Tse Sui Luen Chairwoman and executive director Annie Yau poses in front of The Ever Shining Star, one piece of Tse Sui Luen Jewellery yesterday in Hong Kong Jewellery & Gem Fair 2009, the world's largest jewellery event. The piece, with 207 carats of diamonds and ruby gem stones, plans to beat the most expensive Snoopy Guinness Record. China Daily

HONG KONG: Despite a gradual recovery in its second-half sales, local jewelry retailer Tse Sui Luen is taking cautious steps with its expansion amid economic uncertainties.

Chairwoman Annie Yau told China Daily in an exclusive interview that the company's business in Hong Kong hit its lowest point in June, depressed by the impact of the global financial crisis and the H1N1 pandemic.

"We saw a significant rebound in sales in August, while our customer volume has also picked up to a normal level," Yau said.

She expects the company's sales to peak during the National Day holiday in October, benefiting from mainland tourists spending during their visits to Hong Kong.

Retail sales in Hong Kong have been supported by the purchases from the mainland tourists, as local consumers cut spending amid the impact of the global economic recession.

"We expect mainland tourists to continue bolstering retail sales in Hong Kong, while local spending will also perform better in the second half," Yau added.

Boosted by the flourishing sales on the mainland, net earnings of Tse Sui Luen jumped 5.6 percent to HK$104.8 million for the fiscal year ended February 28, 2009. The company's revenue also improved from HK$1.96 billion from HK$1.92 billion a year earlier.

Despite the strong sales growth on the mainland, Tse Sui Luen will remain cautious about expansion this year.

"The economy has been on a roller coaster this year," Yau said, "We will be very cautious with our expansion and open not more than 10 stores on the mainland this year."

Tse Sui Luen currently has around 160 outlets on the mainland, mainly selling jewelry products. Yau admitted that the company will have much more space to develop on the mainland than in Hong Kong.

"The retail market in Hong Kong is quite saturated now," she said, "We will not have any large scale expansions in the foreseeable future."

Attracted by the country's significant market space and resilient economic situation, jewelry retailers in Hong Kong are eyeing progressive expansion on the mainland.

One of the city's leading jewelry chains Chow Sang Sang earlier told China Daily that it will spend around HK$50 million to open 25 more stores on the mainland in 2009.

Another major jewelry retailer Chow Tai Fook, meanwhile, has also planned to open 1,000 shops in second- and third-tier cities on the mainland by 2010.

Facing the intensifying competition among Hong Kong jewelry retailers, Yau said Tse Sui Luen will continue improving the quality of its products, to boost the company's sales on the mainland, contributing 60 percent of the company's revenue.

"Some jewelry retailers will win the market by expanding their shop numbers, but Tse Sui Luen will win by our quality," Yau said, adding "we want to lead the jewelry market through our product design and innovation."

Yau, the daughter-in-law of the company founder Tse Sui-Luen, was appointed the executive director and chairman in April 2008, after Tse and his son Tommy Tse were sentenced to jail for corruption and fraud charges in May last year.

Trading in the company's shares was suspended for two and a half years, after the Independent Commission Against Corruption laid charges against the senior management.

The stock, however, has since surged almost 268 percent, after it resumed trading in the Hong Kong bourse on June 15.

"I really need to thank the investors for their support of the company," Yau said, adding, "It is a healthy step for the company to become vibrant again in local stock trading."

Moving in line with 0.28 percent drop in the benchmark Hang Seng Index, shares in Tse Sui Luen yesterday finished down 2.33 percent, or HK$0.05, at HK$2.1.

(HK Edition 10/01/2009 page3)