Good times: Watches of Switzerland raises revenue guidance

Watches of Switzerland will pay back around £3.3million in public furlough support after raising its full-year revenue forecast due to strong sales online and in the United States.

Britain’s biggest retailer of Rolex, TAG Heuer and Breitling watches has increased its expected sales for the 2021 financial year to between £900million and £925million from its previous guidance of £880million to £910million.

The Leicestershire-based group’s strong trade has continued into the current quarter despite the national lockdown in England forcing the FTSE 250 group to close the majority of its stores for four weeks and lower footfall to shopping centres.

 Watches of Switzerland will pay back around £3.3million in furlough support cash

Domestic e-commerce purchases doubled in the seven weeks to December 13 and helped the value of UK purchases grow by 7.7 per cent, while in the United States, they rose by about triple that amount.

The value of purchases in America grew by 11 per cent on a constancy currency basis and helped the group’s overall operating profits jump 52.1 per cent to £45.6million.

In the half-year period before that time, the group’s overall revenues fell by a modest 2.6 per cent to £414.3million even though online trade shot up by two-thirds, while in the UK, the lack of international tourism caused a 7.4 per cent sales drop.

Watches of Switzerland, who sell Tag Heuer watches (above) among many other saw its UK e-commerce purchases doubled in the seven weeks to December 13

Following the impressive sales figures, the firm has announced it will repay the furlough support it received from the British government ‘subject to no significant disruptions affecting our performance during the remaining months of FY21.’

It comes a day after Wickes owner Travis Perkins vowed to hand back the £50million it accepted in Covid relief money. Some of the country’s largest supermarkets, including Tesco, Lidl, Asda, and Morrisons have also made similar promises.

‘I am pleased we have been able to maintain full employment and salary payment throughout lockdown and disrupted trading,’ chief executive Brian Duffy remarked.

Hublot is one of the brands which Watches of Switzerland sells online and in its stores

‘We received the UK Government’s furlough support while our stores were closed due to Covid-19 restrictions, however, given the very strong performance to date and projected, we are now planning to repay it.’

The company did report a strong performance in the second-quarter though after its outlets – which are concentrated in airports and city centres – could reopen. 

It added another establishment in London’s Broadgate area, along with five mono-brand boutiques each in the UK and US. Five of them were Tag Heuer boutiques, two were Breitling and the other three were Rolex, Omega and Tudor. 

Watches of Switzerland is the UK’s biggest seller of Rolex (above) watches

He described the UK government’s decision to end tax-free shopping from January 1 next year as ‘misjudged’ though, and said the company would ‘continue to support all efforts to have this changed.’

The Government declared earlier this year that it would end the VAT Retail Export Scheme (VAT RES), which allows overseas visitors reclaim the VAT they pay on goods purchased but not consumed in the UK.

Independent retail analyst Nick Bubb said the performance shows ‘the luxury watch market continues to operate on a different planet from the rest of retailing’. 

Shares in Watches of Switzerland Group rose 4.4 per cent by the mid-afternoon to £5.45.

This post first appeared on Dailymail.co.uk