4th Feb 2021 09:18
(Alliance News) - Watches of Switzerland Group PLC on Thursday posted a third-quarter sales hike, despite the Rolex and TAG Heuer seller being faced with closures of its UK store estate due to Covid-19 curbs.
Revenue in the 13 weeks ended January 24 climbed 5.7% year-on-year to GBP272.6 million. Third quarter trading "remained strong despite extended period of UK store closures", the watch retailer said.
In the UK alone, third-quarter revenue rose 1.5% annually to GBP186.1 million. Domestic sales were strong, it said, meaning Watches of Switzerland saw less of a blow from lower tourist numbers. For luxury goods companies, travel retail such as duty free shops in airports is a key revenue stream.
Watches of Switzerland said its UK unit got a boost from e-commerce sales, which more than doubled in the third quarter.
The company added that it does not expect stores in the UK to reopen until late March "at the earliest".
In the US, meanwhile, quarterly sales rose 16% on the year prior to GBP86.5 million.
For the nine-month period, group sales are down 4.1% at GBP480.2 million, hit by an 18% fall in jewellery sales and despite a 3.1% climb in luxury watches.
Watches of Switzerland affirmed its annual guidance, saying this was despite the England entering a third national lockdown in January.
"We delivered another strong performance, driven by continued strong growth in the US and a surge in UK online sales, which mitigated the significant headwinds, the extended period of store closures and the continued very low level of international business in the UK," Chief Executive Officer Brian Duffy said.
He added with reference to Brexit: "Tax-free shopping for tourists in the UK was removed from 1 January 2021. We continue to support all efforts to have the UK government review and change this policy."
Burberry Group PLC in January warned the UK will lose its attractiveness as a luxury shopping destination following the end of the VAT retail export scheme. The policy allowed non-EU tourists to get VAT refunds.
Alongside Rolex and TAG Heuer, Watches of Switzerland sells other luxury brands such as Cartier, Omega and Breitling. It joined the London Stock Exchange in June 2019.
Shares in the company were 1.1% lower at 635.00 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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