Retail Jewelry Chains in China Collapsing Due to Gold Prices

China’s soaring gold prices are creating an uncomfortable paradox for jewelry retailers: the metal in their display cases is becoming more valuable, while the businesses selling it are struggling to survive. Customers increasingly favor investment bars over elaborate ornaments, leaving chains with expensive inventory, shrinking foot traffic, and mounting pressure on cash flow.

The crisis is particularly visible at Kingee Jewelry, once a rising star in China’s affordable luxury market. As this Gems News report examines, its troubles reveal how rising bullion prices, changing consumer preferences, and costly expansion can combine to undermine even an established brand. Kingee’s reversal also raises a wider question about whether traditional jewelry retail models can withstand prolonged market disruption.

From Fashion Success to Financial Distress

Founded in Beijing in 2001 by Lin Mingjie, his wife Gao Xiaosong, and his sister Lin Huixian, Kingee initially distinguished itself from conventional gold retailers. Instead of relying primarily on wedding purchases and ornaments priced by weight, it marketed jewelry as an everyday expression of style for younger, urban consumers.

International designers, contemporary diamond collections, and fashionable gold products helped establish a light luxury identity. The strategy coincided with rising disposable incomes and growing interest in jewelry beyond ceremonial occasions. By 2012, Kingee operated more than 180 directly managed stores and recorded annual sales exceeding 1 billion yuan.

Its network reached 240 outlets by May 2015, including 233 company operated locations. Later that year, Kingee joined China’s National Equities Exchange and Quotations market, reporting revenue of 1.113 billion yuan and shareholder attributable profit of 70.84 million yuan.

The company pursued international recognition by signing actress Anne Hathaway as a brand ambassador. Appearances associated with New York Fashion Week strengthened its upscale image. In July 2017, Kingee’s market capitalization reached approximately 2.76 billion yuan, while annual revenue subsequently climbed to 1.357 billion yuan and profit to 94.28 million yuan.

The Store Network Unravels

The foundations of that success became liabilities as shopping mall traffic weakened and rental costs remained burdensome. Kingee’s reliance on directly operated outlets gave management control over service and presentation, but also exposed the company to substantial fixed expenses when sales declined.

Beginning in 2021, the retailer accelerated a shift toward franchising. Its directly operated mall locations fell to 123 that year, then to 52 in 2022, 21 in 2023, and just one in 2024. Franchise partners, however, could not reverse the contraction.

The franchised network decreased from 124 stores at the end of 2023 to 95 a year later. Although 17 outlets opened during 2024, another 46 closed. Reports described franchisees liquidating merchandise, abandoning the Kingee name, or switching to competing brands.

That retreat matters beyond the store count. Fewer outlets mean weaker customer visibility and fewer opportunities to sell slower moving designs. Meanwhile, closures can damage confidence among suppliers and franchise partners, making recovery harder even if consumer spending eventually improves.

Online Sales Offer Only Temporary Relief

Kingee then turned to livestream shopping and major e-commerce platforms. The effort initially appeared promising. During China’s 2023 Singles’ Day shopping campaign, transactions through its official livestream operation reportedly exceeded 100 million yuan.

In 2024, e-commerce contributed 528 million yuan, nearly 70% of total company revenue. Digital sales seemed capable of replacing declining physical retail activity, but the momentum proved short lived.

Overall revenue fell to 438 million yuan in 2025, while online revenue dropped 44.64% to 292 million yuan. In the first half of 2026, e-commerce revenue plunged another 89.75% year over year to 19.63 million yuan, accounting for only about 9% of revenue.

The figures illustrate how online reach does not guarantee sustainable demand. Livestream promotions can attract buyers, but deep discounts, intense competition, and changing preferences make it difficult to maintain margins, particularly for design focused jewelry competing with simpler gold products.

Valuable Gold, Almost No Cash

Kingee’s most striking problem is the disconnect between inventory and liquidity. Its reported jewelry and gold stock exceeded 1.5 billion yuan in the first half of 2026, yet available cash stood at only 930,000 yuan against approximately 290 million yuan in liabilities.

Inventory turnover deteriorated from 0.45 times in 2024 to 0.23 in 2025 and 0.12 during the first half of 2026. Nearly half its stock was reportedly more than three years old. These figures suggest merchandise may remain unsold for extended periods, tying up funds needed for payroll, suppliers, and debt obligations.

A higher gold price does not automatically solve that problem. Jewelry carries design costs, retail markups, and fashion risk. Customers seeking exposure to bullion prices may prefer investment bars, while buyers of decorative pieces can postpone purchases as prices rise.

Financial pressure soon became public. Reports described delayed wages and labor arbitration applications involving more than 60 employees. By late June 2026, more than half of Lin Mingjie’s personal Kingee shareholding had reportedly been pledged.

On September 10, sponsoring broker Northeast Securities said it could not contact Lin or Gao despite repeated attempts. The reasons remained unclear. Kingee shares subsequently lost more than 64% across two trading sessions, leaving market capitalization near 47.48 million yuan. On October 8, the company was reportedly named in an enforcement proceeding involving more than 18.14 million yuan.

A Warning Across China’s Jewelry Industry

Kingee is not alone. Jinzhou Cihang exited the capital market after sustained share price weakness, while Cuihua Jewelry faced disclosure and governance problems alongside a severe decline in valuation. Their difficulties differ, but together they expose vulnerabilities in a sector confronting weaker demand and operational strain.

The broader lesson is that expensive gold can enrich the perceived value of inventory without generating the cash retailers need. Retailers must also understand why consumers increasingly distinguish investment purchases from personal adornment. Survival may require leaner store networks, tighter inventory controls, credible financial reporting, and products that justify their premiums. Kingee’s experience demonstrates that branding and digital sales cannot compensate indefinitely for deteriorating liquidity.