Watches of Switzerland calls time on revenue slump
WATCHES of Switzerland has unveiled a return to sales growth following the end of lockdown – sending shares in the Rolex seller soaring.
The luxury watch retailer announced a rapid recovery in demand when restrictions were lifted, with domestic UK customers replacing the wealthy overseas tourists who it normally relies on.
Shares in the group shot up by nearly a quarter to close at 324.5p following the better than expected first-quarter performance.
Bosses of the firm – which owns the Watches of Switzerland, Goldsmiths and Mappin & Webb brands – said sales slumped 83pc in May compared to a year earlier after the crisis hit.
But they quickly rebounded following the easing of lockdown rules, with a 0.3pc increase in June from 2019 levels and a 7.4pc rise in July.
Overall, sales were 27.6pc lower in the three months to July 26 at £152m, with stores trading at just 38pc of their normal hours due to the continued closure of some sites and reducing opening hours. Online sales rose by 79pc.
Analysts at Barclays said the firm had demonstrated encouraging resilience throughout the pandemic.
Greg Lawless, an analyst at Shore Capital, added: “We see the luxury goods market fundamentals remaining favourable, with demand for luxury watches continuing to exceed supply.
“This, in our view, bodes well. Despite a short-term decline in tourism and airport travellers, domestic customers will be able to pick up some of the reduced demand.”
Chief executive Brian Duffy said footfall remains sluggish at its London and airport stores, with stronger interest at shops outside the capital.
He said: “We’d love to see people coming back to London. I think September is going to make a difference when schools are back and more businesses will be at work [in the capital].