Roberto Coin Acquisition Enhances Watches of Switzerland’s Performance in H1

Watches of Switzerland Group Reports Strong Sales Growth Amid Strategic Acquisitions

In a promising start to the fiscal year, Watches of Switzerland Group has reported a notable increase in sales, driven by robust demand in both the U.S. and U.K. markets, alongside the strategic acquisition of luxury jewelry brand Roberto Coin. For the first half of the fiscal year ending October 27, the retailer achieved total revenue of £785 million (approximately $1 billion), marking a 3 percent increase year-over-year, or 4 percent when adjusted for constant currency rates.

U.S. Market Performance

The U.S. market has emerged as a significant contributor to Watches of Switzerland’s growth, with revenue climbing 8 percent (11 percent at constant currency rates) to reach £355 million ($425.9 million). This impressive performance can be attributed to a strategic increase in showroom stock levels of key brands, enhancing both displays and the overall client experience. CEO Brian Duffy noted that after rebuilding stock levels, U.S. revenue surged by 24 percent in the second quarter, signaling a positive turnaround. Meanwhile, the U.K. market also saw a rebound, with revenue turning positive after a challenging start to the year.

Challenges in the U.K. and Europe

Despite the overall growth, revenue in the U.K. and Europe experienced a slight decline of 1 percent year-over-year, totaling £430 million ($548.6 million). The luxury watch segment faced challenges, with sales dropping 3 percent in the first half (2 percent at constant currency rates). However, Duffy emphasized that modest price increases from brands have positively influenced consumer sentiment, helping to sustain demand for key watch brands. Notably, the certified pre-owned and vintage watch market has also seen a surge in interest, with Rolex Certified Pre-Owned now ranking as the company’s second-largest luxury watch brand.

The Impact of the Roberto Coin Acquisition

A pivotal moment for Watches of Switzerland was its acquisition of the North American arm of Roberto Coin for $130 million in May. This strategic move has positioned the retailer as the exclusive distributor of the brand across the U.S., Canada, Central America, and the Caribbean. Following the acquisition, jewelry sales more than doubled, soaring by 103 percent (104 percent at constant currency rates) in the first half, with Roberto Coin contributing £51 million ($65 million) to the overall revenue. Duffy expressed confidence in the integration process, noting that the newly acquired business has performed strongly and is making a significant contribution to the group’s growth.

Future Growth Strategies

Looking ahead, Watches of Switzerland is exploring new opportunities to expand its footprint in the U.S. market, including the potential establishment of mono-brand boutiques and shop-in-shop concepts with retail partners. The company is also in the process of upgrading its website to enhance the customer experience and drive traffic to its online platforms. While luxury jewelry revenue, excluding Roberto Coin, saw a decline of 6 percent overall, the U.K. market experienced a 4 percent increase, highlighting the potential for growth in branded jewelry, which significantly outperformed non-branded items.

Recent Acquisitions and Market Positioning

In addition to the Roberto Coin acquisition, Watches of Switzerland recently acquired Hodinkee, a prominent editorial platform for watch enthusiasts. The integration of Hodinkee is progressing as expected, with plans to enhance the U.S. website and create links to drive traffic between the two platforms. This strategic move aligns with the company’s vision of strengthening its position in the luxury watch market.

Outlook for the Future

As Watches of Switzerland looks to the remainder of the fiscal year, the retailer has reiterated its guidance of £1.67 billion to £1.73 billion ($2.13 billion to $2.21 billion) in total revenue, anticipating sales growth of 9 to 12 percent at constant currency rates. Duffy expressed optimism about the upcoming holiday trading period, noting a strong start in November. With a solid foundation built on strategic acquisitions and a focus on enhancing customer experience, Watches of Switzerland is well-positioned to navigate the evolving luxury market landscape.

In conclusion, Watches of Switzerland Group’s recent performance underscores the importance of strategic growth initiatives and market adaptability in the luxury retail sector. As the company continues to expand its offerings and enhance its customer engagement, it remains a key player in the competitive world of luxury watches and jewelry.