Fossil UK Limited has recorded sales of £124.2 million in 2016, a 10.3% decline over the £138.4 million turnover of 2015.
Operating profit was halved, from £7.7 million in 2015 to £3.2 million in 2016.
The company does not break down sales by individual brands, but managing director Richard Collins said in accounts filed with Companies House that the hardest hit have been non-group brands.
“The company’s sales have decreased compared to the prior year, principally due to a continued softening of the fashion watch market in 2016. The largest impact was felt in non-group brands and, whilst the company has seen increases in its connected technology products, this has not completely offset the decline in traditional watch sales,” Mr Collins states.
The 2016 performance highlights the challenge of operating in today’s fashion watch market. In 2014, when Michael Kors watches produced under license by Fossil Group were on fire, Fossil Group UK turnover peaked at £152 million.
Michael Kors watches are still the market leader in the sub-£500 women’s watches category, but they are no longer the must-have fashion item they were three years ago.
Fossil UK’s decline in sales of 10% beat the wider market for watches priced at under £500, which fell by over 14% last year, according to retail analyst GfK.
Fossil Group’s strength is its broad portfolio of group brands, including Skagen and Fossil, along with a broad portfolio of licensed brands such as Emporio Armani, DKNY and Kate Spade.
This year it has been a market leader in connected watches, and is gearing up for a massive Q4 with Michael Kors touchscreen smartwatches and hybrids across brands including Fossil, Diesel and Skagen.
Every new Michael Kors watch for men launches this year has been a connected timepiece.