Watches of Switzerland increases revenue and profits forecast again

The UK’s biggest seller of Rolex and Omega watches has increased its profits forecast again as the clamour for high-end timepieces shows no sign of abating.

Watches of Switzerland said that, given its recent strong performance, it planned to repay the £3.3m of furlough support money it had received during the original UK-wide lockdown.

However, Brian Duffy, the retailer’s chief executive, said the business had no plans to pay an £11m business rates bill, which has been waived by the government, because its stores were shut for long periods of time.

“Business rates are different,” he said. “Our stores were closed in the springtime and again in November. We don’t think there is the same justification for us to be voluntarily paying rates. We have been overburdened with rates forever as retailers and it is probably going to happen again in the future, so, if we get a holiday during this year, we think is highly appropriate.”

UK sales at Watches of Switzerland, which also owns the Goldsmiths and Mappin & Webb brands, were up nearly 8% in the seven weeks to 13 December. This was despite stores being open less than half the time. A twofold increase in online sales helped make up for the closures, it said. In its US stores sales were up 23%.

With an average spend of about £6,000, Watches of Switzerland, which floated in 2019, operates in a sweet spot of luxury retail. The high-end watch brands control their distribution tightly and the retailer benefits from relationships with the likes of Rolex, Patek Philippe, Tag Heuer and Omega.

The retailer said it now expected full-year revenues of between £900m and £925m, up from a previous forecast of £880m-£910m. It also expects profit margins to be higher than they were last year. Its shares rose 6% to 555p after the forecast upgrade was announced.

Duffy said the business could “not get enough” of the Tudor Black Bay wristwatches, which are advertised by David Beckham, as well as the near-£8,000 Omega linked to the delayed James Bond film No Time to Die.

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