressive<br />
improvements with a less than 20-percent<br />
decline in <strong>June</strong> as compared to the<br />
20-per-cent drop in April to <strong>May</strong> and<br />
40-per-cent drop in March. The retailer<br />
will close five stores in Hong Kong and<br />
open two in Macau.<br />
Tse Sui Luen (TSL) reported HKD<br />
89.8 million ($11.6 million) loss for the<br />
12 months ending March <strong>2020</strong>. The<br />
company stated that it has been one<br />
of the most difficult years, citing the<br />
backdrop of US-China trade war as one<br />
of the major reasons for a steady decline<br />
in sales. Before the onslaught of the<br />
novel coronavirus and the protests, TSL<br />
opened four stores in HK. However,<br />
with the crisis at hand, the company has<br />
realigned its business strategy and cost<br />
effectiveness remains a key priority.<br />
Many retailers have negotiated with<br />
their landlords – their rents have been<br />
significantly cut to tide through the<br />
current period. “For most retailers<br />
around the world, things are looking bad<br />
and Hong Kong is no different. When<br />
we ask for payments they want to return<br />
the goods. But we are cooperating with<br />
them. We are being patient and extending<br />
the credit by six months. I do believe<br />
that nothing will change before second<br />
quarter of 2021. So, if retailers don’t get<br />
support from suppliers and owners of the<br />
place they are renting, they won’t be able<br />
to survive,” says Nigam.<br />
Primed for innovation<br />
When the going gets tough, the tough gets<br />
going. Hong Kong has been a centre for<br />
gems and jewellery for many years and<br />
businesses have gotten complacent – a<br />
Ring, Oriental Gemco<br />
The Government<br />
has given subsidies<br />
and salary packages<br />
to support the<br />
employees. They<br />
have given $9000<br />
to each employee<br />
in Hong Kong<br />
every month, this<br />
will continue for<br />
6 months. India<br />
opening up is<br />
crucial as it is the<br />
hub of sourcing.<br />
There will be major<br />
issues if India<br />
doesn’t open up as<br />
supply chain will<br />
get affected<br />
Zulu Ghevriya,<br />
Prism Group<br />
DiamonD WorlD | may-june <strong>2020</strong> | 91
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