Luxury market not ‘totally immune’ to retail woes, Watches of Switzerland says
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atches of Switzerland has mentioned the posh market just isn’t “totally immune” to the cost-of-living squeeze affecting the broader retail sector, because it reported a dip in gross sales in its newest quarter.
The multinational Rolex vendor mentioned its predominant client demographic has been typically much less affected by rising inflation, with demand for luxurious watches persevering with to exceed provide.
Brian Duffy, the retailer’s chief govt, informed the PA news company that its watches, which are sometimes purchased as funding items, are seen as “aspirational” and a “rational indulgence” by many patrons.
But he mentioned the retail sector is being hit by a lot of pressures, together with inflation, labour prices and the knock-on influence of rising rates of interest.
I feel it’s a powerful interval for retail. I hope there are higher days forward for the sector as a result of we do love to buy on this nation
It comes after homeware retailer Wilko introduced it had collapsed into administration on Thursday, which Mr Duffy mentioned was “very sad”, including: “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 informed 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 noticed revenues dip by 8% within the UK and Europe within the newest three months, in comparison with the identical interval final 12 months.
Global luxurious watch gross sales have been down 2% and luxurious jewelry gross sales fell by 15%.
Jewellery gross sales are extra affected by waning client sentiment and elevated competitors available in the market, Mr Duffy mentioned.
He added {that a} disproportionate influence on engagement ring gross sales could possibly be a knock-on influence of Covid, the place lockdowns prevented folks assembly and happening dates, based on research within the US.
But folks nonetheless need to go to showrooms to buy round and check out on watches and jewelry, he mentioned, because the retailer opened new showrooms within the UK and US and continued refurbishing main shops.
“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 have been up by 3% on Thursday.