If you have ever wondered what happened to all the Rolexes in America, look no further than across the pond to the UK where official accounts released today show a surge of 12% in sales to £367 million ($458 million) for its subsidiary.
Income rose even more sharply, with operating profit rising by 33% to £55.5 million($69 million).
The company paid £10.6 million ($13.25m) in corporation tax, another record for the operation. In a note accompanying the 2018, the company strongly asserts that as part of its reputation management, it pays all UK taxes “without any planning that is artificial or contrived and designed to reduce UK tax”.
Assuming world-wide sales of $5 billion for Rolex in 2018, it would mean that the UK — which represents 5.8% of the global Swiss watch market — is allocated more than its share of Rolex watches at around 9% of the total supply.
Little wonder that cabinets are bare across the country.
The situation in 2019 could be even worse as Rolex revealed in its accounts that it was part of a move to stockpile watches in the UK in the first quarter of 2019 ahead of what was looking — at the time the accounts were signed-off — as the key period for Britain exiting the European Union.
“The potential risk to disruption through supply delays caused by the UK’s withdrawal from the EU has been mitigated by planning to bring stock purchases forwards into the first quarter of 2019,” a note accompanying the accounts says.
In the first two months of 2019, exports to the UK by all Swiss watchmakers were up 40.9%, according to the Federation of the Swiss Watch Industry.
Brian Duffy, chief executive of The Watches of Switzerland Group, which is headquartered in the UK but owns Mayors in the United States and is rapidly building a network of its own stores here, believes that the UK does get better allocations than the United States.
“The view in Switzerland is that the UK is a very good market — disciplined, growing well and consistently high quality of presentation. As a market overall, I think we are favored. Within the market, investing and expanding is the only reliable thing you can do to positively influence availability,” he told WatchPro when asked about how the big three brands are responding to global shortages of their key steel sports models.
“It continues to be an important subject for all retailers of Rolex, Patek and AP world-wide. What we need to keep doing is investing, expanding and elevating. As you do, you are more likely to get support from these brands. That is the only thing that we have found to be reliable. Overall, the brands are very fair in how they allocate stock,” Mr Duffy adds.