Chow Tai Fook Jewellery’s new flagship store, which opened in Hong Kong’s central district in September, has a subtle design, like most of the jewelery sold inside. The name above the door does not contain the Chinese characters for “Chow Tai Fook” displayed at the top of the retailer’s thousands of outlets. And inside, the store’s design hearkens back to some of Hong Kong’s traditional imagery; the metal grid covering the columns is a reference to the ubiquitous bamboo scaffolding in the Chinese city.
Jewelry is also more modest, such as a diamond-encrusted gold and red enamel pendant designed to mimic the Chinese characters that make up the store’s name and Cheng Yu Tung, who has grown the jewelry chain into one of Hong Kong’s leading conglomerates.
In April, Chow Tai Fook commissioned Nicholas Lieou, creative director of high jewelry, to refresh and renew the 95-year-old brand.
Courtesy of Chow Tai Fook
“With Chinese jewelry, (artisans) try to overload a lot of cultural significance on one piece, which makes it very difficult,” Lieou said in an interview in mid-November. “Just using one concept, one idea in a piece of jewelry is already a very modern take on what they would traditionally do.”
The decline of luxury
The decline of luxury is putting increasing pressure on Chow Tai Fook’s rebrand. The retailer reported revenue of HK$39.4 billion (US$5.1 billion). completion of six months September 30, 2024, the first half of the jewelry company’s fiscal year. This represents a drop of 20.4% on an annual basis, the largest since 2016.
Chow Tai Fook relies heavily on mainland China. Almost all of the approximately 7,000 sales points of this retailer are located in mainland China. The company’s second largest footprint is in Hong Kong, where tourism numbers are persistently low.
All luxury brands have reported sharp sales declines in China over the past year, as Chinese shoppers pull back on spending amid a slowing economy. Bain estimates that China’s personal luxury market will fall by 22% in 2024, compared to an increase of 3% in Europe.
Courtesy of Chow Tai Fook
Lieou, who spoke with Wealth before the earnings announcement, he said he was aware of how difficult it could be to sell expensive jewelry in a tough economy—partly because Chow Tai Fook is very open with its sales figures. “People won’t buy something they don’t like,” he noted. “We have to take (the economy) into account.”
That economic data, as well as changes in how people enjoy themselves after COVID, is why its modernization shift is focusing on “wearability” and “high jewelry for everyday wear,” to appeal to younger consumers. “Today, everyone is much more casual. You have a lot less festivities and things to go to, especially after COVID.”
“Instead of these big gala necklaces, you can create something a little softer, a little smaller in scale, but still beautifully crafted,” he said.
Strengthening a 95-year-old brand
Lieou joined Chow Tai Fook about four years ago, after years of working in the US, including a stint at Tiffany’s as director of design for retail high jewelry. He received a personal recommendation from Sonia Cheng, the retailer’s vice president, to jump across the Pacific and take a job at the Chinese retailer.
“I really understood what she wanted to do,” he said. “She wanted to refresh and refresh the brand. Being from Hong Kong, we know what the brand historically stands for, what it stands for.”
Chow Tai Fook’s first store opened in Guangzhou in 1929, but during World War II the business was moved to the Portuguese colony of Macau and British Hong Kong. Cheng Yu Tung, son-in-law of Chow Tai Fook’s founder, Chow Chi-yuen, took over the business in the 1950s and expanded the company into a vast conglomerate with interests including real estate (through developer New World), hospitality and energy.
Cheng’s granddaughter, Sonia Cheng, is now vice president and CEO of the jewelry business; she is also the CEO of the Rosewood Hotel Group, owned by the family conglomerate (also called Chow Tai Fook).
Lieou sees Chow Tai Fook’s long history as an asset as it contemplates modernizing the brand. “There is so much history. It’s very easy to extrapolate cultural elements and use them in design.”
Courtesy of Chow Tai Fook
“Creating something new is more difficult; to create from something—to cite something that is culturally significant—is easier,” he continued.
A recent example is the retailer’s “Doors” collection, which deals with some of the iconography of traditional doors found in historic Chinese buildings. But combining cultural details with modern styles can be tricky: one diamond bracelet in the collection requires 26 different pieces to assemble, Lieou explained.
“(The craftsmen) were not very happy about it,” he admitted. Chow Tai Fook relies on human craftsmen who use traditional techniques to assemble each piece of jewelry. (Though there’s also a role for new technology, like “5D gold,” a process that hardens pure gold to make it more durable.)
This leads to constant negotiations between designers and craftsmen to turn concepts into workable reality: “We really rely heavily on generational knowledge of craftsmen.”
But for Lieou, that back-and-forth is part of the design’s appeal. “Design for me is about solving problems,” he said. “How do we solve this design challenge in an aesthetic way?”
The extent of the rebranding is clearly visible from Chow Tai Fook’s new flagship store. The other two stores – still carrying the old branding – are literally steps away, along the same 500-foot stretch of road.
“I don’t mind,” Lieou said. “People are creatures of habit, especially when buying jewelry. You usually go to the same (store) where you bought your first engagement ring, your first important watch.”
“These are very significant relationships we have with customers.”
Fortune’s Brainstorm Design conference returns on December 5 at MGM Cotai in Macau. Panelists and attendees will debate and discuss “Experiments in Experience,” designs that blur the line between the physical and digital worlds to captivate users and foster lasting connections. Register here!
