A report by Euromonitor International focused on luxury jewellery and timepieces in the UK reveals the sector’s sales slowed in 2012, despite value growth of 5%, totalling £1.12 billion.
The Euromonitor findings show 2012 UK watch sector growth was slightly lower than 2011’s growth. Economic uncertainty impacted consumer’s confidence in 2012, with shoppers reconsidering their spend.
The findings outline that despite increased traffic sources, the Queen’s Diamond Jubilee and the hosting of the Olympics and Paralympics in Great Britain did not boost sales to the level expected by retailers.
However, those that did spend opted to invest their money in women’s timepieces, boosting the category by 4%, up from 3.6% in 2011. However men’s timepieces reported slower growth than in 2011.
Launching in the UK
Due to the many events taking place in the UK, and in London in particular last year, Euromonitor found that many brands took the opportunity to celebrate Britain. Links of London opened a new store in Waterloo just days before the Olympics and Harrods created more space its luxury watches brands.
Fledgling brand 88 Rue to Rhone chose London, and in particular Selfridges, for its international launch just a couple of weeks before the Olympics. Rolex, meanwhile, opened a franchise store in Leeds, its first store beyond London, said to be an indication of how well the luxury segment has been performing outside the capital.
In terms of competition between luxury brands, consumers continue to value brands with a long history and heritage, as well as the Made in Switzerland label. Rolex, TAG Hauer, Patek Philippe and Omega are the most popular brands in the UK market.
Outlook in 2013 and Beyond
Looking ahead in 2013 and beyond, Euromonitor said it expects the luxury watch sector to grow in constant value terms, at a stronger rate than during its research period.
Euromonitor forecasts that, owing to the double-dip recession, jewellery is expected to fare better than watches as consumers consider it more of an investment, especially with the price of precious metals increasing.
The Luxury watch sector is expected to post a low constant value compound annual growth rate of 1% between 2012 and 2017, as the economy shows no signs of recovery.
Euromonitor also said that luxury brands may begin to offer more by way of diffusion watch lines, but in a very limited and less obvious way than in the practices taken from luxury fashion brands will continue to be selective in terms of where and with whom they retail their products, with stockists and marketing chosen to keep the exclusivity factor intact.
Read a more detailed version of the report exclusively in the April issue of WatchPro magazine.