Watches Of Switzerland Shares Soar On Improved Sales, Growth Plan News

Luxurious timepiece retailer Watches of Switzerland Group soared on Tuesday because it introduced bettering gross sales momentum and divulged particulars of its new development technique.

At 570p per share, the Watches of Switzerland share worth was up 9.8% and main the FTSE 250 increased.

Revenues edged 1% increased throughout the 13 weeks to 29 October, to £379 million. Stripping out the affect of forex volatility gross sales had been up 5% yr on yr.

The corporate mentioned that “demand for luxurious watches stays strong and continues to exceed provide,” with gross sales within the US rising 4% yr on yr to £165 million. This was up 11% at steady alternate charges.

Within the UK and Mainland Europe turnover remained largely unchanged over the interval, at £214 million.

For the primary half of the monetary yr, group gross sales fell fractionally yr on yr at £761 million, whereas at fixed currencies they had been up 2%. Turnover within the US rose 5% (or 11% excluding currency-related results), whereas revenues in Britain and the remainder of Europe receded 4% on a reported and fixed currencies foundation.

Steerage Unchanged

Gross sales of luxurious watches — which symbolize virtually nine-tenths of group turnover — had been flat throughout the six months to October, at £670 million, however had been up 3% at steady currencies.

Luxurious jewelry gross sales, in the meantime, had been down 17% (or 15% at unchanged alternate charges) at £47 million. Watches of Switzerland mentioned that the reversal “[reflected] market tendencies impacted by total client sentiment and by a repositioning to full worth gross sales within the US.”

The corporate saved its full-year estimates unchanged following these second-quarter numbers. Revenues are tipped to rise between 8% and 11% at fixed currencies, to between £1.65 billion and £1.7 billion.

Chief govt Brian Duffy commented that “I’m happy to report an improved quarter two buying and selling efficiency, however the troublesome client surroundings.”

He added that “our confirmed enterprise mannequin, the energy of our model partnerships, worldwide scale, daring advertising campaigns and dedication to distinctive shopper service, continues to drive the enterprise ahead.”

Development Plan

Watches of Switzerland additionally unveiled a brand new development plan by way of which it hopes to greater than double gross sales throughout the subsequent 5 years.

By the top of monetary 2028 it hopes to report gross sales above £3 billion, up from £1.5 billion within the final fiscal interval (to April 2023).

Below the plans, the group will proceed to improve and develop its international showroom community, it mentioned, in addition to hunt down acquisitions. It plans to spend between £350 million and £500 million within the subsequent 5 years to pursue this technique.

Watches of Switzerland additionally plans to double-down on the sale of luxurious branded jewelry and pre-owned watches over the interval.

Duffy mentioned that “we’re excited by the chance obtainable to us within the pre-owned market [and] notably from the brand new Rolex Licensed Pre-Owned programme, which we anticipate to ship 20% of recent Rolex within the US and 10% within the UK” by monetary 2028.

Watches of Switzerland’s shares slumped in August after Rolex introduced plans to enter the retail market by buying watch and jewelry vendor Bucherer.