Rolex seller Watches of Switzerland says luxury watch demand outpacing supply

The retailer’s group revenues swelled by nearly a fifth to £1.5 billion in the year to the end of April.

Rolex seller Watches of Switzerland has reported a surge in annual sales as demand for luxury watches outpaced supply (Yui Mok/PA) (PA Archive)

Rolex seller Watches of Switzerland has reported a surge in annual sales as demand for luxury watches outpaced supply, shrugging off a wider cost-of-living downturn.

Its share price jumped by more than a 10th after revealing its group revenues grew by nearly a fifth to £1.5 billion in the year to the end of April.

The retailer said the sales boost was driven by a combination of increased average selling prices and volume, meaning more items were sold at a higher price.

Luxury watch sales grew by 28% year-on-year, and luxury jewellery sales jumped by a 10th.

“Consumer appetite for products remained strong and, in many instances, well above the levels that the group is able to supply”, the firm said.

Luxury watch demand remains strong and continues to outpace supply, with our client registration lists extending and average selling prices growing

Brian Duffy, Watches of Switzerland's chief executive

The group’s statutory pre-tax profit jumped by nearly a quarter, from £126 million to £155 million in the latest year.

The “record” year for revenues and profitability came despite a more challenging trading environment during the second half of the financial year, Watches of Switzerland said.

It was also driven by a surge in revenues in the US of more than a third.

In the UK, tourist sales remain “very low” and demand was driven by domestic customers, but more shoppers returned to airports during the year, it revealed.

The retailer, which also sells brands including Cartier, Tudor, and Patek Philippe, has been shaking up its chain of shops around the country.

It opened five showrooms at Battersea Power Station in London and 10 single-brand boutiques across the UK, but closed six showrooms elsewhere.

It is also due to open a new showroom in St Anne’s in Manchester and a flagship store Old Bond Street in London next year.

The firm expects to report slower revenue growth of between 8% and 11% next year.

Brian Duffy, Watches of Switzerland’s chief executive, said: “Luxury watch demand remains strong and continues to outpace supply, with our client registration lists extending and average selling prices growing.”

Danni Hewson, the head of financial analysis at AJ Bell, said: “The fact it has achieved stellar growth in a cost-of-living crisis shows that not everyone is short of money.

“The market has previously worried that the luxury goods market might not be as resilient as previously thought.

“Despite the uncertain economic backdrop, the fact Watches of Switzerland hasn’t downgraded its guidance has been taken as a massive positive in the eyes of investors.”