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Hong Kong’s Chow Tai Fook, world’s second-largest jewellery retailer, kicks off mainland China expansion with acquisition of gems maker Enzo
- Acquisition follows announcement on Tuesday that CTF will not renew leases of as many as 15 Hong Kong stores
- Luxury natural coloured gems maker Enzo Jewelry operates 60 stores in China
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Hong Kong-listed Chow Tai Fook Jewellery Group, the world's second-largest jewellery retailer by market value, has acquired mainland Chinese retailer Enzo Jewelry for an undisclosed amount, four days after announcing plans to shut a fifth of its shops in Hong Kong.
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The acquisition is in line with CTF’s focus on expanding in mainland China, a spokesperson said. “Enzo can leverage Chow Tai Fook’s retail and industry know-how to generate greater value to its customers,” Adrian Cheng, its executive director, said in a press statement. Luxury natural coloured gems maker Enzo Jewelry operates 60 stores in China.
CTF said on Tuesday it would not renew leases of as many as 15 of its Hong Kong stores expiring between April this year and March 2021, amid a challenging retail landscape. The city’s economy slipped into a technical recession in October, as it faced its worst political crisis in the second half of 2019, initially triggered by the now-withdrawn extradition bill.
Retail sales of luxury items such as jewellery and watches plummeted by a staggering 43.5 per cent in November year on year, according to government data.
Earlier, in October, CTF signed a lease contract for a 3,068 sq ft shop on Russell Street in Causeway Bay, the world’s most expensive shopping location. It will pay a monthly rent of HK$1.3 million (US$167,340) to Emperor International Holdings, the landlord, which represents a 19 per cent discount on what cosmetics chain Bonjour Holdings, the shop’s previous tenant, paid.
Emperor said it was open to adjusting rents upon renewal. It had offered rent cuts ranging from one month to half-yearly arrangements, Alex Yeung, its executive director, said on Friday. “We are in close communication with our tenants, if they need short-term measures to ease the pressure they face in the retail environment. So far, our commercial retail occupancy rate is still above 90 per cent,” he said.
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