Pedestrains walk past an advertisement of Chow Tai Fook in Xuchang city, Central China's Henan province, May 22, 2016.[Photo/IC]

Hong Kong-based jewelry retailer Chow Tai Fook suffered a 13 percent retail sales slump year on year in Chinese mainland market, for the first financial quarter ended June 30, Beijing Business Today reported Wednesday.

The company's same-store sales on the Chinese mainland and in Hong Kong and Macao dropped 17 percent and 20 percent, respectively, in the first financial quarter.

As a household name in China, Chow Tai Fook ranked the fourth with $9.98 billion sales volume in the top 100 global luxury companies in 2015. However, in the same report released by global consultant firm Deloitte Touche Tohmatsu this year, the company fell to the seventh on the list in 2016, one of the two firms that have seen sales slump on the top 10 list.

Wu Wenshuai, a jewelry retailer, said that the slowdown in gold and jewelry industry this year has been caused by consumer's reduced investment.

"Consumers invest less in jewelry when the stock market is prosperous," said Wu. "Chow Tai Fook won consumers when gold price were high a few years ago. Its dense retail stores were crowded by consumers who wanted to invest in whatever gold jewelries they could find."

As Chinese investors turn to finance market which offered P2P internet finance products with annual average rate from 7 to 12 percent, gold and jewelries are no longer seen as a good investment too many as the risk is high and expected return is low, the newspaper said.

With its products being too low at catching up with the trend, the high operation cost is another factor contributing to the company's poor performance.

Zhou Ting, director of Fortune Character, a luxury network, told the reporter that the company's operation mode is no longer competitive in modern jewelry market. "More personalized jewelry brands are entering the market online, new models such as 3D printing jewelries are taking over e-commerce market too," Zhou said.

Chow Tai Fook had 2,315 retail stores up until June 30 this year. "Without a more creative business model, it will be hard for the company to turn the situation around," Zhou said.