Swiss watches on track to meet expectations amid luxury recovery

Watches of Switzerland revealed it was “on track” to meet expectations for the 2025 financial year amid a recovery in demand for luxury watches and jewellery.

The luxury retailer and the largest seller of Rolex in the UK revealed that “transactions during the first 18 weeks of the financial year have been ‘in line’ with expectations.”

The FTSE 250 firm, which has 221 showrooms across the UK, US and Europe, said it had “seen continued stabilisation of the UK market in both luxury watches and jewellery”.

After the update, Watches of Switzerland shares rose 4.78 percent to 394.4 pence in afternoon trading on Tuesday.

WOSG expects to report 2025 revenues of approximately £1.7 billion next year, reflecting constant currency growth of 9 to 12 percent and profit margin expansion of 0.2 to 0.6 percentage points.

The news is a welcome boost for the Leicestershire-based company, whose shares have fallen by around 40 per cent so far in 2024.

Last year’s geopolitical tensions, a slowing global economy and persistent inflation have contributed to reducing consumer purchasing power.

As a result, luxury brands have been hit by a slowdown in demand as even the wealthy struggle to cope with the high costs.

The effects of this were evident in its June trading update, where the group said sales fell following “significant price increases”.

The company’s UK and European sales fell 5 per cent in the 52 weeks ended April 28 to £846m, despite market share gains, which the company said reflected “macroeconomic conditions in the UK”.

The company reported a 40 per cent drop in its statutory pre-tax profit to £92m over the same period.

Profitability was hit by a “lack of leverage and headwinds from non-interest-bearing borrowing costs,” chief Brian Duffy said, while UK demand continued to lag its pandemic-era strength.