Luxury market not ‘totally immune’ to retail woes, Watches of Switzerland says
The boss of the Rolex seller said its main consumer demographic has been less affected by rising inflation.
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Your support makes all the difference.Watches of Switzerland has said the luxury market is not “totally immune” to the cost-of-living squeeze affecting the wider retail sector, as it reported a dip in sales in its latest quarter.
The multinational Rolex seller said its main consumer demographic has been generally less affected by rising inflation, with demand for luxury watches continuing to exceed supply.
Brian Duffy, the retailer’s chief executive, told the PA news agency that its watches, which are often bought as investment pieces, are viewed as “aspirational” and a “rational indulgence” by many buyers.
But he said the retail sector is being hit by a number of pressures, including inflation, labour costs and the knock-on impact of rising interest rates.
I think it is a tough period for retail. I hope there are better days ahead for the sector because we do love to shop in this country
It comes after homeware retailer Wilko announced it had collapsed into administration on Thursday, which Mr Duffy said was “very sad”, adding: “I can understand the pressures they would have been facing.”
“Luxury is not totally immune to ongoing matters of course but it is a different situation and appeals to a different demographic,” Mr Duffy told PA.
“I think it is a tough period for retail. I hope there are better days ahead for the sector because we do love to shop in this country.
“But there are some fundamentals where the sector really does need some help.”
Watches of Switzerland saw revenues dip by 8% in the UK and Europe in the latest three months, compared to the same period last year.
Global luxury watch sales were down 2% and luxury jewellery sales fell by 15%.
Jewellery sales are more affected by waning consumer sentiment and increased competition in the market, Mr Duffy said.
He added that a disproportionate impact on engagement ring sales could be a knock-on impact of Covid, where lockdowns prevented people meeting and going on dates, according to studies in the US.
But people still want to visit showrooms to shop around and try on watches and jewellery, he said, as the retailer opened new showrooms in the UK and US and continued refurbishing major stores.
“People are coming into a really nice environment, socialising, taking their time and having something to eat, and a nice proportion of them are buying beautiful watches.”
Shares in Watches of Switzerland were up by 3% on Thursday.