‘Tourist Tax‘ taking heavy toll on airport sales in UK for Watches of Switzerland
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nother sign of the harm caused by the “tourist tax” emerged today, with Watches of Switzerland’s sales at UK airports nonetheless lower than half of pre-pandemic ranges at the same time as passenger visitors returns to regular.
CEO Brian Duffy instructed the Standard that gross sales at showrooms in Heathrow and Gatwick had been nonetheless solely “40% to 50% of what it was”, and added that the removing of VAT-free procuring had an particularly huge influence on its airport enterprise. He added that a few of the influence was additionally because of the group “pulling back” on the variety of watches from Rolex, at all times among the many most in-demand manufacturers, it shares on the airport showrooms due to provide modifications.
But he added: “Demand is still strong when you consider that people are paying full price.”
For the three months to July 30, UK and Europe income was down 8%, however Duffy stated this was largely due to fluctuations in provide.
Because many merchandise have years-long ready lists, the reserving of gross sales usually rely upon when the watches are delivered.
Watches of Switzerland, which sells high-end manufacturers equivalent to TAGHeuer, IWC and Breitling, had obtained a wealth of in-demand timepieces within the earlier quarter, which boosted gross sales for that interval however then meant that fewer had been delivered this quarter.
Duffy stated provide at all times works itself out over the course of a yr, however quarterly fluctuations like this aren’t unusual.
“For reasons we’ll never fully understand, Q4 of last year supply was particularly good,” he stated. “So sales were very good but we new that Q1 of this year would offset that.”
Group income slipped by 1% to £382 million, with robust buying and selling within the US cancelling out many of the European decline.
Duffy added: “Looking ahead, we expect to return to more normalised growth rates in the balance of the financial year.
“Our full year guidance for another year of strong growth remains unchanged, underpinned by our supply visibility, client Registration of Interest lists and strong pipeline of showroom openings, refurbishment and investment, as luxury watch demand continues to outstrip supply. We look forward to presenting our Long Range Plan update in the Autumn, which will outline our growth ambitions to FY28.”
The enterprise additionally launched a “certified pre-owned” channel for promoting used Rolex watches in the course of the quarter, and expects to roll this out within the UK in September.