The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Luxury watch retailer Watches of Switzerland expects a potentially more challenging trading environment in the second half of its current financial year, it said on Tuesday, as tough economic conditions impact spending patterns.
“We’re not really worried because so much of our business is driven by the supply,” chief executive Brian Duffy told Reuters in an interview. “But we can’t ignore that the world has a concern about economy, cost of living, inflation. It will impact consumer sentiment.”
“We’re pretty confident, but it’s appropriate that we introduce an element of caution,” Duffy added.
The Rolex retailer, which has long waiting lists for timepieces in short supply, confirmed it expects revenue in a range between £1.45 billion ($1.8 billion) and £1.50 billion for its financial year through April 2023.
ADVERTISEMENT
In the 13 weeks through July 31, group revenue rose 25 percent at constant currency rates to £391 million, the company, which does about two thirds of its sales in Britain and one third in the United States, said in a trading update.
Duffy said the group was not facing significant inflation on its cost basis - mainly rents for stores and salaries - but brands had pushed through additional price increases this summer, on top of the 4-5 percent announced earlier this year, taking the annualised rate of increase to around 7 percent.
He said the group’s expansion to continental Europe was going well. It recently opened a boutique in Stockholm and has more openings in Scandinavian countries planned for the coming months.
Shares in Watches of Switzerland were up 3.3 percent at 913.67 francs by 09:01 GMT, after rising as high as 946.5 francs, their highest in more than two months.
By Silke Koltrowitz; Editor: David Holmes
Learn more:
Watches of Switzerland to Expand in EU Through M&A, Boutiques
Watches of Switzerland, the UK’s largest watch retailer, said the region also offers growth potential in travel retail and e-commerce as it unveiled a five-year plan for the period through fiscal 2026.
Antitrust enforcers said Tapestry’s acquisition of Capri would raise prices on handbags and accessories in the affordable luxury sector, harming consumers.
As a push to maximise sales of its popular Samba model starts to weigh on its desirability, the German sportswear giant is betting on other retro sneaker styles to tap surging demand for the 1980s ‘Terrace’ look. But fashion cycles come and go, cautions Andrea Felsted.
The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.
Nordstrom, Tod’s and L’Occitane are all pushing for privatisation. Ultimately, their fate will not be determined by whether they are under the scrutiny of public investors.