Watches of Switzerland has reported lower than expected sales growth because of rail and postal strikes over Christmas and general worries about the economic environment.
The UK’s largest luxury watch retailer said revenue increased 17 per cent to £407mn in the 13 weeks to January 29 this year, narrowly missing analysts’ consensus expectations of £425mn.
“We did experience macro-market sentiment particularly in the UK as very negative. Over Christmas time it was probably at a low point”, said chief executive Brian Duffy. He added that festive trading was affected by Royal Mail strikes that reduced delivery capacity as well as transport strikes limiting footfall in London.
About one in six businesses told the Office for National Statistics that they were negatively affected by industrial action in December, with almost a third reporting reduced turnover on the previous month.
Watches of Switzerland maintained its guidance for full-year revenues of £1.5 to £1.55bn, but its share price was down 11 per cent by early afternoon trading on Thursday in London.
The group, which also includes UK jewellery chain Goldsmiths and Mayors in the US, said luxury watch sales grew 22 per cent in the period.
It said that waiting lists for some products, such as Rolex watches, had grown, although there were also some customers deferring purchases.
The group also said luxury jewellery sales, roughly a tenth of its revenue for the quarter, fell 2 per cent year on year.
Although growth in the US did not meet analysts’ expectations, Duffy said US sales growth of 22 per cent to £169mn, after currency fluctuations were stripped out, was “very strong”, with new showrooms opening in New York and New Jersey.
Duffy said Florida had been a bright spot of the US watch market, with the state benefiting especially from an influx of “finance folks” from New York.
He said the state contributed roughly half of the company’s sales in the US. “They love the big brands in Florida, in New York they have more niche influences,” he said.
