Luxury demand drives Watches of Switzerland into another strong quarter
Everything’s ticking over nicely for Watches of Switzerland. The UK-listed premium timepiece retailer continued its impressive run of gains into Q3 and, importantly, stood by its full-year guidance, despite the extended lockdown period of UK store closures.
Headline news was “robust” e-commerce performance for its UK ops and “continued strong growth” in the US over the 13-week period ended 24 January.
In numbers, that meant group revenue rose 6.6% year-on-year in constant currency to £272.6 million, up 5.7% on a reported basis.
UK revenue rose 1.5% to £186.1 million, a strong result, given the pandemic-induced restrictions. For that, WoS had to thank strong e-commerce sales, up 121.1% on last year, supported by a newly-launched luxury concierge and collect service that “delivered robust initial results, and helping to offset the impact of store closures”.
It noted UK stores traded 37% of potential trading hours reflecting eight weeks of national lockdown. “Domestic sales remain strong and continue to offset lower tourist and airport business (6.6% of group revenue compared to 22.2% a year ago.
Meanwhile, US revenue jumped 19.2% currency-neutral to £86.5 million, and by 16% in reported terms.
Luxury watch sales continued to drive performance and in the first nine months of fiscal 21 represented a compelling 86% of group revenue, up from 84% in the yer ago period.
Another major plus was that higher conversion continues to more than offset lower traffic across both the UK and US, it added.
And WoS continued with its launch programme, adding to its monobrand network with eight more boutiques in the period (two Omega three Tag Heuer, and three Breitling) despite pandemic-related challenges. A further five monobrand boutiques are to open in the UK in Q4.
It also maintained its guidance for FY21 “despite UK market conditions having worsened since announcing H1 FY21 results on 17 December 2020, with the national lockdown introduced in England on 26 December 2020”.
CEO Brian Duffy said its strong performance was earned in the face of “significant headwinds, the extended period of store closures and the continued very low level of international business in the UK. Our performance is underpinned by the strengths of our leading multichannel business model and the uniquely attractive qualities of the luxury watch category, where demand continues to outpace supply”.
He added: “We have shown our strategy is working well, with initial findings suggesting we have gained further market share in luxury watches in the UK over the last year. With a strong plan for continued investment and future growth, we are well positioned to further enhance our leading position in the UK and become a leader in the US luxury watch market”.
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