Top Rolex Seller Sees Signs of Stability in UK Watch Market

Watches of Switzerland Group Plc stated it sees indicators of stability within the premium and luxurious watch market within the UK after a post-Covid hunch dented gross sales.

Shares of the highest vendor of Rolex watches in Britain rose as a lot as 9.7 % in London after the corporate stated pressures on demand for costly timepieces suffered this 12 months are beginning to wane.

Gross sales within the UK and Europe fell 5 % in fiscal 2024 as client confidence was hit by shaky financial development, excessive rates of interest and conflicts in Ukraine and the Center East. The posh watch retailer now sees these pressures easing, and reiterated its gross sales forecasts for the present 12 months in a press release on Thursday.

Traders “ought to discover consolation” within the firm’s unchanged forecast, Jefferies analyst James Grzinic stated in a report. “Indicators of stabilisation within the UK market might be an space of focus immediately.”

Adjusted earnings earlier than curiosity, taxes, depreciation and amortisation fell 11 % to £179 million ($226 million) for the 12 months resulted in April as US shops and gross sales of used Rolex watches outperformed. That topped consensus analyst estimates of £175 million.

The corporate’s shares had fallen greater than 40 % this 12 months on considerations it might lose market share after Rolex purchased rival watch retailer Bucherer AG, marking the highest Swiss model’s first vital transfer into promoting its personal merchandise.

Watches of Switzerland stated gross sales of used watches, together with Rolex fashions below the Swiss watchmaking big’s “licensed pre-owned” programme, doubled in its fourth quarter from the prior 12 months and are actually its second-biggest income.

As for brand spanking new watches, the corporate stated Swiss watchmakers are “being conservative” with manufacturing amid slowing demand to keep away from flooding the market with too many timepieces.

This can be a “accountable method to the long-term stability of the luxurious watch market,” the corporate stated.

Watches of Switzerland warned earlier this 12 months that gross sales and revenue can be weaker than anticipated because it wasn’t allotted as many gold and different precious-metal watches from Rolex and as UK customers turned extra cautious.

The corporate on Thursday additionally reiterated its long-term goal of greater than doubling gross sales and earnings earlier than curiosity and taxes by 2028.

By Andy Hoffman

Study extra:

Watches of Switzerland Dives as Watch Shoppers Retreat

Shares of Watches of Switzerland Group Plc slumped practically 30 % after the highest vendor of Rolex watches within the UK minimize its gross sales and development forecasts, blaming unstable demand and a shift in luxurious spending habits.