Watches of Switzerland today said ecommerce sales more than doubled in its latest financial year as customers responded to its international and multichannel model and as it invested in areas from digital marketing to CRM.
The luxury watch retailer, ranked Top500 in RXUK Top500 research, today reported ecommerce sales 120.5% ahead of the previous year in a full-year trading update. Online sales, it said, were boosted by advanced digital marketing, customer relationship management and clienteling. Across all sales channels, group revenue rose by 11.7% to £905.1m in the 53 weeks to May 2 2021 – from £810.5m last time. The growth came despite a longer than predicted 16-week lockdown in the fourth quarter of the year.
Over the full year, UK sales grew by 3.6%, despite stores closing for 42% of potential trading hours and despite reduced business from tourism and in airports. Watches of Switzerland saw faster growth in its US market, where revenue rose by 32.7% on the previous year and where shops were open for 67% of potential hours. Overall, its shops were closed for 26 weeks of the year.
Luxury watch sales grew in the full year by 16% on the previous year, to represent 87.1% of group revenue – up from 83.9% last time. But luxury jewellery sales fell by 12.1% to £60.8m. Most sales were from domestic (94.7%) customers in each of its markets – up from 72.5% in the previous year. Full-year pre-tax profits are expected to come in at between £104m and £107m – up from £78.1m in 2020.
In the fourth quarter alone – the 14 weeks to May 2 – group revenue grew by 76.1% to £218.2m, with UK sales 49.3% ahead at £126.2m, and US sales 133.6% ahead at £92m. Watch sales grew by 87.3% to £195.1m, while luxury jewellery sales fell by 18.5% to £11.7m. The retailer said sales were high in its New York, Florida and Georgia stores, with sales improving in Las Vegas. It has also seen early encouraging performance after relaunching luxury jewellery in its US-based Mayors business, and that sales
Brian Duffy, chief executive of Watches of Switzerland, says: “Throughout the year we either met or exceeded our guidance despite the changing circumstances, in particular the much longer-than-expected last lockdown in the UK. In the UK, we delivered a very robust performance, overcoming a total of 26 weeks of store closures and hugely reduced travel and tourism business. In the US we generated an outstanding result with very strong momentum.
“We responded to the challenging environment by increasing investment in Capex, digital marketing, systems and stock which has resulted in the positive momentum that we carry into FY22. Our guidance for FY22 reflects our confident outlook for the luxury watch and jewellery categories and the success of our modern, international and multichannel model.”
Looking ahead, the retailer expects its sales to pass £1bn in the coming year, and it plans store openings in both the UK and the US.
Watches of Switzerland now plans to repay all of the support it received for furloughing staff during the year, and it has also repaid and cancelled a £45m coronavirus business interruption scheme loan because of strong performance. Now the business is to launch a Watches of Switzerland foundation to offer support to its local communities in the UK and the US, with an initial £1.5m contribution and a further £1.5m in the next financial year.
