Britain’s biggest Rolex seller loses almost third of its value

AROUND a third has been wiped off the value of Britain’s biggest Rolex seller after it warned that the deterioration in luxury demand is unlikely to improve this year.

Shares in Watches of Switzerland plunged to their lowest level since late 2020 yesterday, falling by 33pc after it warned on profits.

Brian Duffy, the chief executive, said: “The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel.”

Despite raising concern about the trend, he said the retailer was still stealing market share from rivals in the US and UK.

Watches of Switzerland now expects revenues to come in between £1.53bn and £1.55bn for the full year to the end of April.

This is down from earlier forecasts of between £1.65bn and £1.7bn.

This means that on a constant currency basis, revenues will rise by 2pc or 3pc this year, down from previous forecasts of between 8pc and 11pc.

Watches of Switzerland, which also sells luxury jewellery made by Cartier and watches by Audemars Piguet, said it compiled its latest forecasts based on discussions with key brands.

Its drop-off is the latest sign of softer luxury demand, with Mulberry and Burberry both pointing to weaker sales.

Burberry was last week forced to issue its second profit warning in three months amid a spending slump.

In the UK in particular, demand for luxury goods has plunged – driven largely by the Government’s decision to scrap tax-free shopping for tourists after Brexit.

Mulberry this week said the levy had weighed on sales during the festive period.

Watches of Switzerland, meanwhile, has previously been highly critical of the policy which it blamed for lower footfall in airport stores.

As of last August, revenues at its Gatwick and Heathrow boutiques were less than half their pre-pandemic levels.

Mr Duffy said there was “no incentive” for tourists to spend money in the UK over countries such as France and Spain, where tax-free shopping schemes are still in place.

Analysts at Jefferies said Watches of Switzerland’s update was fresh evidence of softness in the luxury market.

The analysts said: “This is especially true in the UK, in unbranded jewellery and in mid-market watches.”