Can You Still Lose When Gold Prices Soar? The "Hermès of Gold" Sells ¥31.4bn — Some Firms Didn’t Even Get a Taste

Winners: luxury positioning and youth demand paid off

It has been reported that Laopu Gold (老铺黄金), nicknamed the "Hermès of Gold," posted a blockbuster 2025 with sales of about ¥313.750 million (≈¥31.4 billion), up roughly 220% year‑on‑year, and net profit soaring by a similar margin. How did a traditional gold jeweller do it? By repositioning gold as a luxury, one‑price product with margins above 37%, opening only in top malls — SKP, Hang Lung (恒隆) and MixC (万象城) — and courting 90s/00s shoppers who now queue for hours to buy pieces that carry strong per‑gram premiums. Fellow listed jeweller Chow Sang Sang (周生生) also doubled annual profit, and Chaohongji (潮宏基) reported net profit growth of 125–175% alongside rapid store expansion and youth‑oriented IP collaborations.

Losers: hedges, leasing and the wrong side of volatility

But soaring spot gold did not make everyone rich. It has been reported that Lao Feng Xiang (老凤祥) saw 2025 revenue and net profit fall by about 7% and 10% respectively, and closed 499 franchise outlets — a sign that a strong headline gold price doesn’t automatically translate to chain resilience. China Gold (中国黄金) warned of net profit halving, blaming sharp price swings and policy shifts that hit product sales and created fair‑value losses in its gold‑leasing business. The most striking cautionary tale is Mengjinyuan (梦金园): a strategy of Au(T+D) contracts and leasing intended to hedge cost ended up backfiring as gold surged, producing reported realized losses of ¥706 million on contracts and pushing total hedging losses to around ¥1.01 billion — wiping out the retail gains.

Why the split? Consumers versus finance

The divergence is simple: some brands captured changing consumer tastes and scarcity psychology; others got dragged into complex financial exposure and abrupt policy changes. It has been reported that rising global uncertainty and monetary dynamics helped drive gold as a safe haven, but for many Chinese jewellers the immediate problem was that higher bullion prices reduced footfall for commodity lines even as premium offerings prospered. The lesson for investors and managers? Product mix, channel footprint and risk management matter as much as the metal’s spot price. So, when gold soars, can you still lose? Yes — especially if you mistake a commodity boom for a risk‑free profit engine.