(Yicai) March 12 -- Shares of Lao Feng Xiang, one of China's oldest jewelry brands, rose despite its earnings falling last year as a result of the surging price of gold and changing consumer habits.

Lao Feng Xiang [SHA: 600612] closed 2.6 percent higher at CNY52.40 (USD7.23) a share in Shanghai today. The stock has fallen 41 percent since reaching an all-time high of CNY89.49 in April last year.

Net profit dropped 12 percent to CNY2 billion (USD269 million) in the 12 months ended Dec. 31, the Shanghai-based retailer’s annual earnings report showed yesterday. Revenue plunged 21 percent to CNY56.8 billion (USD7.8 billion).

The company said weak global economic growth, sluggish demand in China, and the continuous rise in gold prices had combined to dampen consumer appetite for gold jewelry.

China's consumption of gold jewelry fell by a quarter to 532 tons last year from 2023, according to the China Gold Association. The price of gold climbed by about 28 percent in the same period.

Lao Feng Xiang's store openings also failed to meet expectations. It had almost 5,840 outlets around the world as of December, including nearly 200 directly-operated stores, an increase of 10 from the start of the year. The remaining franchise stores saw 170 close.

Other jewelry retailers in China have also reported shrinking earnings. The same-store sales in the Chinese mainland of Hong Kong-based Chow Tai Fook Jewellery sank 27 percent in the last quarter of 2024 from a year ago, with the slump reaching as much as 32 percent in Hong Kong and Macau, according to its unaudited trading figures.

Traditional jewelry stores are facing strong competition from internet-based brands and emerging labels amid widening consumer tastes, industry insiders said.

These new rivals often win over buyers with lower prices and more flexible marketing strategies, forcing established players to make deep adjustments under pressure from shareholders, performance targets, and market changes, they added.

Editor: Emmi Laine