E-commerce boom helps luxury watch retailer navigate pandemic challenges.

  • Watches of Switzerland reported a 6.6% increase in group revenue to £272.6m in Q3 2021.
  • UK e-commerce sales surged by 121% year-on-year, compensating for store closures.
  • Total UK revenue rose by 1.5% to £186.1m, driven by strong domestic sales.
  • Luxury watch sales accounted for 86% of group revenue in the first nine months of FY21.
  • The company maintains its FY21 guidance despite worsening UK market conditions.

Watches of Switzerland has reported a strong performance in its third quarter ending January 24, 2021, with group revenue climbing 6.6% to £272.6 million, despite the ongoing challenges posed by the pandemic. A significant factor in this growth was the impressive 121% increase in UK e-commerce sales compared to the previous year, which helped offset the impact of continued store closures. The company’s total UK revenue also saw a modest rise of 1.5%, reaching £186.1 million, as domestic sales remained robust, compensating for declines in tourist and airport business. nnDuring this period, UK stores operated at only 37% of their potential trading hours due to an eight-week national lockdown. Nevertheless, the company advanced its multi-channel business model, enhancing its mono-brand network, e-commerce capabilities, customer relationship management, and digital marketing strategies. Luxury watch sales were a key driver of performance, making up 86% of group revenue in the first nine months of FY21, up from 84% the previous year. nnDespite lower foot traffic in both the UK and US, higher conversion rates have helped to mitigate the impact. Looking forward, the company remains optimistic, maintaining its guidance for FY21, even as UK market conditions have deteriorated since its last update in December 2020. CEO Brian Duffy emphasized the strength of their multi-channel approach and the luxury watch market’s demand, which continues to exceed supply. He noted that the experience gained from previous lockdowns has equipped the team to optimize online and clienteling opportunities effectively. With a strong investment plan in place, Watches of Switzerland is well-positioned for future growth and aims to solidify its leadership in both the UK and US luxury watch markets.

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about Watches of Switzerland’s trading performance during the third quarter, including revenue growth, e-commerce success, and the company’s outlook for future growth. It also includes quotes from CEO Brian Duffy that support the claims made in the article.
Noise Level: 3
Noise Justification: The article provides relevant information about Watches of Switzerland’s strong trading performance during the pandemic, focusing on e-commerce growth and the company’s multi-channel business model. It also includes insights from the CEO about their strategy and market positioning. However, it lacks a deeper analysis or exploration of long-term trends or consequences of decisions.
Financial Relevance: Yes
Financial Markets Impacted: UK retail sector, luxury watch industry
Financial Rating Justification: The article discusses the financial performance of Watches of Switzerland, a luxury watch retailer, and its ability to adapt to the pandemic situation by increasing e-commerce sales. This impacts the UK retail sector and the luxury watch industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, but the company experienced some challenges due to the ongoing pandemic and national lockdowns.

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