Watches of Switzerland Group, a leading luxury watches and jewellery retailer, has announced impressive annual results for the year ending May 1, 2022. The company reported a remarkable 40% increase in revenue and a 68% rise in adjusted EBIT (earnings before interest and taxes). This outstanding performance can be attributed to several factors, including the company’s strong business model, favorable market conditions, and successful international expansion.
CEO Brian Duffy expressed his satisfaction with the group’s achievements, especially considering the strong comparisons with the previous year. He described it as “a tremendous year for the group, producing record sales and profits.”
Watches of Switzerland Group owns several well-known brands, such as Watches of Switzerland, Mappin & Webb, Goldsmiths, Mayors, and Betteridge. In addition, the company operates mono-brand showrooms for renowned watchmakers like Rolex, Omega, TAG Heuer, Breitling, Tudor, Audemars Piguet, Grand Seiko, Bulgari, and Fope.
The reported revenue increase of 37% translates to £1.238 billion for the latest financial year. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached £162 million, while adjusted EBIT reached £130 million. Furthermore, the group’s statutory operating profit rose by 74% to £142 million, and statutory pre-tax profit nearly doubled to £126 million.
The strong performance of Watches of Switzerland Group was observed in both its key markets. In the UK, constant currency sales grew by an impressive 36% to £810 million, while in the US, they increased by 48% to £428 million. The company credits this success to the sustained demand for luxury watches and jewellery, as well as the growth in average selling prices across its various brands. Additionally, the company’s e-commerce sales increased by 5% compared to the previous year and by an astounding 128% compared to FY20. Moreover, Watches of Switzerland Group made significant progress in expanding and refurbishing its stores.
Luxury watch sales experienced a significant increase of 36% during the financial year 2022, indicating strong demand in both the UK and US that surpassed supply. Luxury jewellery sales also performed exceptionally well, with an impressive 86% increase. This growth can be attributed to a robust market, improved product ranges, incremental growth from the Betteridge acquisition, and the opening of the company’s first Bulgari monobrand boutique.
Despite the global pandemic’s impact on travel, Watches of Switzerland Group noted the exponential growth of travel retail in the UK following the relaxation of restrictions. While passenger numbers and global travel still remain below pre-pandemic levels, the Easter holiday period showed an improvement in passenger numbers, and the company expects strong numbers throughout the summer. However, the removal of tourist VAT-free shopping as a result of Brexit is expected to lower conversion rates at airports, making a return to pre-Brexit levels unlikely. To mitigate this, Watches of Switzerland has renegotiated contracts for its showrooms at Heathrow Airport, ensuring profitability even with reduced passenger levels.
With recent expansion into Europe, including the opening of a Breitling monobrand boutique in Stockholm, Watches of Switzerland Group is optimistic about the current financial year. The company has already secured agreements for five additional monobrand boutiques in Sweden, Denmark, and the Republic of Ireland, scheduled to open in FY23. The company’s guidance for the current year estimates revenue to be between £1.45 billion and £1.5 billion on a pre-IFRS 16 basis, with a range of flat to 0.5% growth in adjusted EBITDA.
For more information about Watches of Switzerland Group’s achievements and future plans, visit their website [link to website]. Additionally, for insights into the luxury watch and jewellery industry, [link to relevant article or industry report] provides valuable information.
