Watches of Switzerland powers ahead, both UK and US are strong
Watches of Switzerland seems to have come through the lockdown and post-lockdown period in good shape and on Tuesday, its Q2 trading update told us that it’s actually done better than it had hoped.
The first 10 weeks of Q2 (which ends on October 25) have generated revenue of £202.7 million. That’s up 20.2% year-on-year in constant currency and +18.3% on reported basis.
Its UK performance continues to be driven by strong domestic sales, which seem to be making up for the sales to tourists and at airports that are usually so strong but that have been hurt by the current crisis.
The figures make the downturn in tourist/airport sales very clear. A year ago they accounted for 32.5% of Q2 group sales but in the quarter so far (with only three weeks left to go), that figure is just 9.2%.
And in a further sign of the tourist impact, the company also said that regional stores continued to outperform London stores where footfall remains weak.
UK Q2 sales to date are up 12.6% to £145.1 million with e-commerce sales 49.9% higher.
In the US, "momentum has further accelerated with an exceptionally strong and broad-based performance in the quarter to date”. That means sales so far of £57.7 million, up 43.4% in constant currency and 35.2% on a reported basis.
WoS added that luxury watches have “continued to outperform” while luxury jewellery has “performed well with growth in both the UK and the US markets”.
New product launches “have also been stronger than anticipated with a positive influence on sales” and the firm said it’s seeing "continued encouraging customer response and resultant sales conversion through CRM and ‘clientelling' activities and appointment management".
The company recently acquired Analog Shift, a US retailer of vintage and pre-owned watches “to further advance the group's strong and growing position in the US”. And it said that recently-acquired four Fraser Hart stores have seen a “continued positive performance”.
And in the last couple of weeks it has also opened a Tudor Boutique in the giant Westfield mall at White City London. It’s the first in Europe.
It all sounds like good news and has led the firm to revise its FY21 guidance upwards with revenue expected to be between £888 million and £910 million, much better than the £840 million to £860 million previously predicted.
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