SHANGHAI — China's last empress dowager, Cixi, was said to have so loved tourmaline that on her deathbed in 1908, the ironfisted ruler demanded that a pink gemstone mined in Pala, Calif., be placed on her finger.
The story may be apocryphal, but Yu Chuan Yih, who also goes by Lorenzo, has good reason to promote it.
As chief executive of LJ International, Yih has been producing tourmaline, amethyst and other semiprecious jewelry in China for the last two decades. His customers are mainly American retailers, including Wal-Mart, Zales and QVC, the home television shopping network.
Now the native of Sichuan province -- who moved to Brazil as a boy, settled in Los Angeles and then returned to Hong Kong -- is making a run at the large Chinese retail market.
Since early 2005, Yih has opened 30 stores in a dozen Chinese cities, including one on Nanjing Road, Shanghai's high-end shopping district. Last year his China stores, called Enzo, generated about $2 million in sales, and Yih expects to quadruple that this year.
"The only one large market left in the world is China," Yih, 67, said during a recent visit to Shanghai before heading to his 250,000-square-foot factory in Shenzhen, the industrial city that borders Hong Kong. From there, he left for Brazil, where he owns a large tourmaline mine.
LJ International, which is based in Hong Kong and traded on Nasdaq (ticker symbol: JADE), reported sales of $95 million last year, up 22% from 2004. The company has been consistently profitable, although earnings haven't kept pace with revenue growth in recent years. In 2005 it reported a profit of $3.4 million.
Yih has a jump on the Chinese market. He has opened more retail stores than most of his foreign rivals, except for Hong Kong companies such as Luk Fook and Chow Tai Fook, the leader with about 400 stores on the mainland. Luxury brands such as Cartier and Tiffany are also making a push in China.
China's jewelry market, like those for many consumer goods in the Middle Kingdom, is highly fragmented. Yet sales are booming, averaging 15% to 20% gains annually, thanks to rising incomes and freer trading of gold and diamonds. Retail jewelry sales in China exceeded $17 billion last year, about a third of the U.S. market, according to industry associations.
Yih is betting that like Cixi, Chinese consumers will be attracted to less-expensive colored stones.
