Watches of Switzerland recorded strong revenue growth of 31% on a reported basis in the 13 weeks to 31st July as the reopening of showrooms absorbed pent up demand for luxury watches.
Watches of Switzerland revenue jumped to £391 million in the period versus £297 million in the same period a year prior.
Luxury watch sales made up 87% of their sales a rose 32% to £342 million.
Analysts underscored the benefits of luxury businesses during economic downturns and their customers who remain largely unperturbed by the the cost of living crisis.
“The rich are still spending money despite the rising cost of living, judging by Watches of Switzerland’s latest update,” said AJ Bell financial analyst Danni Hewson.
“Rising energy and food prices matter to lower income individuals because the extra costs are, in many cases, absorbing all the money previously left over on pay day. Yet for affluent people, inflation won’t massively change their lifestyle and so luxury goods continue to sell well.”
“Watches of Switzerland’s US sales have doubled year-on-year in its most recent quarter, suggesting that inflationary pressures are being shrugged off by its clientele.”
“The company seems very upbeat, rolling out more showrooms or upgrading existing ones, and it is making good progress with its expansion into Continental Europe.”
The Watches of Switzerland CEO pointed to momentum across the business and highlighted the benefits of investing in the experiences of visiting their stores.
“The first quarter continued with strong momentum throughout, and we carry this positive momentum into the second quarter. Despite the well-publicised concerns about the macro-environment, demand for our products remains robust with client registration of interest lists continuing to extend,” said Brian Duffy, Chief Executive Officer, Watches of Switzerland.
“The luxury watch market is dynamic with exciting developments on new products and marketing across a broad range of brands.”
“Within a large, diffuse and growing market, we are benefitting from our distinctive business model – namely our investment in leading store design, the strength of our brand partnerships, our international scale, our bold marketing campaigns, our advanced systems technology, and our dedication to client experience.”
