Watches of Switzerland shares soared on Thursday after the company reported record revenue growth, driven by affluent American consumers snapping up luxury timepieces. The UK's leading luxury watch retailer announced a 13 percent rise in revenue to £1.8 billion for the year ending May, with its US market alone posting a 24 percent increase to £1.2 billion.
Stock Market Reaction
Shares in the FTSE 250 company leapt 13 percent to 600 pence when markets opened, putting the stock up 28 percent for the year to date. The retailer had faced headwinds from Trump's unpredictable tariff policy over the past 18 months but has successfully capitalised on booming demand across the Atlantic, which it describes as the world's largest and fastest-growing luxury watch market.
US Market Performance
Watches of Switzerland posted 25 percent growth in its US retail market, while revenue at Roberto Coin, the Italian luxury jeweller it owns, surged by 22 percent. The US emerged as the firm's largest market, with revenue climbing to £927 million, while UK revenue grew by five percent to £901 million.
UK Resilience
The Leicestershire-based retailer said it had succeeded in strengthening its domestic performance despite consumer confidence falling to a two-year low. Chief executive Brian Duffy celebrated "a major milestone in the world's largest and fastest growing luxury watch market, achieved in just over eight years from entering the US." He added: "In the UK, performance has improved despite the challenging macroeconomic backdrop, with resilient demand for luxury watches and jewellery."
Industry Context
The toll being inflicted on some luxury giants by the decline in tourism after the Iran conflict was laid bare last month, when the owners of brands such as Gucci, Louis Vuitton and Birkin saw their revenues dented. However, Watches of Switzerland insisted it will not be pulled down by the conflict, noting it has minimal exposure to tourist consumers and to the Middle East market.
Recent Acquisition
The company recently snapped up Texas-based luxury jeweller Deutsch & Deutsch and reported strong performance across its four US locations. The outlets, which predominantly deal in Rolex watches, have delivered £16 million in revenue since the acquisition, while the transaction pushed Watches of Switzerland's net debt up to £57 million.
Company History
The business was established in 1924, when Maurice Lane opened its first office in Ludgate Hill, London.
