Watches of Switzerland aiming to see Scots presence tick up after strong year

Watches of Switzerland Group, which is led by Glaswegian chief executive Brian Duffy, says it is looking to boost its store network in Scotland and is confident about little impact from the cost-of-living crisis as it revealed sparkling profit and sales figures.

The London-listed retailer of luxury watch brands such as Rolex and Patek Philippe as well as high-end jewellery has in a fourth-quarter update cheered an “outstanding” year, saying it clocked up group revenue of £1.23 billion in the 12 months to May 1, 2022, a year-on-year jump of 40 per cent.

Ahead of formally announcing full-year results in July, the business said adjusted pre-IFRS 16 earnings before interest and taxes (EBIT) for the period is expected to be between £128 million and £132m, giving year-on-year growth of 64 per cent to 69 per cent.

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As for the financial year ending in 2023, the group’s guidance on an organic pre-IFRS 16 basis is for revenue amounting to £1.45bn to £1.5bn, and EBIT of £157m to £169m.

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The most recent full financial year saw luxury watch sales up by 36 per cent, and “demand for luxury watches continues to be very strong in both the UK and the US, consistently exceeding supply”, while luxury jewellery sales increased by 86 per cent.

Mr Duffy said: "We have delivered another record year of revenue and profitability as we continue to progress our Long Range Plan.”

Speaking to The Scotsman, he noted the big change in the mix of the group’s business, with a third of it international before Covid, but in the last financial year 97 per cent of group revenue was domestic, up from 95 per cent in the prior 12 months.

'The luxury watch and jewellery markets are dynamic and our group investment-led model continues to gain positive momentum,' says Glasgow-born boss Brian Duffy. Picture: contributed.

As for any concerns about the impact of the cost-of-living crisis, he stated: “We can’t have no concerns at all, but honestly, we’re not seeing anything. I think our consumer group is on average more wealthy than the average out there.” He in fact said the group is anticipating positive impact from increased travellers at airports and the return of workers to city centres in London or New York, for example.

He also touched on the group’s presence in Scotland, which includes stores in Edinburgh’s St James Quarter, where Watches of Switzerland has Omega, Goldsmiths and Breitling shops, and its overall performance there “about double” what it had expected.

Growth potential

"We’re under-represented in Edinburgh, out of all the major cities in the UK,” he added, and declined to be more specific, but said the firm is keen on both mono and multibrand store options.

The company in 2020 opened Scotland’s first dedicated “Rolex Boutique” on Glasgow’s Buchanan Street, adding to its Omega and Breitling boutiques and Mappin & Webb store in the city – where the group is also set to open Tudor and Longines outlets imminently.

Commenting on the latest figures, analyst Eleonora Dani of Shore Capital – which offers no recommendation on the group with coverage pending – said the watch firm’s shares have fallen by about 35 per cent since the start of the year.

However, she flagged the “potential growth trajectory in the fragmented US market”, adding: “Demand for luxury watches continues to outstrip supply. In our view, this is a management team executing its strategy well, and adapting to dynamic market conditions.

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