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Watches of Switzerland Group increases sales despite third UK lock down

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The multi-brand Watches of Switzerland boutique is joined by monobrand openings from Rolex, Omega and Breitling at the Wynn Resort in Las Vegas.

Watches of Switzerland Group is continuing to write its own story of retailing during the pandemic, shrugging off social distancing measures in the United States and a third lock down in the UK to post year-on-year sales growth of 6% for the quarter ending January 24.

Revenue of £272.6 million ($365m) for the Christmas and New Year trading period might have been even higher if the group could get its hands on more watches, particularly from Rolex.

“Our performance is underpinned by the strengths of our leading multi-channel business model and the uniquely attractive qualities of the luxury watch category, where demand continues to outpace supply,” WoSG CEO Brian Duffy asserts.

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The retailer’s share price hit an all-time-high of 661p this morning, up from a low of 179p in April last year.

WoSG has 138 stores across its networks in the UK and United States (based on October 2020 data).

Its UK stores were open for only one-third of the quarter because of a current national lock down, but the group still posted growth of 1.5% on that side of the Atlantic.

No information was supplied for how many weeks of trading were lost at stores in the United States, but the majority are Mayor’s stores in Florida, which has kept retail open. The group’s American business grew by more than 19% at constant currency to £86.5 million for the 13 week period.

Ecommerce revenue rose by 121% YoY, despite the fact that Rolex, Audemars Piguet, Patek Philippe and others do not allow online sales.

Today’s financial report does not say what percentage of WoSG turnover comes from ecommerce, but it is unlikely to be more than a single- or low double-digit percentage because Rolex accounts for over 50% of turnover.

CRM and clienteling [where consultants reach out directly to customers through phone calls, email and messaging apps] play an important role in driving business performance, the company says.

“We continue to provide an exceptional customer service during these unusual circumstances, making further enhancements to our customer relationship management, ecommerce and clienteling capabilities through the introduction of our luxury concierge and collect service and the launch of our new virtual boutique,” Mr Duffy describes.

Luxury watches now account for 85% of group turnover, with the contribution from luxury jewelry dwindling to just 8%.

Tourist and airport business has dropped from 22.2% of group turnover a year ago to just 6.6% in the latest quarter.

In forward guidance, the group says it does not expect stores in the UK to reopen until late March 2021 at the earliest; while no impact is assumed from any lock down on US retail activities and on production in Switzerland.

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