Luxury demand ‘robust’ despite cost pressures, says Watches of Switzerland

The boss of the UK’s biggest luxury watch retailer said demand had “stayed firm and robust” for expensive timepieces despite the wider cost-of-living crisis.

Watches of Switzerland held steady on its guidance for the rest of the financial year as it saw sales jump for the past six months.

The group reported that revenues had increased by 31% to £765 million over the half-year to October, compared with the same period last year.

It said this was buoyed by strong demand for watches and jewellery, as well as continued growth in its US business.

Brian Duffy, chief executive officer of the retailer, told the PA news agency that pressure on consumers had not yet impacted the firm’s sales growth.

“Consumer demand has remained really robust in all markets,” he said.

“Our consumer group has generally been fairly resilient and still has money to spend so sales of luxury products has been well insulated.

“We are still in a position where supply struggles to keep up with demand and are positive that it will continue.”

Watches of Switzerland said trading in the pre-Christmas period had been “in line” with expectations.

The retailer, which has stores in London, said it had also seen appointments from customers postponed due to this week’s train strikes but that it did not expect this to reduce sales.

Mr Duffy said: “The strike action has been a significant inconvenience.

“Our customers typically arrange appointments to purchase products and some of those are unsurprisingly being delayed because of the strikes.

“But we will still see those sales, even if they are just postponed somewhat.”

AJ Bell investment director Russ Mould said: “Its latest results show a business in perfectly decent health.

“Prices and volumes are up, and management has reiterated 2023 guidance which is becoming a rarity in a world where earnings forecasts are being downgraded across multiple industry sectors.

“The market focus remains short-term however, and investors have given the thumbs-down to the results.

“There’s been a slight dip in margins and a big drop in cash flow.”

Shares in the company were 6.7% lower at 895p.