Watches of Switzerland profits soar on back of ‘robust’ UK and US markets

For the half-year ending October 27, 2019, the luxury watch retailer reported that adjusted profit before tax was up 112% to £26.5m.

Wider group revenue for the period was up 17.3% to £428.7m, with 10.3% like for like sales growth.

In terms of individual markets, UK revenues jumped 10.6% to £317.6m, with like for likes up 11%, while US sales soared 42.1% to £111.1m, boosted by new showrooms with a 7.5% spike in like for likes.

Of those sales, luxury watch revenue was up 21.6% to £365.5m, but luxury jewellery revenue fell 2.5% to £31.5m.

Adjusted EBITDA rose 23.5% to £41.2m, with adjusted earnings before interest and tax of £31.1m, up 23%.

Watches of Switzerland said that trading in the first half of the 2020 financial year had been positive and that the markets for luxury watches “remain robust in both the UK and the US, as illustrated by demand in the first half generally exceeding supply”, and that profitability had improved.

The retailer also today announced that it had acquired four new showrooms currently trading under the Fraser Hart brand name.

The showrooms are in Stratford, Brent Cross, Kingston and York and will “expand the group’s store portfolio in strategic locations that align with the group’s brand offerings”.

Once completed, two showrooms will be rebranded as Watches of Switzerland – Stratford and Brent Cross – with the other two becoming Mappin & Webb showrooms.

Chief executive Brian Duffy said: “I am delighted to report our first half-year results as a listed business. Strong progress was made in both the UK and US markets as we continue to deliver on our growth plans.

“The growth in revenue and profitability is a testament to the distinctive luxury experience we provide. Customers continue to react very positively to our showroom portfolio elevation programme - as reflected in increased average selling price, conversion rates, and sales uplift. Our showroom projects in the UK and US have been a success in the year to date.

“Our omnichannel strategy continues as we expand our mono-brand programme in the UK along with mono-brand openings planned in the US, expansions in UK Travel retail and continued momentum online.”