Shoppers turned online to buy luxury watches during lockdown, new figures from Watches of Switzerland suggest.
Strong ecommerce sales helped Watches of Switzerland to grow its revenues for the year despite the effect of lockdown on the final six weeks of the period. Online sales in the UK market had grown by 15.9% during the first 46 weeks of the year - to March 15 – but during the six weeks of lockdown alone – to April 26 – ecommerce sales grew by 45.8% across the whole of the business, which also sells in the US. In April alone, online sales were up by 82.8% compared to the previous year. This was helped as the group added several brands to its online range that it had previously only sold in stores. The retailer now expects that tools including online shopping, clientelling and customer relationship management will now become more important as airport and shop visitor numbers remain low.
Watches of Switzerland chief executive Brian Duffy said: “Despite the current challenges, demand for luxury watches has remained strong with online sales performance ahead of our expectations. Through our longstanding partnerships with the most prestigious Swiss watch brands, we have further enhanced the online customer experience with the introduction of additional brands which we had previously only transacted in our stores.”
He added: “As we look ahead to a post lockdown environment, we are anticipating a prolonged period of lower traffic, particularly in airports, with ecommerce, CRM and clienteling continuing to gain importance.”
The news came as the luxury watch retailer this week said in a pre-close trading statement that group revenues were up by 15.8% in the first 46 weeks of the year, compared to the same time last year, with sales up both in the UK (+9.4%) and US (+36.4%). Luxury watch sales were up by 19.3% on last year.
The effect of lockdown was to close all shops in both the UK and US, hitting sales in the final six weeks the financial year, to April 26. Full-year sales rose by 5.9% to £819.3m, with positive figures both in the UK, where full-year sales were up by 0.6% and the US, where they rose by 22.9%. Strong online sales were a key factor in this.
“We have also been highly proactive in identifying areas of cost savings while introducing measures to preserve cash and mitigate the impact of store closures, all whilst continuing to maintain full salary entitlement for all our colleagues. We are also pleased to have further strengthened our liquidity headroom, which means we can sustain a closure of our entire store portfolio for a prolonged period of time.
"We are working hard behind the scenes to ensure that when our stores do re-open, they do so safely and in line with best practice so that our customers and colleagues will be able to shop and work confidently in a safe and healthy environment.”
Duffy said that the retailer was already reopening shops in Florida and Georgia and so far the experience of staff and customers had been positive.
“We remain confident the strong fundamentals that underpin the luxury watch category remain intact and will do so as we emerge from the current situation. Luxury watches continue to be a supply-driven segment with robust demand and unique value preservation characteristics. Longer term, we are well positioned to deliver on our plans to leverage our leading position in the UK and become a leader in the US luxury watch market.”
Watches of Switzerland sells from 127 showrooms in the UK and US, including 22 ‘monobrand’ sites run in partnership with luxury watch brands, as well as online.
The retailer has added new financing of £45m in order to improve its cashflow, giving it the ability to borrow £265m in total if needed. Its debt stood at £131.4m as of April 26.
Image: screenshot of watches-of-switzerland.co.uk