London could become the primary target for luxury watch retailers seeking to open their own monobrand stores as the city’s growth potential exceeds other key global markets, new research suggests.
Eleven monobrand stores have opened in the city since 2010 with another six expected to open before the end of 2016.
Although research from Savills shows London ranked joint lowest with New York, with just 22 luxury watch monobrand stores each, growing tourist numbers and affluence profile in the capital make it increasingly attractive to luxury watch brands, according to the firm.
The firm examined the presence of 45 luxury watch brands with their own boutiques in 11 key gateway cities to create a supply ranking. The analysis revealed that Singapore is the top global market with 37 brands present, followed by Paris with 33 and Hong Kong with 30.
The firm states that cheaper visas for Chinese nationals could help increase visitor spend in the capital which, combined with an exchange rate that is currently favourable to international visitors, will further boost London’s appeal to luxury watch brands. This is backed up by recent West End sales data: luxury retailers reported a 13% increase in sales in June 2016 compared to same month in 2015 despite sales across the area being down by -5.9% overall.
Paris and Geneva are the top European markets for luxury watch boutiques with 33 and 24 respectively. Many brands originated from Switzerland and, to a lesser extent, France who have always had a presence there. However, when considering the top 10 global markets for Swiss watch exports, Savills states that the UK was one of only two countries to report an increase in the value of exports in July 2016 compared to July 2015 (+13.5%), partly boosted by the weaker pound in the wake of the EU referendum.
This was followed by Italy which saw a 9.9% increase in July 2016 compared to July 2015. There are currently nine brands with monobrand stores in Paris but not yet in London, which could now be looking across the Channel for potential growth, says Savills.
Marie Hickey, commercial research director at Savills, said: “The growth in luxury watch boutiques over the last 10 years has focused on Asia Pacific markets due to strengthening demand and cheaper property costs. By contrast, the high cost of opening a monobrand store in London and New York has seen many brands take space in department stores or specialist watch stores instead, explaining why the number of boutiques in these cities is so much lower.”