Shares in Watches of Switzerland Group continued a month-long rally today despite the business reporting an 8% drop in sales in the UK and Europe.

That fall, over 13 weeks to July 30, was said to have been impacted by year-on-year comparison to the same quarter last year, when the company had access to a higher allocation of watches compared to this year.

Sales in the United States rose by 10% in dollar terms, or 7% when repatriated into pounds.

Anders Romberg, chief financial officer for WoSG, said average transaction values rose by around 9% in the quarter.

He suggested that 3% of that rise in ATVs was down to price rises by the brands, and the remaining 6% was due to customers buying more expensive models.

Watches of Switzerland CEO Brian Duffy continues to assert that supply constraints have the greatest impact on growth potential, and says customer demand remains strong on both sides of the Atlantic.

“We are still adding registrations of interest,” he says in reference to what were once called waiting lists.

In a conference call with analysts this morning, he announced that next month some of its Rolex doors in the UK will start offering second hand Rolex watches that have been through the brand’s rigorous Certified Pre-Owned Programme.

Prestons, a family-owned independent jeweller with four Rolex doors in the UK, today became only the second retailer in the UK, after Bucherer, to join the Rolex CPO programme.

Watches of Switzerland became part of the Rolex CPO programme in the United States in mid-July.

The scheme sees authorised dealers buying second hand Rolex watches that are more than three years old.

These are then serviced and refurbished, either by the retailer or by Rolex, and must be physically checked by Rolex before being issued with a new box and papers plus a two year international guarantee.

An 8% drop in sales for the UK and Europe was explained as a supply-side anomaly, but is likely to add weight to the argument that British luxury retailers are being hampered by ending VAT rebates for overseas visitors.

Watches of Switzerland has been a vocal lobbyist to have the rebates reinstated in order to stop tourists redirecting their spending to Continental Europe.

Group revenue for Watches of Switzerland came in at £382 million for the quarter to the end of July, which was down 1% at constant currency and down 2% at reported rates.

Watch sales dipped by 2% to £336 million, representing 88% of revenue. Jewellery sales dropped by 15% year-on-year, which was attributed to market trends impacted by overall consumer sentiment and by a repositioning to full price sales in the US.

Ecommerce sales were down by 2%.

The US market outperformed the UK and Europe, with 10% growth at constant currency delivering revenue of £163 million in the quarter.

Q1 FY24 Revenue Performance by Geography

Q1 FY24 Revenue Performance by Category

Looking ahead, the group is continuing its rollout of monobrand watch showrooms in Europe and the United States with an additional 20 boutiques in the pipeline.

In its 2025 financial year, which begins next April, the group will open its Old Bond Street Rolex flagship boutique in the summer of 2024. The project has been delayed by Gucci taking longer than hoped to move to a new showroom further north on New Bond Street.

WoSG will open an AP House in Manchester as a joint venture with Audemars Piguet in autumn 2024, around the same time it will complete the expansion of its Rolex boutique in Glasgow.

In America, the company is relocating and expanding a Watches of Switzerland multi-brand showroom in Plano, Texas, with a new Rolex agency.

The current Plano store was an acquisition of Timeless Luxury in December 2021, which did not have Rolex at the time.

Another acquisition announced at that time was of Betteridge, a historic family-owned business with a flagship store in Greenwich, Connecticut.

Mr Duffy says the company will be redesigning that showroom in the coming year.