Watches of Switzerland Group Plc, the top seller of Rolex watches in the UK, has set its sights on an ambitious goal to more than double its sales and profits by 2028. Despite fears of a luxury slowdown that have caused the company's market value to plunge over 40% this year, Watches of Switzerland remains optimistic, stating that it is "stronger than ever." Although its sales of £379 million ($467 million) in the fiscal second quarter fell short of analyst expectations, the company's positive long-term projection has fueled a surge in its stock price, rising over 13% in early trading in London.
The company, which relies heavily on Rolex for half of its sales, aims to surpass £3 billion in revenue while accelerating plans for new showrooms and increasing merger and acquisition activity. In addition to new showrooms, Watches of Switzerland is looking to tap into the luxury branded jewelry market, leveraging its expertise in selling high-end watches. The company sees growth potential in this sector and believes it can successfully expand its presence.
Watches of Switzerland also plans to capitalize on the sales of certified pre-owned Rolex watches, which it anticipates will become a significant revenue driver in the future. By 2028, the company expects that pre-owned sales will account for 20% of new Rolex sales in the US and 10% in the UK. CEO Brian Duffy expressed confidence in the potential of the pre-owned market, highlighting the significant opportunities it presents.
The company remains on track to achieve its targets for the current year, with second quarter sales in the US growing by 11% at constant currencies, while UK sales remained flat due to store renovations. Watches of Switzerland plans to reopen its upgraded UK showrooms before Christmas, as well as its US Rolex boutique in Orlando, Florida. These developments are expected to help the company meet its annual sales targets.
The optimistic outlook and strong sales growth in the US have reassured investors. Jefferies analyst James Grzinic noted in a client note that the company's confidence in securing an increasing share of volumes from key suppliers, including Rolex, is further supported by its long-term plans. This confirmation of the company's positive trajectory has generated renewed hope and enthusiasm among investors.
Despite the challenges faced by the luxury market, Watches of Switzerland is determined to continue its upward trajectory. With a focus on expanding showrooms, entering new markets, and capitalizing on the pre-owned market, the company is confident in its ability to achieve its ambitious goals within the next decade. As it strengthens its position as the leading retailer of Rolex watches in the UK, Watches of Switzerland remains committed to delivering exceptional luxury products and experiences to its customers.