The leading Rolex watch retailer in the UK, Watches of Switzerland Group, experienced a significant 28% fall in its stock value following a reduction in its sales and growth outlook, as high-end consumers become increasingly cautious with their spending.
The company’s share price took a hit in early trading after it reported unstable Christmas sales and challenging market conditions, which are anticipated to persist throughout the year.
Watches of Switzerland revised its annual revenue forecast down to between £1.53 billion and £1.55 billion, a decrease from the previously projected range of £1.65 billion to £1.7 billion.
The company also substantially lowered its organic revenue growth expectations, adjusting them to a range of 2% to 3%, down from the earlier 8% to 11%.
Brian Duffy, the Chief Executive, noted that the luxury sector, particularly during the festive season, was exceptionally unpredictable this year, with consumer spending shifting towards other areas such as fashion, beauty, hospitality, and travel.
Over the past year, Watches of Switzerland’s shares have plummeted by approximately 57%, reflecting a broader slowdown in the luxury market, which had previously seen a surge during the pandemic.
The company’s performance has also been affected by concerns over potential competition from Rolex, its main supplier. This follows Rolex’s acquisition of the retailer Bucherer in August.
