Watches of Switzerland says its UK customers are still buying its luxury products online and in its regional shops, but staying away from its London shops, where footfall still remains weak.
It is now predicting its full-year revenues and profits will be higher than previously predicted.
During the Covid-19 lockdown it introduced a range of digital activities, from automated remote selling to virtual events, while improving its social and digital engagement.
The luxury watch and jewellery retailer, ranked Top500 in RXUK Top500 research, today reported “stronger than expected” sales in the first 10 weeks of its second quarter, with sales of £202.7m up 18.3% compared to the same time last year – or 20% when currency fluctuations are discounted. In the UK, sales of £145.1m to date are 12.6% higher than the previous year, with online sales up by 49.9% compared to last time.
In the US, sales of £57.7m are up by 35.2% on last time, or by 43.4% in constant currency.
Luxury watch sales, says the retailer, are outperforming, while sales of luxury jewellery have also grown in both the UK and US markets and it says its full-year revenue will come in at between £880m and £910m, ahead of the £840m to £860m it previously predicted. Earnings before interest, tax and asset write downs (EBITDA) are expected to be between one and 1.5% ahead of last year. The retailer had previously expected profits to stay at last year’s level.
Watches of Switzerland chief executive Brian Duffy said the board was pleased with a strong second-quarter performance in “unprecedented market conditions”.
He said: “Trading momentum has further improved in Q2. Stronger than anticipated UK domestic sales are offsetting lower tourist and airport traffic, whilst regional stores are continuing to outperform London stores. Furthermore, the strong momentum we have established in the US has further accelerated. All US regions are contributing to this positive trend.”
He said the company’s guidance for the rest of the year assumed “pandemic-related retail disruption in the US and the US and uncertainty in the US economy, impacting mainly in Q3.” And he added: “We do not assume any improvement in recent trends regarding the travel or tourist sectors.
“Looking ahead, we will continue to focus on our strategy by investing in high quality growth through selective capital projects and targeting marketing activity.”
The Watches of Switzerland Group sells online and through 135 shops in the UK and US, including 22 mono-brand shops in partnership with luxury watch brands.