Luxury watch firm’s growth running slower after Covid-19 shutdown
Leicester-based luxury items retailer Watches of Switzerland Group’s full-year results have been predictably hit by the coronavirus pandemic.
The firm, which saw “strong” trading during first 46 weeks to 15 March 2020 with revenue up 15.8%, across both UK (up 9.4%) and US (up 36.4%), driven by luxury watches up 19.3% against 2019 figures
However, full-year revenue increased by just 5.9% to £819.3m after Covid-19 related closures of all stores in the UK and US impacted momentum in final six weeks of the year.
Brian Duffy, chief executive, said: “The health and wellbeing of our colleagues and customers remains our priority throughout this challenging time and beyond. I am incredibly proud of the response from our teams, demonstrating unwavering resilience, teamwork and dedication.
“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.
“We have also been highly proactive in identifying areas of cost savings while introducing measures to preserve cash and mitigate the impact of store closures, all whilst continuing to maintain full salary entitlement for all our colleagues. We are also pleased to have further strengthened our liquidity headroom, which means we can sustain a closure of our entire store portfolio for a prolonged period of time.
“We are working hard behind the scenes to ensure that when our stores do re-open, they do so safely and in line with best practice so that our customers and colleagues will be able to shop and work confidently in a safe and healthy environment. Store openings are proceeding in Florida and Georgia in the US and to date, the experience of those colleagues and customers has been positive. As we look ahead to a post lockdown environment, we are anticipating a prolonged period of lower traffic, particularly in airports, with ecommerce, CRM and clienteling continuing to gain importance.
“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.”
