Watches of Switzerland Group, a leading luxury watch retailer, has reported impressive trading performances in both the UK and US markets, signaling a strong finish to the year. Despite the numerous challenges that the retail industry has faced throughout the past year, the group achieved robust UK trading and exceptional results in the US for both the 14-week and 52-week periods ending on 2 May.
In the final quarter, the group experienced a significant increase in revenue, with a remarkable 81.8% growth at a constant currency (+76% reported) to reach £218.2 million, surpassing the previous year. The UK revenue demonstrated a rise of 49.3%, reaching £126.2 million, and only experienced a slight decline of 2.7% in comparison to Q4 FY19. The standout highlight of the quarter was the extraordinary growth of e-commerce sales, which boasted an impressive 218.1% increase.
The reopening of UK stores after a prolonged closure since 26 December played a crucial role in driving strong growth. Furthermore, the group’s expansion of its monobrand channel with the opening of three new boutiques contributed to the positive performance. The US market showed an even more outstanding performance, with a revenue increase of 151.4% at a currency-neutral rate (up 133.6% reported) to £92 million in Q4 FY20. In constant currency, this represented a 95.9% increase relative to Q4 FY19. Strong momentum was observed in several stores, such as Mayors in Florida and Georgia, and Watches of Switzerland in New York, while the relaxation of restrictions in Las Vegas also contributed to improving trends. The group’s recent launch of e-commerce in the US market and the successful opening of eight new monobrand boutiques have shown promising results.
These strong results in the fourth quarter have further bolstered the group’s overall 12-month figures. Group revenue for the year increased by 13.3% at a currency-neutral rate (+11.7% reported) to £905.1 million, exceeding the previous year’s performance. In constant currency, the increase was even more significant, reaching 17.9% compared to FY19. Despite the extended lockdowns experienced in Q4, UK sales remained in line with expectations. The year-end revenues in the UK demonstrated resilience, with a 3.6% increase compared to FY20, despite store closures for approximately 26 weeks and a significant decline in tourism and airport business. Luxury watch sales accounted for 87.1% of the group’s revenue, representing a 16% increase from FY20.
The group’s e-commerce sales experienced a substantial growth of 120.5% compared to the previous year, further solidifying its digital presence. In the US market, the group saw positive results, with a 38.5% increase in revenue compared to FY20 and a remarkable 64.8% increase compared to FY19, both in constant currency. Investments and strategic initiatives surpassed expectations and played a pivotal role in driving broad-based growth in the US market.
Looking ahead to fiscal year 2022, the Watches of Switzerland Group expects a gradual recovery in footfall and does not anticipate any supply disruptions or national lockdowns in its markets. However, the group does not expect the return of tourism and airport business to pre-pandemic levels during the year. The group’s projections for the fiscal year range from £1.05 billion to £1.1 billion in revenue. EBITDA and adjusted EBITDA are expected to remain flat or slightly increase by 0.5% compared to the previous year. The group also has exciting plans for store expansion, primarily in the US, including the opening of a new Watches of Switzerland store in London’s Battersea.
In conclusion, the Watches of Switzerland Group has demonstrated its resilience and success in navigating the challenges faced by the retail industry. The group’s strong trading performances in both the UK and US markets showcase its ability to adapt and thrive in the ever-changing retail landscape. With a positive outlook for the future and strategic plans for expansion, the group is well-positioned for continued growth and success.
Useful links:
– WatchTime: A leading watch magazine providing industry news, reviews, and insights.
– Retail Dive: A comprehensive source for retail industry news and analysis.
