Watches of Switzerland puts faith in online as lockdowns hammer store sales

Luxury retailer Watches of Switzerland has said it is set to focus heavily on online sales after global lockdowns ease as it braces for store customer numbers to be impacted for some time even after restrictions are lifted.

The group – Britain’s biggest retailer of Rolex, Cartier, Omega, TAG Heuer and Breitling watches – said UK sales plunged 30.1% in the 13 weeks to April 26.

Its US arm saw sales drop 16.9% with currency movements stripped out over the quarter, which left overall group revenues tumbling 26.4%, with the final six weeks “significantly” impacted as lockdowns were put in place.

Watches of Switzerland had been on track to deliver double-digit sales for the full-year to April 26 before the pandemic, but revealed closures of all its stores in the UK and US due to lockdowns had left annual sales growth at 5.9%.

The group now expects underlying earnings for the year of between £75 million and £78 million – down from £78 million the previous year.

It also warned that trading conditions will remain tough after the lockdown is lifted as it faces a lengthy period of lower customer footfall, especially in its airport outlets.

But Watches of Switzerland said the closure of stores had seen online sales take off, soaring 82.8% in April.

It added some brands to its website that had previously only been available in stores, which helped boost online sales further.

Brian Duffy, chief executive of Watches of Switzerland, said: “Prior to the Covid-19 pandemic, the group had been on track to deliver double-digit sales growth, reflecting our strong brand partnerships, favourable market conditions and accelerating momentum in the US.”

It is already reopening stores in Florida and Georgia in the US and said the experience of staff and customers so far “had been positive”.

But with air travel expected to remain severely restricted for some time and many consumers still set to shun shops after lockdowns, the group said trading will remain under pressure.

“As we look ahead to a post-lockdown environment, we are anticipating a prolonged period of lower traffic, particularly in airports, with ecommerce… continuing to gain importance,” said Mr Duffy.