Sales for The Watches of Switzerland Group rose by 7% in the UK and 32.3% in the United States in the 13 weeks to January 26, adding up to worldwide revenue of £258 million for the Christmas and New Year trading quarter, up 13.4% at constant currency.
Like-for-like, same-store growth was 9% in the United States and over 32% in total; evidence that new stores are adding significantly to American sales.
The UK accounts for 71% of sales, the United States 29% for the group, which went public on the London Stock Exchange in May last year.
The quarter ended just as the Coronavirus crisis was beginning to emerge in China, so would not have affected sales, but the group is monitoring the situation, according to CEO Brian Duffy.
He points out, however, that demand for luxury watches continues to run ahead of supply, and does not issue any sort of warning for the group’s shareholders on how Coronavirus might affect its plans this year.
“Looking ahead to the final quarter of the current financial year, improved visibility of luxury watch supply leaves us confident that we are on track to meet guidance for the full year,” Mr Duffy says.
“We continue to monitor the effects of the ongoing coronavirus outbreak on the wider market and global trade. However, as demand for luxury watch brands in the UK and US continues to exceed supply, the strong fundamentals of our supply-driven business leave us well positioned to continue to deliver on our plans to leverage our leading position in the UK and to become a leader in the US in luxury watch retail,” he adds.
Luxury watches now account for 81% of group sales, and Mr Duffy says several brands delivered double-digit growth.
Virtually all luxury watch brands have increased their prices significantly in the UK since the corresponding quarter in 2019. The wider UK market has seen the total value of luxury watch sales continuing to rise while unit sales have declined, according to retail analyst GfK.
The acquisition of four Fraser Hart stores was due to have been completed in the quarter, but the company says there has been a delay in the final completion. “We expect it to close imminently,” Mr Duffy says.
“The sales performance during the third quarter was broad-based with several brands delivering double-digit growth. Our Christmas trading in the UK was strong despite the competitive and promotional wider market backdrop. Holiday sales were also strong in the US in what were overall positive trading conditions. Our jewellery business performed well relative to the market with positive customer reaction to the new ranges,” concludes Mr Duffy.