Turnover at family jeweller Robert Gatward Jewellers Limited rose by almost 13% in the year ending September 2017 to £10.75 million.
Operating profit of £1.34 million was achieved, but growth in profit was limited as costs rose faster than sales.
The increase in turnover was attributed to an additional Robert Gatward store that opened in 2016 contributing a full year of sales.
“Despite the increase in turnover, the company’s gross profit margin saw a decline to 41.7% this year from 45.3% last year, which impacted on overall profitability,” said Robert Gatward managing director Keith Gill in a statement accompanying the 2017 accounts.
Along with the additional store, the company has also been investing in its infrastructure and staff.
“The company continues to develop its website and expend funds on general marketing and staff training to ensure staff offer a high quality customer service and a knowledge of the range of products on offer,” Mr Gill describes.
Speaking to WatchPro this morning, Mr Gill says he is operating in an environment that is “the most challenging in all our time on the high street”.
Asked whether the dip in profit margins was a one-off or a new normal, he replied: “Most definitely the new normal. To remain both robust and competitive margins have to reduce.”
Robert Gatward has six stores in the South and East of England. Ipswich and Windsor stores are authorised Rolex agents while other stores and the online business stocks brands including Breitling, Cartier, Omega and TAG Heuer at the top and, plus volume brands such as Michael Kors and Citizen.
Robert Gatward sees the affordable end of the jewellery and watch market migrating towards fashion retailers; a development that suits the company.
“Fine jewellery and watches have continued to out-perform volume brands. I feel that at the very volume end fashion retailers are now seen as the destination of choice for this type of product. This is perfect as it allows to develop further the fine jewellery and watches that we are known for,” Mr Gill says.
Premium watch brands and quality diamond jewellery will be the most successful categories this year, he adds.
2018 will see further investment in improving Robert Gatward’s digital presence, although Mr Gill hopes this will attract people into stores.
“We are looking to achieve a seamless integration between our online [and store] presence. Web presence is pre-requisite of our business moving forward. Ecommerce is always a bonus but completing the client’s journey is our goal,” he explains.