The latest data from retail consultant GfK show the value of sales for watches priced at under £500 declining by 8.1% in September.
The price segment has actually stabilised — or found a floor — over the past year, with sales flat year-on-year for the 2 months to September, but the long term trend for well over five years has been relentlessly down for this volume part of the market.
This is the context for a remarkable set of financial results for Zeon Ltd, which owns or licenses watch brands including Ingersoll, Braun, Vivienne Westwood and Jack Wills, all of which operate in the sub-£500 space.
The business has been remarkably resilient, given the performance of the sector around it, with annual sales fluctuating around £8-10 million for the past decade, but its investment has run ahead of turnover during difficult years from 2016 to 2020, resulting in a run of operating losses.
That investment in people, technology and brand development is now paying off with Zeon posting a year of record sales, at over £12 million, and a spectacular operating profit of almost £2 million, more than double last year’s £900,000.
Online sales are key to Zeon’s brands, and the business has focused on helping its retail partners and improving its own direct to consumer sales.
Direct sales mean higher margins, which comes some way to explaining the record profit for the year ending March 31, 2022.
“The investment in our e-commerce business continues, with a clear expectation of margin growth being enabled through a continual process of review and adaptation,” says Zeon managing director, Simon Gilham.
“We have found that great customer experience is paramount to strengthening our brand equity and securing a successful sales retargeting programme that delivers growth whilst maximising profits. With this in mind we have implemented new relationship management tools and initiatives across the business,” he adds.
