Watches of Switzerland sees sales double after huge boost in demand for luxury timepieces spurred by 'accumulated disposable income'
Watches of Switzerland has recorded a robust three months of sales thanks to substantial demand from domestic customers in Britain and the US.
The luxury retailer saw sales of both watches and jewelry nearly double in the 13 weeks to the start of August compared to the same time in 2020 when it was severely hit by store closures.
Shares in the firm rose by 3.3 per cent to £10.58 on Tuesday as it revealed online sales also continued to grow despite British outlets being open throughout the three-month period, though at a more moderate rate of 15.9 per cent.
Good times: The luxury retailer saw sales of watches climb by 97.1% to more than £250m whilst luxury jewellery purchases grew by 98.9% to £20.1m
Its total first-quarter revenues jumped 101.9 per cent to £297.5million at constant currency levels, but they were also 45.8 per cent higher on a two-year basis.
Sales of luxury watches continued to represent the overwhelming bulk of purchases by consumers, climbing by 97.1 per cent to more than £250million whilst luxury jewellery sales shot up 98.9 per cent to £20.1million.
The FTSE 250 group said the impressive performance strengthened its existing full-year guidance, which revenues expected to be between £1.05billion and £1.1billion, a rise of 16 per cent to 21 per cent on the previous year.
The company's chief executive Brian Duffy told the Press Association that customers have opted to treat themselves, helping sales at the business to soar.
He said: 'In the UK and US there is accumulated disposable income and we are an attractive category in that sense. We call our categories "rational indulgences".
'Buying a beautiful luxury watch, you can feel confident that it's going to preserve value, it's going to last forever, it's a family heirloom.
'So, therefore, in these circumstances, when people have money to spend, our category is high up in their priority list. So, definitely, we've benefited from that.'
Watches of Switzerland CEO Brian Duffy said: 'Buying a beautiful luxury watch, you can feel confident that it's going to preserve value, it's going to last forever, it's a family heirloom'
'There is a willingness for people to trade up and indulge a bit more, maybe buying gold when they were thinking of buying a mix of gold and steel,' he said.
Revenues grew at a fast pace in the group's biggest market, the UK, where it has recently opened two boutique establishments selling just OMEGA and Breitling wares in Edinburgh, as well as a TAG Heuer store in Manchester.
But compared to two years ago, sales have expanded more rapidly in the US, where it said footfall in its Las Vegas and New York has quickly recovered, and its eight new mono-brand boutiques are 'performing strongly.'
It is planning to open more Watches of Switzerland outlets in Cincinnati, Ohio, the New Jersey-based shopping and entertainment centre, American Dream, and in the London district of Battersea.
Mr Duffy still pointed out that the pandemic did affect the company - hitting it for £100million - but said it had suffered less of an impact than other high street businesses even as tourism levels continued to remain severely weak.
He remarked. 'A big part of our business is where we can't get enough product to meet demand - Rolex in particular.
'So, the fact that we weren't selling products in the airports and to tourists meant more clients domestically and we were able to take advantage of that.
'It sounds very clever to have pivoted the business to the domestic market, but to be honest, the demand was there.'
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