【China】Higher Gold Prices, Fewer Gold Shops: 2,000 Stores Close as Gold and Jewelry Industry Accelerates ‘De-Franchising’

On November 10, domestic gold prices continued to surge, with spot gold breaking through $4,060 per ounce, rising 1.47% intraday. However, as gold prices climb higher, the number of gold shops is actually decreasing.
In the first three quarters of 2025, China’s gold and jewelry retail industry experienced a wave of “slimming down,” particularly concentrated among leading brands like Chow Tai Fook, Chow Sang Sang, Lao Feng Xiang, Chow Tai Seng, and Chow Hoi Fook. Multiple financial reports indicate these companies are optimizing their store portfolios by closing low-efficiency franchise stores while increasing self-operated and experiential stores.
According to incomplete statistics, several major gold and jewelry brands have cumulatively closed nearly 2,000 stores this year.
Facing high gold prices, soft consumer demand, and the failure of the traditional franchise model, leading companies are on one hand shrinking their inefficient store networks, and on the other hand, deploying multi-point strategies towards online integration, brand enhancement, and premiumization. Amidst store openings and closures, the industry is entering a new competitive cycle centered on efficiency and brand experience.

Independent financial analyst Wang Ning pointed out that behind the store closures lies not only market saturation and adjustments in consumption structure but also hints at the direction of transformation in brand management models. In an era of high gold prices and consumption stratification, the gold and jewelry industry is no longer competing on who has more stores, but on whose stores are more “valuable.”

The franchise model, once the engine for the industry’s rapid expansion, has now become a “hidden debt” for gold and jewelry companies.
The franchise system once helped brands grow by leveraging a “light asset, fast network expansion” model. However, persistently rising gold prices, increasing costs of raw materials and labor, and a trend towards more rational consumption have severely squeezed franchisee profits, increasing operational pressure. A practitioner in the gold and jewelry industry, Chen Hai, told reporters:

Financial data shows the contribution of the franchise system to the revenue of leading gold and jewelry companies has been weakening year by year. Chow Tai Seng’s revenue for the first three quarters of 2025 was 6.772 billion yuan, a year-on-year decrease of 37.35%; net profit attributable to the parent was 882 million yuan, a year-on-year increase of 3.13%. Among this, franchise business revenue plummeted 56.34% year-on-year, while self-operated offline business revenue only slightly declined by 0.86%, and e-commerce business revenue grew against the trend by 17.68%. Chow Tai Seng stated that during the reporting period, the company strengthened self-operated and e-commerce channel development, increased supply of lightweight, high-value-for-money products, with self-operated and e-commerce business performance outperforming the overall, becoming a growth highlight.

For Chow Tai Fook, in the three months ended September 30, 2025, the contribution of franchise stores to mainland retail sales dropped from 70.9% in the same period last fiscal year to 67.5%, while e-commerce retail value surged 28.1%, becoming a growth highlight.
Chow Hoi Fook’s first-half revenue was 3.15 billion yuan, a year-on-year increase of 5.2%, but revenue from the franchise model fell 17%, with its share of revenue dropping from 49% to 39%, being overtaken for the first time by online channels. E-commerce revenue grew 34% year-on-year, accounting for 52%. Chow Hoi Fook stated frankly in its report that the rapid rise in gold prices suppressed consumers’ short-term purchase willingness in the short term, leading to a decline in franchisees’ procurement willingness and intensified wait-and-see sentiment.
It is understood that traditional gold and jewelry brands like Chow Tai Fook and Lao Feng Xiang previously expanded store scale to enhance profitability, with franchise stores accounting for 80% or even 90%. Industry insiders point out that the franchise system is becoming a “performance shackle” for leading brands. Lao Feng Xiang’s wholesale business gross margin is only 9.39%, far below the retail end’s 23.6%; in comparison, Lao Miao Gold’s gross margin has long remained stable above 40%.

Independent financial analyst Wang Ning analyzed, “When the industry shifts from selling gold prices to selling brands, the franchise system inherently has shortcomings. Its low-margin characteristic constrains brands from breaking through upwards.” He believes that if traditional gold brands want to complete transformation, they must “sever ties to survive,” shifting from franchising to direct operation, with unified standards and enhanced service and experience as the core.

While shrinking franchise stores, major brands are seeking new growth paths, such as online integration, e-commerce, and premiumization.