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Watches of Switzerland UK sales impacted by ‘minimal return’ of tourist spending

Watches of Switzerland is “cautiously optimistic” about trading over the next financial year as the jewellery retailer posts modest growth.

Over the 13 weeks to the end of April, the luxury business saw a 4% rise in group revenue to £380m.

Sales in the US grew 6% to £846m, but sales in the UK and Europe dropped 5% to £846m “impacted by macroeconomic conditions in the UK”.

The retailer noted the impact of the tourist tax, highlighting that UK performance continues to be driven by “domestic clientele with minimal return of tourist spending due to the lack of VAT free shopping”.

For the year ahead, Watches of Switzerland expects adjusted EBITDA to rise between just 0.2 – 0.6%.

Chief executive Brian Duffy said: “We are confident that our strategy, exceptional client service and strong brand relationships enables us to continue to drive growth and gain market share. 

“We enter FY25 with cautious optimism. We have a terrific programme of showroom developments on both sides of the Atlantic with the Rolex flagship boutique on Old Bond Street, London; a 3,000 sq. ft Rolex boutique replacing the Mayors multi-brand in Atlanta, Georgia; and our first Rolex showroom in Texas in Plano. 

“The inherent strength of the categories we operate in, coupled with our superior business model and retail expertise continues to set us apart. We remain focused on executing our Long Range Plan and are committed to the targets to more than double sales and Adjusted EBIT by the end of FY28.”

Watches of Switzerland is among several luxury retailers facing pressure in recent months.

This week Burberry profits plunged 36% as it warned wholesale revenue would drop by around 25% in the first half of the year as shoppers hold back on pricey purchases.

Source: Retail Gazette

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