- WoS saw demand for major brands outpace supply across the UK and USA
Watches of Switzerland Group has reaffirmed its guidance following healthy trading in Britain and the United States over Christmas.
Britain’s largest luxury watch retailer saw demand for prominent brands outpace supply across the two countries, especially products on ‘registration of interest’ lists.
It said the UK market underwent a ‘further stabilisation’ in watch and jewellery orders, while the US enjoyed ‘continued momentum’ and both territories grew market share.
WoS also observed strong performances by its pre-owned businesses and the Italian handcrafted jewellery brand Roberto Coin in North America.
The London-based company bought Roberto Coin for £104million last year, as well as the watch enthusiast website Hodinkee, partly to capitalise on American consumers’ growing interest in luxury goods.
It opened two relocated and expanded outlets in Tampa, Florida, and Betteridge Vail, Colorado, in December and plans to introduce new Rolex agencies to showrooms in Plano, Texas, and Jacksonville, Florida.
Meanwhile, WoS intends to launch a new flagship Rolex boutique on Old Bond Street in March, which it hopes ‘will be a major destination for Rolex in the UK market.’
‘Given our trading performance over the first nine months of the fiscal year, visibility of supply in both markets, certainty on the timing of key showroom openings, and expectations of new product launches, we remain confident in delivering our FY25 guidance,’ the firm said.
WoS forecasts its revenue growing by 9 to 12 per cent at constant currency levels to between £1.67billion and £1.73billion.
The global luxury sector looks to be recovering steadily following a two-year downturn caused by consumer uncertainty, subdued demand among young adults, and a weak Chinese economy.
In its half-year results covering the 26 weeks ending 27 October, WoS reported its sales rose by 4 per cent at constant currency rates to £785million.
However, the group’s pre-tax profit slumped by 39 per cent to £41million owing to lower net margins and higher finance costs from the Roberto Coin takeover.
David Hughes, a retail expert at Shore Capital, said: ‘Given the worsening views on the economic outlook of the UK, and a number of recent profit downgrades from retailers following a softer seasonal period, a report of good trading and maintained 2024-25 guidance should reassure.’
Watches of Switzerland Group shares were 0.45 per cent lower at 552.5p on early Thursday afternoon, but have still risen by about 46 per cent over the past 12 months.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
