Luxury Watch Retailer Weathers Lockdowns and Market Changes
- Watches of Switzerland reports full-year revenue increase of 5.9%
- Revenue up by 15.8% before lockdown
- Luxury watches drive overall performance
- Sales impacted by lockdowns in final six weeks of the year
- EBITDA rose by 13.6% to £78.1m
- Operating profit increased by 6.2% to £48.3m
- Group revenue down by 27.6% in first quarter of 2021
- Revenue up by 7.4% in July compared to the previous year
- Strong domestic sales in UK offset lower tourism and airport business
- E-commerce performance boosts growth
- Luxury watch sales account for 86.8% of group revenue
- CEO Brian Duffy confident in company’s position amidst pandemic challenges
Watches of Switzerland, a luxury watch retailer, has reported a full-year revenue increase of 5.9% to £819.3m despite the challenges posed by the pandemic. Before lockdown, the group saw a 15.8% rise in revenue during the 46 weeks to 15 March. Luxury watches drove overall performance, with sales up by 19.3%. However, the final six weeks were impacted by lockdowns across its UK and US operations, causing a 84.9% drop in group revenue. Nonetheless, EBITDA rose by 13.6% to £78.1m, and operating profit increased by 6.2% to £48.3m. In the first quarter of 2021, group revenue was down by 27.6% to £151.6m due to store closures. Post-lockdown, the company returned to growth with a strong July performance, up by 7.4% compared to the previous year, despite a 83% drop in sales in May. Since reopening, low traffic was offset by higher conversion rates and a good supply of key brands, as well as new technology for clienteling initiatives. E-commerce also contributed with a 79.3% increase in sales. Luxury watch sales made up 86.8% of group revenue. In the UK market, strong domestic sales rose by 20.4%, compensating for lower tourism and airport business, which fell by 92.8%. Looking ahead, the company expects domestic demand to remain robust but anticipates limited airport traffic and foreign tourism in the US with gradual improvement throughout the financial year. CEO Brian Duffy expressed confidence in the company’s position amidst uncertain times.
Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about Watches of Switzerland’s financial performance during the pandemic, including revenue growth, store closures, e-commerce performance, and CEO Brian Duffy’s comments on their future plans. It presents data and quotes from the company without any sensationalism or personal perspective.
Noise Level: 3
Noise Justification: The article provides relevant information about Watches of Switzerland’s financial performance during the pandemic and its expectations for the future, with a focus on key metrics such as revenue, EBITDA, and operating profit. It also includes insights from the CEO. However, it lacks in-depth analysis or exploration of long-term trends or consequences of decisions made by the company.
Financial Relevance: Yes
Financial Markets Impacted: Watches of Switzerland’s financial performance impacts the luxury watches market and its stock price
Financial Rating Justification: The article discusses the company’s financial results, revenue growth, and expectations for future performance in the luxury watch market.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
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