Chow Tai Fook Jewellery Group Ltd. It plans to expand its presence in the US market in order to sell diamonds to retailers. The company aims to offset the impact of an economic slowdown in China, which has negatively affected the sales of luxury goods, leading to profits, Bloomberg reported fall.
According to Kent Wong (Kent Wong), Managing Director of Chow Tai Fook, his company will sell polished diamonds and rough diamonds other retailers - in contrast to the US subsidiary of Hearts on Fire, which mainly sells its own branded diamond jewelry holders franchise. "We are interested in the US market, because there is the greatest demand for diamonds in the world. This market accounts for 40 percent of sales of diamonds, "- said Wong.
In 2014, Chow Tai Fook bought a Hearts on Fire for $ 150 million in an attempt to introduce this American luxury brand in mainland China - a move that ran into problems as the recession in the country dimmed the buying habits of consumers of expensive things. Net income decreased by 46 percent for the year ended March 2016, while Chinese tourists began to search for other trade areas.
Since the acquisition of Hearts on Fire, the company expanded the presence of the brand in mainland China, having opened about 140 points of sale, said Chow Tai Fook in June. According to the company, about 80 percent of the proceeds from the sale of the brand comes as a result of the operations of the wholesale business franchise holders.
Instead of entering into a completely new retail market on their own, a new wholesale business will allow Chow Tai Fook to assess the situation, Wang said. "We will seek to work with local retailers who know the market", - he added.
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