Watches of Switzerland Group Plc’s shares fell 12% in London after reporting that first quarter sales will decline in a sign of less buoyant times for luxury watch retailers.
The top seller of Rolex timepieces in the UK said Wednesday that the challenging environment of the last six months is continuing into the current fiscal year. It blamed the timing of product deliveries from brands as part of the reason for the expected sales decline.
The statement underscores a cooling of the red-hot luxury watch market which saw unprecedented demand for brands including Rolex, Patek Philippe and Audemars Piguet during the pandemic.
Watches of Switzerland is the largest luxury watch dealer in the UK and has 193 showrooms and boutiques worldwide. It has been expanding rapidly in the US, the biggest market for luxury watches.
The company said sales rose 19% on a constant currency basis last year to £1.5 billion ($1.9 billion). It still expects sales in the current fiscal year to rise to between £1.65 billion and £1.7 billion, a gain of 8% to 11% at constant currencies and in line with analyst consensus forecasts.
The company plans to open an Audemars Piguet boutique in Manchester next year as well as a boutique selling Rolex-sister brand Tudor on London’s Old Bond street.
“Although there may be a slight decline in sales during the first quarter, it is expected that they will normalise in the second quarter,” said Eleonora Dani, an analyst at Shore Capital Markets. “Overall, the group is strongly positioned to sustain its growth trajectory.”
(Updates with shares and analyst from first paragraph)
