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Watches of Switzerland looks to multichannel growth following stockmarket debut

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Watches of Switzerland has its eyes set on multichannel growth after a stockmarket flotation that valued the business at about £647m.

The UK retailer, ranked Top350 in IRUK Top500 research, floated on the main market of the London Stock Exchange this week, with shares making their debut at 270p.

The move, made by Watches of Switzerland’s parent company Jewel UK Midco, was intended to raise about £155m, reducing debt and making it easier for existing shareholders to sell their shares – this latter group raised a further £65m through the initial listing. 

The company now expects the UK luxury watch market, in which it claims a 35% share, to continue to grow fast. It says that between 2014 and 2018, the market grew by 18% a year to reach an estimated £1.5bn in 2018. And it says that its multichannel approach to selling will enable it to benefit from that growth.

It points to investment both in-store and online that has allowed it to respond quickly to customer demand. Its online strategy includes custom-built websites with a focus on rich content and high quality images and videos, and online assistance including a concierge service for those buying a watch costing £5,000 or more. 

The retailer also enables shoppers to order online from within its stores, and to collect online orders from stores. “Watches of Switzerland Group is one of only a few luxury watch retailers with a nationwide click and collect capability in the UK and the US,” it said when it first announced its intention to float on the stockmarket. 

Brian Duffy, chief executive of Watches of Switzerland, said, when the IPO was confirmed: “Our transformation is complete, the group is now the UK’s leading luxury watch retailer and has successfully entered the significant but underdeveloped US market. I am very excited for what lies ahead and the opportunity to take our growth strategy to the public markets.”

The luxury watch retailer trades from 125 stores in the UK and online via brands including Watches of Switzerland, Goldsmiths, Mappin & Webb. It also has 21 stores trading under the Mayors brand in the US, where it says it is the largest luxury watch retailer in the south-eastern US, and the largest Rolex retailer in Florida and Georgia. Neither Rolex nor Patek Philippe allow their watches to be sold online but the retailer provides online information about them as part of its marketing strategy. 

In the year to January 27 2019 it turned over £746m, while its earnings before interest, tax and asset write-downs came in at £67.7m. In the 39 weeks to that date, 12.4% of its revenues, excluding Rolex and Patek Philippe brands, came from online sales. 

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