Chow Tai Fook Jewellery’s new flagship store, which opened in Hong Kong’s Central neighborhood in September, has a subtle design, as does much of the jewelry sold inside. The name above the door doesn’t sport the Chinese characters for “Chow Tai Fook” shown prominently atop the retailer’s thousands of other outlets. And inside, the store’s design hearkens to some of the traditional images of Hong Kong; the metal grille that covers the columns is a reference to the Chinese city’s ubiquitous bamboo scaffolding.
The jewelry, too, is more understated, like a diamond-studded pendant made from gold and red enamel, designed to emulate the Chinese characters that make up the name of the store and of Cheng Yu Tung, who expanded the jewelry chain into one of Hong Kong’s leading conglomerates.
In April, Chow Tai Fook charged Nicholas Lieou, the retailer’s creative director for high jewelry, with the responsibility of refreshing and revamping the 95-year-old brand.
“In Chinese jewelry, [the craftsmen] try to overload a lot of cultural significance on one piece, which makes it very heavy,” Lieou said in an interview in mid-November. “Just using one concept, one idea, into a piece of jewelry is already a very modern take on what they traditionally would do.”
Luxury downturn
A luxury downturn is putting more pressure on Chow Tai Fook’s rebrand. The retailer reported 39.4 billion Hong Kong dollars ($5.1 billion) in revenue for the six months ending Sep. 30, 2024, the first half of the jewelry company’s fiscal year. That represents a 20.4% drop year-on-year, the largest since 2016.
Chow Tai Fook relies heavily on mainland China. Almost all of the retailer’s around 7,000 outlets are in mainland China. The company’s second-largest footprint is in Hong Kong, where tourism numbers have stayed stubbornly low.
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Luxury brands have all reported sharp slowdowns in their China sales over the past year, as Chinese shoppers pull back on their spending amid a sluggish economy. Bain estimates that China’s personal luxury market will drop by 22% in 2024, compared to a 3% increase in Europe.
Lieou, who spoke to Fortune before the earnings release, said he was aware of how difficult it could be to sell high jewelry in a tough economy—in part because Chow Tai Fook is very open with its sales data. “People are not going to buy something they don’t like,” he noted. “We do have to put [the economy] in consideration.”
That economic data, as well as changes in how people enjoy themselves post-COVID, is why his modernizing push focuses on “wearability” and “high jewelry for everyday wear,” to appeal to a younger consumer. “Today, everyone is a lot more casual. You have a lot fewer galas and things to go to, especially after COVID.”
“Rather than these big gala necklaces, you might create something a little bit softer, a bit smaller in scale, but still beautifully made,” he said.
Invigorating a 95-year-old brand
Lieou joined Chow Tai Fook around four years ago, after years working in the U.S., including a stint with Tiffany’s as the retailer’s design director for high jewelry. He got a personal pitch from Sonia Cheng, the retailer’s vice-chairman, to jump across the Pacific to take a job at the China-based retailer.
“I really understood what she wanted to do,” he said. “She wanted to invigorate and refresh the brand. Being from Hong Kong, we know what the brand historically represents, what it signifies.”
Chow Tai Fook’s first store opened in Guangzhou in 1929, but shifted operations during the Second World War to the Portuguese colony of Macau and British Hong Kong. Cheng Yu Tung, the son-in-law of Chow Tai Fook’s founder, Chow Chi-yuen, took over the business in the ’50s, and expanded the company into a massive conglomerate with interests including real estate (through developer New World), hospitality, and energy.
Cheng’s granddaughter, Sonia Cheng, is now the vice-chairman and executive director of the jewelry business; she’s also the CEO of the Rosewood Hotel Group, owned by the family conglomerate (also named Chow Tai Fook).
Lieou sees Chow Tai Fook’s long record as an asset as he thinks about modernizing the brand. “There’s so much history. It’s very easy to extrapolate cultural elements and use it in the design.”
“To create something new is harder; to create from something—to reference something that is culturally significant—is easier,” he continued.
A recent example is the retailer’s “Gate” collection, which trades on some of the iconography of the traditional doorways found in historic Chinese buildings. But combining cultural details with modern styles can be tricky: One diamond bangle in the collection requires 26 different parts to be put together, Lieou explained.
“[The craftsmen] weren’t quite happy about that,” he admitted. Chow Tai Fook relies on human craftsmen using traditional techniques to put together each piece of jewelry. (Though there is also a role for new technology, like “5D gold,” a process that hardens pure gold to make it more durable.)
That leads to a constant negotiation between designers and craftsmen to turn concepts into a workable reality: “We really rely heavily on the generational knowledge of the craftsmen.”
But, for Lieou, that back-and-forth is part of the appeal of design. “Design, for me, is problem solving,” he said. “How do we solve this design challenge in an aesthetic way?”
The scale of the rebrand is clearly visible from Chow Tai Fook’s new flagship store. Two other stores—still sporting the old branding—are literally steps away, along the same same 500 foot stretch of road.
“It doesn’t bother me,” Lieou said. “People are creatures of habit, especially when you buy jewelry. You generally go to the same [store] where you bought your first engagement ring, your first important watch.”
“These are very meaningful realtionships we have with customers.”
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