Watches of Switzerland unveils five-year plan as ‘strong momentum’ continues

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Watches of Switzerland has created a new strategic plan to keep momentum going as its profits and sales soared during the pandemic.

The luxury specialist recorded a 4,000% increase year on year in statutory profit before tax, up from £1.5m to £63.7m in the 53 weeks to May 2.

Group revenues also soared 13.3% in constant currency to £905m, while its adjusted EBITDA grew 34.9% to £105.4m.

Watches of Switzerland attributed its success to its multichannel business model, allowing it to react to the changing dynamics of the pandemic. Ecommerce sales, for example, were up 120%.

The retailer reported revenue growth in all its markets and has now announced a strategic plan to keep international momentum going in the next five years.

According to the plan, Watches of Switzerland will focus on becoming the market leader in the US while also taking advantage of potential in European countries, which it believes is under-invested.

The retailer plans to enter the European market through acquisitions and mono-brand boutiques as well as using travel retail, ecommerce and new developments.

It also plans for luxury watches to make up 90% of sales, up from 87% in 2020, alongside complementary jewellery and after-sales services.

Chief executive Brian Duffy said: “I am delighted to report a year of strong growth.

“Our performance is testament to the resilience and hard work of our colleagues, good support from our brand partners and our proven model, including our leading online platform and bold, impactful marketing approach.

“The luxury watch market remains predominantly supply-driven, with demand exceeding product availability for key brands and models.

“In spite of the headwinds faced during the year, our teams delivered fantastic results. We generated outstanding growth and strong momentum in the US and are well positioned for future growth.

“In the UK, where our stores were closed for approximately half the year, we further enhanced our market-leading position.

“Trading has remained strong in both the UK and the US since the year-end. Our customer has accumulated disposable wealth and our category is an attractive option. Our growth projections reflect our best estimate of future supply based on our past experience of investment and expansion.

“Looking ahead, we are excited to capitalise on the significant opportunity to accelerate our strategy. The UK luxury watch market continues to grow and we continue to advance our leading position.

“In addition, we plan to achieve growth through further geographical diversification, becoming the clear leader in the US market and establishing a presence in the EU with the targeted rollout of our proven model.”