Watches of Switzerland has reported rising sales across channels in its latest half-year results, but a bottom-line pre-tax loss.
The luxury watch business, whose primary brand is ranked Top350 in IRUK Top500 research, has reported group revenue of £428.7m in the half-year to October 27, up by 17.3% on the same time last year. UK revenue rose by 10.6% to £317.6m, with sales up both in its showroom stores (+10.4%) and online (+12%). But at the bottom line, pre-tax losses came in at £9m following accounting changes and one-off costs of £34.2m related to its stockmarket listing.
It said the market for luxury watches continued to be buoyant, with sales up by 21.6% to £365.5m – accounting for 85% of income – although its turnover from luxury jewellery fell by 2.5% £31.5m.
Today the retailer also said it had bought four stores from Fraser Hart for an expected £31.7m in a deal expected to complete in January. Stores in Stratford and Brent Cross will be rebranded as Watches of Switzerland, while those in Kingston and York will become Mappin & Webb stores.
Watches of Switzerland chief executive Brian Duffy said: “I am delighted to report our first half year results as a listed business. Strong progress was made in both the UK and US markets as we continue to deliver on our growth plans.
“The growth in revenue and profitability is testament to the distinctive luxury experience we provide. Customers continue to react very positively to our showroom portfolio elevation programme – as reflected in increased average selling price, conversion rates, and sales uplift.
“Our showroom projects in the UK and US have been a success in the year to date. Our omni-channel strategy continues as we expand our mono-brand programme in the UK along with mono-brand openings planned in the US, expansions in UK travel retail and continued momentum online.”
Watches of Switzerland Group trades from five online websites and 132 showrooms across the UK and the US, trading under four retail brands, Watches of Switzerland, Mappin & Webb, Goldsmiths and Mayors. Twenty of its showrooms operate through single brand partnerships with luxury watchmakers.
Investing in stores
During the year the retailer has invested in taking its showrooms further upmarket, through an elevation strategy. It has moved three UK showrooms and refurbished six more. It also opened its first showroom at Gatwick. This investment is set to continue in the second half of its year, with a range of openings planned alongside rebranding showrooms to operate in partnership with luxury watch brands including Rolex and Omega.
The retailer says that customer experience is a major point of difference for it as it sells luxury brands such as Rolex.
Watches of Switzerland is investing in machine learning technologies to improve its omnichannel digital marketing. It aims to connect customer engagement across devices and showrooms, from the first touch of online research through to in-store visits and eventual sales. It has used technology from Google to link its stores sales data to digital marketing activity in order to measure showroom and website return on advertising spend.
Image: Screenshot of watches-of-switzerland.co.uk/InternetRetailing Media