Watches of Switzerland Q3 Sales Tick Higher

FinancialsFeb 10, 2021

Watches of Switzerland Q3 Sales Tick Higher

Though watch sales were strong, jewelry sales sank 20 percent in the third quarter.

A new TAG Heuer store in Roosevelt Field Mall in Garden City, New York is one of the brand’s first franchise boutiques in the U.S. Watches of Switzerland plans to open more mono-brand boutiques in the year ahead.

London—Watches of Switzerland delivered a strong third quarter, driven by growth in the U.S. and a boom in U.K. online sales.

In the third quarter, the company posted £272.6 million ($376.5 million) in total revenue, up 6 percent year-over-year.

Revenue for the first nine months clocked in at £686.8 million ($948.7 million), flat year-over-year.

In the U.S., third-quarter revenue was up 16 percent year-over-year to £86.5 million ($376.5 million). Revenue for the first nine months was up 11 percent to £206.6 million ($285.4 million).

"We delivered another strong performance, driven by continued strong growth in the U.S. and a surge in U.K. online sales, which mitigated the significant headwinds, the extended period of store closures and the continued very low level of international business in the UK,” said CEO Brian Duffy in a press release about the results.

Higher conversion rates at its stores have offset lower traffic in the U.K. and the U.S.

RELATED CONTENT: Watches of Switzerland Opens Jacob & Co. Pop-Up

The luxury watches category climbed double digits in the third-quarter, up 10 percent year-over-year. For the first nine months of 2020, the category was up 3 percent.

Luxury watch sales, which comprise 86 percent of total sales, were especially strong and were not affected by supply disruptions.

The company has set its sights on expansion, opening eight mono-brand stores in the U.S., including two Omega stores, three TAG Heuer stores, and three Breitling stores.

Its Mayors stores in Florida and Georgia and Watches of Switzerland stores in New York performed well, while its Las Vegas stores struggled due to lower domestic tourism.

Domestic sales were strong overall, offsetting a decline in tourist and airport business.

The luxury jewelry category suffered a double digit drop, down 20 percent in the quarter and 18 percent for the first nine months of the year.

Online sales were especially strong, up 121 percent year-over-year, boosted by its “luxury concierge and collect” service, offsetting the impact of store closures.

“Our performance is underpinned by the strengths of our leading multi-channel business model and the uniquely attractive qualities of the luxury watch category, where demand continues to outpace supply,” said Duffy.

Looking to the year ahead, the company is reiterating its full-year guidance despite the U.K.’s national lockdown.

Tax-free shopping for tourists in the U.K. was also stopped as of Jan. 1., a policy the company said it would like to see reviewed.

Its stores in the U.K. are not expected to

open until at least late March 2021, but the company plans to open two mono-brand boutiques in the spring and three more in the summer.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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