While global stock markets are down, way down, one wonders how well the luxury watch market is holding up. I have tried to get a sense of where things are and, more importantly , where they are heading by talking to a number of retailers based in Europe. Everyone seems to agree that uncertainty is the name of the game, and that luxury watches tend to not follow general market sentiment. Luxury watch sales numbers remain strong, yet the question is whether these levels can indeed be maintained. Fact remains that we find ourselves at the start of a global recession.
Data related to the luxury watch industry is usually murky at best. Your average retailer does not share sales insights, and the swiss export data only tells us so much. There is plenty of hearsay for everyone. So where can we find some facts? Fortunately, some of the bigger players in the market are publicly listed companies that have to disclose a certain amount of information…
Watches of Switzerland (WOSG:LSE) recently published some rather astonishing data. The Watches of Switzerland Group is a specialist of luxury watches with a complementary luxury jewellery offering, and has long-standing partnerships with brands including Rolex, Patek Philippe, Audemars Piguet, Cartier, OMEGA, TAG Heuer, Breitling and Tudor. The Group has a market leading position in the UK luxury watch market and has established a significant presence in the US market, where, according to its annual report, it aims to become a leader.
Watches of Switzerland recorded a 40% increase in sales for the year to May and nearly doubled its pre-tax profit. They further predict an additional increase of another 20% this year as demand continues to outpace the limited supply. Those are some serious numbers.
That said, despite these very solid numbers and their rosy outlook, the market does not seem to share their optimism. Shares in the group have taken a serious haircut the past months, with a global recession just around the corner.
So what’s next? Time will tell… For additional insights, check out this report on the Financial Times.