There is something poetic about Watches of Switzerland announcing today that it is planning to expand into the European Union in a month when the English football team has beaten every nation in its way from continental Europe and has only to overcome Italy on Sunday to win the European Championship.
Glaswegian WOSG CEO Brian Duffy will be quick to remind us that Scotland was the only team not to lose to England as it battled to a goalless draw in the group stages.
Win or lose on Sunday, few pundits will argue that the English are not the best team in the tournament; a position built over years of painstaking hard work, detailed analysis, raw talent and peerless leadership since Gareth Southgate took over four years ago.
Watches of Switzerland Group says it has achieved the same trick, and helped to catapult the UK to become the biggest market for luxury watches in Europe.
This is empirically true. In 2015, Swiss watch exports to the UK were worth CHF 597 million, well behind France (CHF 1.2 billion), Germany (CHF 769 million) and Italy (CHF 1.3 billion).
By 2019, with a bit of help from the weakened pound after the Brexit vote in 2016, Swiss watch exports to the UK had risen to CHF 1.4 billion, leaving every EU country in its wake.
Even in the pandemic-affected 2020, the UK remained above CHF 1 billion for Swiss watch exports, the only country in Europe to do so.
Watches of Switzerland Group can rightly claim to have been instrumental in this growth, mostly because its investment in premium luxury watch stores forced the entire market to follow suit in a spectacular race to the top by the likes of Bucherer, Laings, Berry’s, Prestons and Pragnell.
When the group entered the US market with the acquisition of Mayors in 2017, Mr Duffy told me that there was massive potential because it had not kept pace with the investment that he was putting into the UK.
He still feels that way four years’ later, saying today that the US market for luxury watches is fragmented and under-invested. That is why he believes he will achieve 25% annual growth over the pond for the next five years, making it worth almost £1 billion to the group’s turnover.
The same is true today of the European Union’s biggest countries, the group believes, and it aims to pull off the same trick in the likes of Germany and France as it has done in parts of the United States.
A statement within its five year plan says the EU luxury watch market has not grown at the same pace as the UK since 2000 and the Group believes the market is under-invested and “under-potentialised”.
That’s shorthand for a bit crap.
Many mid-sized retail groups in the EU, and I assume this applies only to those that stock Rolex, can see statements from Mr Duffy as an opportunity or a threat.
What they should not do is underestimate his intent.
With a balance sheet bolstered by a stock market listing and rising sales and profits, the group is ready to buy its way into Europe, and then mount the sort of sales and marketing blitz that will shock, awe and overwhelm any slumbering Rolex dealers who think it is good enough to have the crown above their door and to know the right people down at the sailing club.
The Italians might learn on Sunday that Southgate’s resources, drive, determination, experience, expertise and attention to every detail wear them down before overwhelming them.
Complacent luxury watch retailers in Europe should be on notice that Watches of Switzerland Group has something similar planned for them.
