Hengdeli Says China Luxury Watch Sales Slowing on Economy
Sales growth for high-end watches has slowed to “single digits in recent months,” Vice President Tan Li said in a phone interview today. Sales of mid- to low-end watches are still growing “double digits” and Hengdeli may consider more share buybacks after last month’s repurchases, she said.
Hengdeli, which sells luxury brands such as Breguet and Cartier, joins other Chinese retail companies in reporting a consumer pullback. Chow Tai Fook Jewellery Group Ltd. (1929), the world’s biggest listed jewelry retailer, last month said Chinese shoppers are spending less per transaction.
“If consumers are uncertain about the future, they may put off purchases of big ticket items,” Tan said today.
The world’s second-largest economy expanded 8.1 percent in the first three months of this year, the fifth quarterly deceleration.
Chinese shoppers are also buying more high-end goods on visits to Europe amid a decline in the euro against the Chinese yuan, she said. The euro has dropped about 4 percent against the Chinese currency this year.
Hengdeli fell 7.1 percent to HK$2.21 at the close of trading in Hong Kong. The stock has declined 13 percent this year, lagging the benchmark Hang Seng Index’s 5.4 percent gain.
The company on June 22 repurchased 692,000 shares for HK$1.6 million ($206,000).
It plans to add 40 to 60 new stores in China this year, mostly in second- and third-tier cities.
“We have not scaled back our expansion at this point,” Tan said.
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