ZURICH (Reuters) – Britain’s luxury watch retailer Watches of Switzerland (WoS) expects strong growth in its British market in the next five years and has allocated cash for acquisitions in the United States and European Union, its chief executive said.
With most stores reopened after closing during the pandemic, sales of Swiss watches are seeing a strong recovery. The company, which sells Rolex, Cartier and Omega timepieces, has been expanding its store network and boosting online sales.
“We think the UK luxury watch market will increase between 8% and 10% per year over the next five years. We’ll outperform that by a couple of points,” Brian Duffy told Reuters.
Although Britain was unlikely to see a fast recovery in overseas visitors, who no longer benefit from tax-free shopping, he said domestic demand remained strong as the company opened more stores and boosted online sales.
The company, which acquired U.S. jeweller Mayors in 2017, said U.S. revenue was expected to grow 25%-30% a year in the next five years supported by acquisitions and other investment. The United States now accounts for a third of group revenue.
“We’re very bullish on the U.S. We think the market is obviously underinvested and underdeveloped,” Duffy said.
The group plans to spend 300 million to 340 million pounds ($413 million-$468 million) to expand, with up to 200 million pounds of that to be spent on acquisitions in the United States and European Union, a region the company expects to account for 5%-8% of group sales by 2026.
WoS, which confirmed its fiscal 2022 guidance of 16%-21% sales growth, said sales rose 13.3% to 905.1 million pounds in the 53 weeks to May 2. Adjusted earnings before interest tax jumped by 39% to 77.6 million pounds.
($1 = 0.7260 pounds)
(Reporting by Silke Koltrowitz; Editing by Edmund Blair)
