Watches of Switzerland, a renowned luxury timepiece retailer, encountered a second quarter as its jewelry sales experienced a significant decline, while watch challenging sales remained stagnant. The company’s CEO, Brian Duffy, attributed the slump to a difficult consumer environment. Additionally, several Mappin & Webb showrooms in the UK were temporarily closed for renovation, though they are scheduled to reopen before the holiday season.
Amidst the overall decline in jewelry sales, there was a silver lining for Watches of Switzerland—the pre-owned watch segment. Sales of pre-owned watches surged by 80 percent year-over-year in the second quarter. The company’s Rolex Certified Pre -Owned program, launched in the United States in July and in the UK in September, garnered a positive response from customers.
Watches of Switzerland reported total revenue of £379 million ($466 million) for the second quarter, a 1 percent year-over-year increase in actual rates (5 percent at constant currency rates). In the US market, the company saw a 4 percent growth in revenue (11 percent at constant currency rates), totaling £165 million ($203 million) for Q2.
For the first half of the year, Watches of Switzerland recorded a flat total revenue of £761 million ($936 million) year-over-year (2 percent growth at constant currency rates). E-commerce sales experienced a slight dip of 4 percent , attributed to tough comparables and the overall decline in jewelry sales.
In the US market, first-half revenue reached £328 million ($403 million), a 5 percent year-over-year increase (11 percent at constant currency rates). The company expressed satisfaction with the strong momentum in the US.
However, the luxury jewelry category faced considerable challenges, with revenue declining by 18 percent in the quarter (16 percent at constant currency rates) and 17 percent in the first half of the year (15 percent at constant currency rates). The company attributed these figures to market trends impacted by consumer sentiment and a shift towards full-price sales in the US.
Looking at watches, the luxury watch category experienced a 3 percent year-over-year increase in quarterly sales (6 percent at constant currency rates), while first-half sales remained flat (3 percent growth at constant currency rates). Watches of Switzerland noted the persistent strong demand for luxury watches, exceeding supply, and an increase in average selling prices.
In contrast, the “services/other” segment demonstrated solid growth, with an 8 percent increase in sales for the quarter (9 percent at constant currency rates) and a 6 percent increase in the first half (7 percent at constant currency rates).
As part of its expansion plans, Watches of Switzerland announced the acquisition of 19 luxury watch showrooms from Ernest Jones, a UK-based brand owned by Signet Jewelers. The acquisition includes 14 multi-brand showrooms and five mono-brand boutiques. With this addition , Watches of Switzerland aims to revamp and expand its store network. The financial details of the deal were not disclosed.
Despite the challenges faced, Watches of Switzerland maintained its sales and profit guidance for the fiscal year, anticipating sales of £1.65 billion to £1.7 billion ($2.03 billion to $2.09 billion), reflecting a growth rate of 8 to 11 percent at constant currency rates .
