Watches of Switzerland chief executive Brian Duffy has called on the government to reverse the “mistake” of ending duty-free shopping benefits in the UK.
“I think it’s a mistake,” the luxury retail boss told Retail Week. “It’s going to dissuade tourism and significantly dissuade tourism spend.
“I think it’s already evident from what I’m hearing in the luxury market that tourists have to some degree returned to the EU, but we’re just not seeing that here at all.
“We’ve made lots of representations to the government, and myself and others are hopeful that they’ll listen, see the evidence of tourists shopping in Paris and Milan, and change their minds. We’re not assuming in any of our numbers that it will change, but we’re hoping that common sense will prevail.”
From January 2021, changes to duty-free shopping rules mean overseas visitors can no longer claim VAT refunds in British shops.
As part of its plans to overcome the limits of the government’s decision, Watches of Switzerland is setting its sights on expansion in Europe, where it can directly bypass Brexit challenges and still profit from tourism spend on the continent.
Duffy added: “Our analysis of the European market is that it’s less developed than the UK.
”The UK is the best luxury watch market in the world. We’ve proven that our model is transportable for sure – the US market was underdeveloped five years ago, we then made our steps in the US and the results have been positive, actually beyond our expectations.
“We see a similar opportunity in Europe, but it takes time to work out the brands, landlords, etc.”
Duffy predicts that the EU could make up between 6% and 8% of the group’s total revenues by FY2026, which amounts to £140-£150m.
The retailer has announced that the first countries it will be entering into are Sweden, Denmark and the Republic of Ireland.
Duffy said: “We will go wherever we see opportunities in the EU. Generally, Scandanavia is underserved with retail and when we looked at the watch market we saw that, too.
“We’re actively looking at opportunities throughout; these are the first ones that we’ve managed to get done. We will only announce them when they’re signed and sealed.”
- Don’t miss the best of the week – sign up to receive the Editor’s Choice every Friday
No comments yet