Financials

Watches of Switzerland Posts Strong H1 Despite Supply Woes

FinancialsDec 14, 2021

Watches of Switzerland Posts Strong H1 Despite Supply Woes

With Rolex watches in short supply this year, the company turned to other luxury watch brands to bolster sales.

Watches of Switzerland has a new store in the Mall of America after acquiring the location from Ben Bridge as part of its North American expansion. The company’s first-half revenue was up 45 percent year-over-year.
London—Watches of Switzerland delivered a strong first half, raising its full-year guidance as it continues its North American expansion.

In the second quarter ending Oct. 31, the company posted £288.7 million ($381.8 million) in total revenue, up 12 percent year-over-year in constant currency.

Revenue was up 36 percent compared with the second quarter of pre-pandemic fiscal 2020.

For the first half of the year, revenue totaled £586.2 million ($775.1 million), up 45 percent year-over-year and 41 percent compared with pre-pandemic fiscal 2020.

The positive performance was driven by strong demand for luxury watches and jewelry, said the company, with growth led by a significant increase in volumes of brands not hampered by supply constraints.

These “supply-constrained brands” include Rolex, Patek Philippe, and Audemars Piguet.

Due to a recent Rolex shortage, the company changed its in-store stock to being demonstration stock, CEO Brian Duffy said during a November call about the second quarter results.

“We present it as being for exhibition only, and we're doing that simply to keep a reasonable representation of the brand in store overall, not selling that stock, but customers are able to see the product, try it on, and register their interest in buying when availability is there,” he said.

Duffy said this system is “likely to remain for the indefinite future.”

The company has had to rely less on in-demand brands this year to boost its bottom line, Duffy said during a first-half earnings call last week.

The supply-challenged brands contributed less to total revenue this year—59 percent in the first half of this year compared with 61 percent in the same period last year.

“The other luxury watch segment, where we have less constraint on supply, enjoyed very strong sales growth in both the U.K. and the U.S.,” he said. 

These brands contributed 28 percent this year compared with 25 percent last year.

 Related stories will be right here … 

Duffy highlighted Omega, Breitling, Cartier, TAG Heuer, and Tudor as brands who put on strong performances.

The company also couldn’t count on tourist dollars this year as travel remains slow to recover.

Tourist sales made up 34 percent of overall revenue in the first half of 2020. So far this year, tourist sales accounted for 2 percent of overall sales.

In a move to bolster revenue, the company has continued to expand in the U.S. market.

In the region, second-quarter revenue totaled 196.9 million, up 6 percent year-over-year and up 21 percent compared with the second quarter of pre-pandemic fiscal 2020.

For the first-half, U.S. revenue totaled 167.6 million, up 50 percent year-over-year and up 67 percent compared to the same period in fiscal 2020.

The company recently acquired five stores belonging to leading independent watch retailers in the U.S. as it continues its North American expansion.

It scooped up Ben Bridge at Mall of America outside of Minneapolis-St.Paul; Timeless Luxury Watches in Plano, Texas; and three Betteridge stores in Greenwich, Connecticut, and Vail and Aspen, Colorado.

As part of the expansion plan, the Ben Bridge and Timeless locations will be converted into Watches of Switzerland boutiques, while the acquired Betteridge locations will continue to operate under their own name for the “immediate future.”

The acquisitions brought its U.S. network up to 36 stores, including 22 multi-brand and 14 mono-brand boutiques, located in 12 states.

It also invested in its U.K. store network, including refurbishing five stores and adding seven stores, bringing its total to 130 as of Oct. 31.

"I am delighted with our excellent first-half year performance,” said Duffy in a press release about the results.

“Our success in both the U.K. and the U.S. has been a testament to our robust multichannel business model, the enthusiasm and commitment of our people, and the attractive dynamics of our category where demand continues to outpace supply.”

The luxury watches category climbed in the second quarter, up 8 percent year-over-year. For the first half, the category was up 41 percent.

The luxury jewelry category was up 25 percent year-over-year and up 53 percent in the first half.

“Our jewelry business is up 50 percent, so it was a good market for jewelry,” said Duffy.

“Our buying team is doing a fantastic job and selecting the right product and approach to the market, which is a branded approach,” he added, noting the company avoids promotional activity in the category.

Online sales for the first half were strong, up 29 percent year-over-year. Its physical stores were fully opened in the first half.

Due to a strong first-performance overall, the company raised its full-year guidance.

It now expects revenue of £1.15 billion to £1.20 billion, said Chief Financial Officer Anders Romberg, up from its prior guidance of £1.05 billion to £1.10 billion.

The guidance assumes there will be no disruptions to the supply chain or additional COVID-19-related lockdowns.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Recorded WebinarsMay 27, 2022
Watch: The 5 Things I Always Take to a Trade Show

Editor-in-Chief Michelle Graff is joined by three industry veterans to talk about the items they never leave behind and why.

CollectionsMay 27, 2022
92Y Has Selected its 2022 Artist in Residence

German jewelry artist Alexander Blank is the fourth designer to receive the honor.

CollectionsMay 27, 2022
Piece of the Week: Which Movie Inspired This Chopard Masterpiece?

The answer is “Hair,” and the necklace is from Chopard’s 2022 Red Carpet Collection, rolled out at the Cannes Film Festival.

Brought to you by
3 Reasons to Offer Estate Buying at Your Store

Provide your customers with a seamless selling solution by partnering with Windsor Jewelers, Inc.

Supplier BulletinMay 26, 2022
Extraordinary Italian Jewelry at JCK and COUTURE

Sponsored by Italian Trade Agency

Weekly QuizMay 26, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
SourcingMay 26, 2022
Q&A: Deciphering De Beers’ Blockchain Platform

David Prager virtually sat down with Editor-in-Chief Michelle Graff to answer questions about the rollout of Tracr at scale.

AuctionsMay 26, 2022
Bonhams New York Jewels Auction Is a White Glove Sale

Jewelry and objects belonging to Bette Midler, heiress Hélène Irwin Crocker Fagan, and Lady Sylvia Ashley were among the highlights.

Brought to you by
Dive into GIA’s Pearl Expertise

When it comes to knowing the identity and quality of your pearls, count on GIA as your independent pearl experts.

TechnologyMay 26, 2022
State of Retail: The Pros and Cons of 4 Jewelry-Selling Platforms

From “old-school” eBay to new kid on the block 1stDibs, we asked jewelers about their experiences selling jewelry in non-traditional places.

Policies & IssuesMay 26, 2022
Barbara Wheat Named Executive Director of Ethical Metalsmiths

She has nearly 30 years’ experience in the gem and jewelry industry and a background in nonprofit management.

EditorsMay 25, 2022
7 Standout Tiaras in Sotheby’s Platinum Jubilee Exhibition

Senior Editor Brecken Branstrator chooses the pieces she’d most want to see in person.

MajorsMay 25, 2022
Anne Hathaway Is Bulgari’s Newest Ambassador

The actress joins Zendaya and others in a new advertising campaign.

IndependentsMay 25, 2022
The Mexican Shack to Close After 47 Years

Owner Steve Delzio shares his thoughts on retirement after nearly five decades in the jewelry industry.

IndependentsMay 25, 2022
Designer Theo Fennell Has Written a Memoir

“I Fear for This Boy” takes readers through the ups and downs of his business and is available for pre-order now.

IndependentsMay 25, 2022
MVEye, Wedding Report Partner on New Jewelry Research Platform

“Today’s Wedding Jewelry Consumer” shares data about engagement ring market size, lab-grown and natural diamonds, and more.

ColumnistsMay 24, 2022
The PR Adviser: 10 Questions to Contemplate

Columnist Lilian Raji wants to walk you through the customer journey. But first, she’d like you to answer a few questions.

Events & AwardsMay 24, 2022
8 Gold Jewelry Designers Unveil New Platinum Designs

Several Couture brands have partnered with Platinum Guild International ahead of the jewelry trade show.

Lab-GrownMay 24, 2022
Kendra Scott Unveils Lab-Grown Engagement Ring Collection

The jewelry company is moving into bridal just a month after branching out into the watch world.

SourcingMay 24, 2022
State of the Diamond Industry: Where Does Supply Go From Here?

The 2008 economic crisis, COVID-19, and sanctions on Russian goods have set the stage for an interesting decade for natural diamond supply.

Events & AwardsMay 24, 2022
WJA to Host Diversity Keynote at New Las Vegas Breakfast Event

The Generating Community Impact fundraiser on June 11 will feature Karine Bah Tahé of Blue Level Training.

WatchesMay 23, 2022
Steven Kaiser, Watch Industry Veteran and Beloved Mentor, Dies at 68

Kaiser, whose illustrious career spanned decades, died suddenly on Friday.

IndependentsMay 23, 2022
Long’s Jewelers to Open New Location

The family-owned jeweler is relocating its Braintree, Massachusetts, store to a new space.

IndependentsMay 23, 2022
Luxury Goods Veteran Olivier Stip Joins Chicago Jeweler CD Peacock

He will step into the retailer’s newly created role of chief development officer.

GradingMay 23, 2022
Gem-A Launches Digital Entry-Level Gemology Course

GemIntro is meant to give a broad introduction to gems and gemology.

Recorded WebinarsMay 20, 2022
Watch: Responsible Sourcing and the Gold Supply Chain

Three industry experts discuss “recycled” gold vs. mined, their challenges and benefits, and how jewelers can navigate the area.

AuctionsMay 20, 2022
Piece of the Week: ‘Birds in Flight’ by Oscar Heyman

The New York jeweler made this incredible, colorful Art Deco bracelet featuring tropical birds in 1927.

SurveysMay 19, 2022
5 Predictions for Jewelry Retail in the Second Half of 2022

From a slowdown in sales growth to rising costs, Fruchtman Marketing outlines its expectations for the second half of the year.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy