Since a “genie” first whispered the name to founder Hans Wilsdorf on a London omnibus, prestigious watch brand Rolex has acquired a rich lore, including such milestones as its use in the first expedition to fly over Everest, and being taken to the deepest point in the world’s oceans.
With such a rich heritage, underpinned by meticulous precision that makes it a byword for prestige and status, it’s no wonder the brand is a key growth driver for Watches of Switzerland Group, formerly Aurum Holdings, which notched up half of UK Rolex sales last year.
Step forward chief executive Brian Duffy, from Glasgow, who has led what is the nation’s largest distributor for premium luxury brands – including Patek Philippe and Breitling – for more than five years, and boasted a 35 per cent market share by value of luxury watch sales in the UK last year.
“It’s a great space, luxury Swiss watches,” says Duffy, who sees such a purchase as a rational indulgence. “There are cheaper ways to tell the time, for sure – but your watch tells a lot more than the time, and that’s a big part of the magic.”
Any owner of a Rolex Explorer model, for example, can take pride in the fact it was developed for polar, mountaineering and caving expeditions, for example, while the Submariner was the first divers’ wristwatch waterproof to a depth of 330 feet.
Watches of Switzerland Group’s parent company, Jewel UK Midco, at the start of May unveiled a preliminary trading update for the year to April, highlighting a record performance. This included reported revenue of £773 million, with implied year-on-year income growth of 22.5 per cent.
The company’s network of Watches of Switzerland branded showrooms includes Buchanan Street in Glasgow, a flagship store on London’s Regent Street that is Europe’s largest luxury watch showroom, and a sizeable presence at Heathrow Airport – although an outlet on Edinburgh’s Princes Street was shut in 2013 as part of a cost-cutting exercise.
Since that year the group has been backed by US private equity giant Apollo Global Management – and also encompasses jewellers Goldsmiths, which in 1919 became the UK’s first appointed stockist of Rolex watches, as well as Mayors and Mappin & Webb.
The latter dates back to 1775, and customers over the years have included Charles Dickens, Winston Churchill, Harry Houdini and Grace Kelly – with the latter paying a visit in Edinburgh in 1960. The jeweller even provided earrings for French royalty Marie Antoinette. “I had to check it was the real Marie Antoinette – and not the one I was at school with,” says Duffy wryly.
He spent the first few years of his life in Glasgow’s Castlemilk, saying his upbringing involved a “tour” of the city’s housing schemes.
He has recently been doing a tour of a different kind due to the confirmation earlier this month of a planned Watches of Switzerland Group stock market flotation that Duffy expects to take place in June.
Further details emerged last week, with a minimum deal size of £200m and targeting a price range of 250p to 277p to give a market capitalisation of £610m to £660m.
The former Celtic FC director believes the move will shine a much brighter spotlight on the organisation, though that will also involve him stepping into the limelight to give presentations. “Any time the fridge door opens, I’m ready to go on another one,” he says.
Goals of the initial public offering include paying down debt and boosting the group’s capital-raising options and brand recognition.
“I think, personally, it’s a good ownership direction for this kind of business to go,” he says. “We’ve a good story, we’ve a good plan for the future… so the investment community’s responding pretty well to all of that.”
Its not so long ago that Aurum Holdings – which last year rebranded itself as The Watches of Switzerland Group – fell more than £19m into the red as one of its biggest shareholders, Icelandic retail investor Baugur, collapsed in 2009.
Among the additional benefits Duffy highlights of being a public company is the cachet it provides in terms of hiring senior management, “but the biggest single thing, I think, is the continuity and stability of ownership”. He is also set to personally reap handsome rewards from the float as an investor in the business.
The group says that under Duffy’s leadership it has undergone major transformation since 2014, with “strong and sustained profitable growth that has improved operating margins, delivered strong returns on capital invested and established a well-invested platform for growth”.
It has also been branching out into the US, in areas such as Florida, Las Vegas and New York, in a market that Duffy says was “underdeveloped”, and in need of more of high-quality, big store retailing.
Duffy’s education was in accountancy, and he was one of the last cohort able to do chartered accountancy from school. He qualified aged just 21.
His career saw him work for organisations such as Polaroid at Vale of Leven, before crossing the Clyde to join underwear firm Playtex, which had a big factory at Port Glasgow, and where he became UK chief financial officer aged 28. He progressed through the ranks to lead its finance operations at a European level, based in Paris, and then globally from Connecticut.
The firm underwent a management buyout, and Duffy moved into general management, moving his focus towards marketing and branding, and returning to the UK to take the reins as Playtex’s UK MD. His first big marketing project was the launch of Wonderbra, working with advertising star Trevor Beattie.
Duffy later enrolled at the Academy of Contemporary Music in Guildford to brush up on his guitar skills, reportedly travelling to classes in his open-top Jaguar.
However, the corporate world lured him back via an offer to work for fashion brand Ralph Lauren, which he joined in 2003, spending nearly a decade with the business, serving as president for Europe and the Middle East.
It also proved a landmark phase in his career, as Lauren challenged the Scot’s lack of experience in the luxury market. . But the successful launch of the brand in Russia proved a real turning point. “Being able to meet [Lauren’s] challenge, ultimately, and have his respect and support, was something that’s very important to me. I really had to earn it.” Duffy adds: “I’ve been very, very lucky to be in the right place at the right time, career-wise, and it’s been very varied.”
Duffy’s arrival at his current role came about as he was seeking a more UK-based post. He had a keen personal interest in watches, having built up “a nice little collection”.
Jat Sahi, retail consulting industry lead at Fujitsu UK, recently highlighted the “struggle” high-street retailers face generally in the digital age. “As customer spending continues to be volatile, retailers must challenge this by offering a compelling customer experience that will give shoppers more convenience and joy,” Sahi said.
Duffy stresses that Watches of Switzerland is capitalising on being a destination store – and is “not threatened by the things that are threatening the rest of the high street”.
The group has about 125 stores across the UK, and has been making major cash injections to ensure they sparkle – all have been renovated or newly opened since 2014. As of 27 January this year, its UK shops accounted for 93.2 per cent of the group’s revenues.
And while some believe younger consumers have been moving away from luxury watches as they seek subtler status symbols, Duffy sees the market – and its associated provenance and craftsmanship – as playing well with millennials and social media.
Furthermore, the executive, who has been hosting Watches of Switzerland podcasts, does not see the growing popularity of Apple watches as a threat, perceiving no crossover with the luxury market. If anything, consumers are increasingly making a beeline for more traditional, mechanical pieces, he argues.
As for the group’s outlook, he admits that there is plenty to do, increasing its foothold in the US, for example, where the watch and jewellery market is expected to be worth £7.6 billion by 2025.
And in the UK, the group has signed up to prestigious forthcoming high-end retail projects at sites such as Broadgate in London, not too far from where the name Rolex was apparently first uttered.
“We’ve got so many great avenues in which we’ve got momentum,” Duffy adds. “We never take it for granted. It’s never easy – there are things that can happen out there in the marketplace, of course, that can throw us off course – but I think we’ve shown over the years that we can handle that and regroup and go again. It’s a great business – and one that I’m very pleased to be leading.”