Watches of Switzerland Group, a prominent luxury watch retailer, has reported a strong start to the fiscal year 2023, benefitting from high demand and favorable market conditions. In the first quarter, the company achieved an impressive revenue of £391 million, representing a substantial 25% increase at constant currency rates compared to the previous year. This growth was primarily driven by a surge in luxury watch sales, which rose by an impressive 32% to reach £342 million. Additionally, luxury jewelry sales experienced a significant boost, with a 36% increase amounting to £27 million.
The group also witnessed growth in its e-commerce sales, recording a 14% rise compared to the previous year. This demonstrates the company’s ability to adapt to changing market dynamics and cater to the needs of its customers in an increasingly digital-focused era.
During the quarter, Watches of Switzerland expanded its presence by opening its first European monobrand boutique in Stockholm. Looking ahead, the company plans to open five more showrooms throughout the financial year, highlighting its commitment to further expanding its market share.
Another area of success for Watches of Switzerland is its thriving pre-owned business. After successfully relaunching Analog:Shift in the US and investing in its UK resources, the company has witnessed positive growth in this segment. This success is attributed to the company’s dedication to maintaining competitive pricing and margins across all its business segments.
In terms of geographical performance, Watches of Switzerland experienced remarkable growth in both the US and the UK. In the US, revenue increased by a striking 76% at constant currency rates and an impressive 100% at reported rates. In the UK, revenue grew by 8%, driven by a resilient domestic clientele. The company also saw a notable recovery in its airport business as travel restrictions eased, leading to the reopening of all airport showrooms.
While Watches of Switzerland acknowledges the uncertainties surrounding the macroeconomic environment, it remains optimistic about the future. The company believes that the strength of the luxury watch category and the success of its business model will support sustainable long-term sales growth. It is, however, mindful of the potential challenges that may arise in the second half of the fiscal year.
For the fiscal year 2023, Watches of Switzerland expects its revenue to range from £1.45 billion to £1.5 billion, and it anticipates adjusted EBITDA to remain flat to up 0.5%. Despite these projected challenges, the company remains dedicated to attracting new clients and increasing its market share in both the UK and the US. Additionally, Watches of Switzerland is investing in its multichannel model and launching new projects to strengthen its position in the luxury watch industry.
One notable project in the pipeline is the relocation of its current Rolex Boutique on Bond Street to a new flagship location on Old Bond Street in 2023. This move signifies the significance of the London market and Rolex’s history, further solidifying the company’s commitment to providing exceptional experiences to its customers.
Useful links:
1. Watches of Switzerland Group
2. Rolex
