Sales jump at Scots-led luxury watch retailer despite lockdown

Watches of Switzerland, the luxury time-piece retailer fronted by Scots-born chief executive Brian Duffy, has upped its full-year outlook thanks to better-than-expected demand.

Scotsman Brian Duffy is the chief executive of Watches of Switzerland, which ranks as Britain’s biggest retailer of Rolex, Cartier, Omega, TAG Heuer and Breitling watches. Picture: John Devlin

The group, which ranks as Britain’s biggest retailer of Rolex, Cartier, Omega, TAG Heuer and Breitling watches, said constant currency revenues jumped by 20.2 per cent in the first ten weeks of its second quarter to 25 October.

Shares surged in morning trading as the firm raised its full-year sales guidance to between £880 million and £910m and said earnings margins are also set to beat previous expectations.

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But it cautioned that sales growth is expected to slow in its third quarter due to retail disruption amid the Covid pandemic, while trading in the travel and tourist sectors is unlikely to improve.

Duffy said: “Trading momentum has further improved in the second quarter. Stronger-than-anticipated UK domestic sales are offsetting lower tourist and airport traffic, whilst regional stores are continuing to outperform London stores.

“Furthermore, the strong momentum we have established in the US has further accelerated.”

He added: “Our guidance for the balance of the fiscal year assumes that the positive trend experienced in the second quarter will be moderated by the impact of pandemic-related retail disruption in the UK and the US and uncertainty in the US economy, impacting mainly in the third quarter.”

The group opened a Rolex boutique in Glasgow at the end of the first quarter of its current financial year – the firm’s first mono-brand store in Scotland – which had been converted from a Watches of Switzerland site and whose debut had been delayed by the pandemic.

Analysts at Shore Capital noted: “Our key takeaway is the resilience of the trading performance in the UK given the lack of footfall from tourists and lower airport sales, together with a step on in the US sales.

“Demand for luxury watches continues to outstrip supply. We believe that the shares will go better on the back of upgraded guidance for and we think that the company strategy of selective refits to stores, together with its proprietary CRM [customer relationship management] system to target consumers will aid further growth.

“In our view, this is a management team executing its strategy well and adapting to the unprecedented market conditions.”

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