Watches of Switzerland sales rise despite ‘significant’ coronavirus impact

The luxury watch specialist said group revenue increased 5.9% to £819.3m in the 52 weeks to April 26, ahead of recently revised guidance.

Sales in the UK edged up 0.6% to £591.6m, while revenues raked in from its US business jumped 22.9% to £227.7m. However, the retailer said store closures “impacted momentum” during the final six weeks of its financial year, despite a 45.8% spike in ecommerce sales during the final six weeks of its financial year, as lockdown measures drove shoppers online.

Watches of Switzerland said its financial year had been “progressing strongly” prior to the coronavirus crisis. In the first 46 weeks of its year, to March 15, group sales jumped 15.8% and like-for-likes advanced 9.3%.

Total UK sales climbed 9.4% during that period, with like for likes growing 9.2% year on year.

The retailer said full-year EBITDA would come in between £75m and £78m, but it has scrapped financial guidance for the 2020/21 fiscal year amid “ongoing uncertainty”.

Watches of Switzerland boss Brian Duffy said: “Prior to the Covid-19 pandemic, the group had been on track to deliver double-digit sales growth, reflecting our strong brand partnerships, favourable market conditions and accelerating momentum in the US.

“Despite the current challenges, demand for luxury watches has remained strong with online sales performance ahead of our expectations. Through our longstanding partnerships with the most prestigious Swiss watch brands, we have further enhanced the online customer experience with the introduction of additional brands which we had previously only transacted in our stores.”

The retailer has already started to reopen stores in Florida and Georgia, where “the experience of those colleagues and customers has been positive”.

Duffy said the business is working to ensure that its other stores can open “safely and in line with best practice” in the coming weeks and months.

On the longer-term outlook, he added: “We remain confident the strong fundamentals that underpin the luxury watch category remain intact and will do so as we emerge from the current situation.

“Luxury watches continue to be a supply-driven segment with robust demand and unique value preservation characteristics. Longer-term, we are well-positioned to deliver on our plans to leverage our leading position in the UK and become a leader in the US luxury watch market.”