Watches of Switzerland Q2 revenues rise to £379m

Watches of Switzerland has reported that revenues increased to £379m in Q2 2023, up from £374m for the same period last year, due to robust demand for luxury watches. US revenue reached £165m, up 11% at constant currency. The group reported strong sales due to the opening of new mono-brand boutiques for Bretling, TAG Heuer, and Grand Seiko. UK and Europe revenue hit £214m, in line with prior year, with performance continuing to be driven by domestic clientele across the UK. During the period several high turnover Goldsmiths and Mappin & Webb showrooms were closed for upgrade during the period and were trading out of pop-ups but will reopen before Christmas. In addition, the group acquired 19 luxury watch showrooms from Ernest Jones, comprising 14 multi-brand showrooms and five mono-brand boutiques. First half revenues for the group totalled £761m, dipping slightly from £765m reported last year. Strong momentum continued in the US with revenues of £328m, up from £311m. Meanwhile UK and Europe reported revenues of £433m, falling from £454m reported in H2 FY23. H1 FY24 adjusted EBITDA is expected to be £70m to £72m, decreasing from H1 FY23 of £87m. For FY24 the group expects revenues to be between £1.65bn and £1.70bn, despite not anticipating an improvement in consumer confidence. For the year ahead, the retailer will also continue the refurbishment and expansion of the showroom network, including the continued roll-out of Goldsmiths Luxury showroom format in Birmingham Bullring, Metrocentre Newcastle and at Manchester Trafford Centre, as well as a further roll-out of the Mappin and Webb format in Glasgow, Bluewater and Edinburgh. Brian Duffy, chief executive officer, said: “I am pleased to report an improved Q2 trading performance, notwithstanding the difficult consumer environment. The UK performance was delivered despite the impact of several high turnover Goldsmiths and Mappin and Webb showrooms being closed for upgrade and trading from pop-up locations during the quarter. These will reopen pre-Christmas. The UK business exited the quarter strongly, returning to year-on-year growth in October. “I am delighted to announce that, in October 2023, we agreed to acquire 19 luxury watch showrooms, including five mono-brand boutiques from Ernest Jones in the UK. I would like to welcome our new colleagues in the luxury showrooms we have acquired from Ernest Jones. We believe these are great showrooms and highly complementary to our portfolio. During the balance of the fiscal year, we will be working on systems, merchandising, training and marketing in order to have the full beneficial impact from this acquisition in FY25.”