Watches of Switzerland buoyed by growing list of luxury buyers
But the Rolex retailer cautioned investors over more challenging conditions in the year ahead.
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Your support makes all the difference.Rolex and Cartier seller Watches of Switzerland has seen its yearly sales jump by one-quarter amid a growing list of buyers undeterred by higher prices for luxury time-pieces.
But it cautioned investors over more challenging conditions in the year ahead.
The company, which says it is the UK’s largest authorised watch retailer, boasted “another record year of revenue and profitability”.
It saw its revenues grow by one-quarter to £1.5 billion in the year to the end of April, driven by a surge in sales in the US of more than 50%.
Luxury watch revenue jumped by 28%, which is said was boosted by increases in both the average selling price and the volume of items sold, reflecting the “dynamism” of expensive time-pieces.
It expects to report an adjusted pre-tax profit of between £163 million and £167 million, up from £130 million this time last year.
The watches and jewellery chain revealed plans to launch new showrooms in St Anne’s in Manchester and Old Bond Street in London next year.
The Manchester store will form part of a joint venture partnership with Audemars Piguet, a Swiss luxury watch maker which has boutiques in London’s Sloane Street and department store Harrods.
The Old Bond Street showrooms will be flagship stores for Tudor and Rolex in one of the most “prestigious addresses” in the capital, it said.
It is also expanding internationally with multi-brand showrooms opening in New Jersey in the US this month and in the Netherlands later this year.
We remain confident in our goals to maintain our leadership position in the UK, become the clear leader in the US, and capitalise on our growth potential in Europe
However, the firm said it is set to face a more “challenging trading environment” in the first half of its new financial year, before improving in the second half.
It expects a “modest” sales decline over the first financial quarter, partly due to the timing of product intake and because of the strong prior year comparisons, it said.
Sales are then predicted to level out by the second quarter.
Brian Duffy, Watches of Switzerland’s chief executive, said: “Although, as expected, the second half of the 2023 financial year saw a more challenging trading environment, demand remains strong and continues to exceed supply, with client registration lists continuing to grow.
“We remain confident in our goals to maintain our leadership position in the UK, become the clear leader in the US, and capitalise on our growth potential in Europe.”
The pressure is on for the business to deliver and not be put on the scrapheap along with the online fashion retailers who suffered an almighty post-pandemic hangover
The group is expecting profits in the next financial year to be in line with 2023, and predicts revenue growth of around a 10th.
AJ Bell investment director Russ Mould said the company had benefited from the pandemic when many people “splashed the cash because they were bored and stuck at home”.
He added: “The trouble is that investors have seen other pandemic retail winners fall flat on their face over the past few years and they might worry that Watches of Switzerland’s latest update could be the first in a series of setbacks.
“The pressure is on for the business to deliver and not be put on the scrapheap along with the online fashion retailers who suffered an almighty post-pandemic hangover.”
Investors were troubled by the less optimistic outlook and its share price was down by more than 7% on Wednesday morning.