Watches of Switzer­land calls time on rev­enue slump

The Daily Telegraph - Business - - Business - By Han­nah Ut­t­ley

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].

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