Watches of Switzerland has welcomed a period of strong trading in its third quarter ended 24 January 2021, with group revenue up by 6.6% to £272.6m despite the ongoing pandemic. This was bolstered by a “robust” e-commerce performance in the UK, which offset continued store closures throughout the period.
UK e-commerce sales soared by 121% against the prior year, with sales strengthened by the group’s newly launched luxury concierge and collect service, which delivered “robust” initial results over the period.
Total UK revenue rose by 1.5% to £186.1m, as domestic sales remained strong and continued to offset lower tourist and airport business. Despite the positive revenue growth, UK stores traded for only 37% of potential trading hours, reflecting eight weeks of national lockdown.
The group said it advanced its leading multi-channel business model in the period, with “significant” further development of its mono-brand network, e-commerce, customer relationship management and clienteling, and digital marketing.
In addition, luxury watch sales continued to drive its performance, and represented 86% of group revenue in the first nine months of FY21, up from 84% the year before.
Across the group, higher conversion also continues to “more than offset” lower traffic across both the UK and US.
Looking ahead, the group said it maintains its guidance for FY21, despite UK market conditions having worsened since announcing its half-year results on 17 December 2020, with the national lockdown introduced on 26 December 2020.
While it has assumed a “continued high level of uncertainty” in the UK where stores are not expected to reopen until late March 2021 at the earliest, no impact is assumed from any lockdown on US retail activities or on production in Switzerland.
CEO Brian Duffy said: “We delivered another strong performance, driven by continued strong growth in the US and a surge in UK 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.
“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. The experience of prior lockdowns in the UK has given our teams the tools to optimise commercial opportunities through online and clienteling, whilst in the US we are driving fantastic conversion levels with continued subdued traffic.”
He added: “Through maintaining consistent investment and adapting with agility to changing conditions, we have shown our strategy is working well, with initial findings suggesting we have gained further market share in luxury watches in the UK over the last year.
“With a strong plan for continued investment and future growth, we are well positioned to further enhance our leading position in the UK and become a leader in the US luxury watch market.”