Chow Tai Fook grew to 7,500 stores by opening relentlessly — then had to slam the brakes

For years, Chow Tai Fook, one of China's biggest jewellers, grew the way it knew best: opening stores. A 'new town' plan launched in 2018 pushed it deep into smaller cities, and by the end of 2023 it had more than 7,500 shops. The strategy assumed that more doors meant more sales. What it did not fix was the weak performance of the doors it already had — same-store sales and revenue per shop had been disappointing for years, so growth depended on never stopping the openings.

The engine stalled. With few untapped towns left and rivals such as Lao Feng Xiang, Chow Tai Seng and Luk Fook all sinking into the same lower-tier markets, competition turned into price wars that squeezed margins. A surge in gold prices then cooled jewellery demand rather than helping it. In the first half of its 2025 financial year, Chow Tai Fook's revenue fell 20.4 percent year on year, and its gross margin had already slipped to 20.5 percent, the lowest since 2009.

The company slammed the brakes. After net-closing 239 mainland retail points in six months, management said it would now 'focus on high-quality new store opening, rather than growth in numbers,' planning just fifty new self-operated shops in lower-tier cities for the whole year. The exit of the executive who had run the mainland business in 2023 had already hinted the opening spree was over. A growth model built on adding stores had run out of stores to add.