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The Watches of Switzerland Group closes all stores

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Brian Duffy, CEO of The Watches of Switzerland Group, has expressed his gratitude to his thousands of employees for their resilience, resourcefulness and positivity throughout this period as he announces that all stores in the United States and the UK will be closed by the end of today and the company does not expect them to re-open any earlier than April 27.

The American network of stores, which includes all Mayors boutiques, closed on March 19. In all, the Watches of Switzerland Group (WOSG) has over 140 stores in the UK and United States.

Watches of Swtizerland and Mayors are focusing on serving customers through their websites, which remains open for orders and deliveries, along with concierge services where the group’s sales teams are communicating directly with their customers.

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In a trading update to the stock market and media, the WOSG says sales have increased ahead of expectations in the seven weeks to March 15, with revenue up 16.8% relative to the prior year and like-for-like sales up 12%.

New guidance says the group currently expects total revenue for the full financial year to 26 April 2020 to be in the range of £809 million to £812 million.

As the Covid-19 outbreak has escalated, the group says its sites in central London, London airports, New York and Los Angeles have been most affected, although the impact was offset by a rise in sales to domestic customers both in the UK and the US.

There is no guidance on how sales have been in the week since March 15, during which social isolating measures in the UK and the USA have been stepped up significantly, with New York in lock-down.

WOSG says its balance sheet sheet is strong and it has significant financial headroom and liquidity.

But it has taken steps to eliminate discretionary expenditure, reduce working capital and where possible, delay capital projects.

It welcomes government measures announced in the UK of business rates suspension, employee cost support and tax payment deferrals, which are expected to have a positive impact on cash planning. It has not commented on US government plans.

The Group has taken steps to ensure the continuity of its ecommerce business, with online operations expected to be continued as normal,” a WOSG statement says.

“Our priority is the health and wellbeing of our colleagues and customers during these unprecedented times. We are taking the necessary steps to mitigate and minimize the impact of this crisis on our business,” Mr Duffy says.

“We are anticipating a continuation of the store closures into our new financial year which begins on 27 April 2020. We remain confident in the strong fundamentals that underpin the luxury watch category including its great value preservation. Demand remains strong and we anticipate that this will be the case when the market returns to more normal conditions,” he adds.

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Rob Corder

The author Rob Corder