Latest news with #BrianDuffy
Hindustan Times
01-08-2025
- Business
- Hindustan Times
Buying a Swiss Watch in America Is About to Get a Lot More Expensive
America is still an emerging market when it comes to luxury watches. Now, tariffs could upset a rare bright spot for Swiss watch companies. U.S. watch collectors are continuing to spend even as other nationalities pull back. Swatch, which owns brands such as Omega and Longines, said sales in America rose by 'double digits' in the first half of the year. Sales of Richemont's specialist watches, including Vacheron Constantin and IWC Schaffhausen, have increased more than 10% in the Americas region for three consecutive quarters. U.S. imports of Swiss watches have been subject to a 10% baseline tariff since April. But in a new executive order late Thursday, President Trump raised that rate to 39%, even higher than the 31% levy initially threatened in April. Chart 1 The rate could still be negotiated down or questioned by the courts. Implementation of the new tariffs was also delayed until August 7. But the trade war was already having an indirect impact on watch brands. The value of the Swiss franc has appreciated by 11% against the dollar this year as investors park money in safe havens. They have also piled into gold, which is up more than 25%. This creates a triple whammy for American watch collectors. Today they pay 14% more for a yellow gold Rolex Daytona than they did in 2024. Watch brands had to raise prices on many models in the second quarter to prevent tariffs, costlier gold and currency fluctuations from eating into profit margins. The price increases could dent demand in the industry's hottest market. Watch exports to America have grown 14% annually since 2019, nearly three times faster than the global average. Booming stocks and cryptocurrencies are part of the story. But there is also untapped potential in the U.S. According to Brian Duffy, chief executive officer of luxury retailer Watches of Switzerland, investment in U.S. watch retail infrastructure was neglected after the 2008-09 global financial crisis. Twenty years ago, Americans spent as much as the British on luxury watches per head. By 2016, this had fallen to 40% of the U.K.'s per capita spend, he says. The gap is closing again as watch brands upgrade their retail networks and offer better service. Adding to the appeal of the U.S. market is that American watch collectors are about a decade younger than average. And there is a fanatical online community where watch fans parse complications and hunt down discontinued models. An unusually high share of U.S. sales come from serious watch connoisseurs: 45% of Watches of Switzerland's U.S. sales, compared with only a quarter in the U.K. Tariffs are only the latest challenge in a difficult decade for the Swiss watch industry. The value of Switzerland's watch exports has increased a fifth since 2015. But look under the hood and the number of units exported has collapsed by 45%. Swiss brands have lost market share since the launch of the Apple Watch a decade ago. The most pain has been felt in models that cost less than $625, where volumes have fallen nearly 60%, based on data from the Federation of the Swiss Watch Industry. Sales of expensive models have held up much better, especially watches made by privately owned brands Rolex, Patek Philippe and Audemars Piguet that limit supply and have long waiting lists. Weak demand from Chinese consumers has also hurt the industry. The U.S. overtook Hong Kong as the top destination for Swiss watch exports in 2020. Sales to Chinese shoppers slumped during the pandemic and never really recovered. But trends there were disappointing even before Covid 19—Beijing's crackdown on gifting luxury goods to corrupt government officials began in 2012 and gradually crimped a booming market. These trends have made Swiss watchmakers more dependent on the U.S. Brands hope Americans will swallow the tariff-related price rises and continue to spend. Swatch's management told investors on its latest earnings call that U.S. consumers have been willing to accept the hikes so far because they consider the situation 'homemade [by] the American government.' But watchmakers have to tread carefully on price hikes because of the large and professional resale market. Almost a third of all global watch sales are preowned, according to WatchCharts, the highest share of any luxury goods. The resale business hit an inflection point around 2017, when it became so big that it began to influence what happens in the primary market. Data from secondhand websites shows consumers which brands hold their value, so can boost sales of new watches that look like a good investment. But there are downsides: a readily available supply of cheaper preowned watches makes it riskier for watchmakers to raise prices in their own stores. An analysis by Morgan Stanley and WatchCharts shows that demand for used watches is rising faster than for new watches. This is probably a sign that some shoppers are defecting to the resale market, where they think there is better value for money. Prices for secondhand watches have been falling for 13 consecutive quarters as supply has increased. Watch stocks have been a very volatile investment. Swatch's share price is down around 60% from where it was on the eve of the Apple Watch launch. Tariffs give investors another reason to bide their time before jumping back in. Write to Carol Ryan at
Fashion Network
03-07-2025
- Business
- Fashion Network
Watches of Switzerland hits record revenue as UK recovers and US booms
The once-unstoppable Watches of Switzerland Group has been through a few challenging periods lately but on Thursday it reported 'record revenue' in its latest year driven by 'an improved H2 trading performance [with] continued excellent strategic and operational progress'. There were a mix of numbers in the report for the year to April with some positive and some negative, so let's look at those first. Group revenue increased by 7%, or 8% at constant currency (CCY), to reach £1.652 billion. That divided into a 2% rise in the UK and Europe to £866 million and a 14% rise (or 16% CCY) in the US to £786 million. The company had a number of exceptional costs to deal with but with those factored out, adjusted EBITDA was up 8% at £192 million and adjusted EBT increased 11% to £150, million. Meanwhile, operating profit fell 5% to £114 million and statutory profit before tax was down 18% at £76 million. As mentioned, the performance improved a lot in the second half with group revenue up 12% compared to 4% in H1 on a CCY basis. Luxury watches revenue increased 1% reported in the year and 2% CCY with demand for its key brands outstripping supply in both the US and UK markets. Its Certified Pre-Owned and vintage is performing strongly, with Rolex Certified Pre-Owned becoming the Group's second largest luxury watch brand equivalent. Particularly impressive was the increase in luxury jewellery revenue which was up 106% (or 108% CCY), boosted by the acquisition of Roberto Coin Inc. Luxury branded jewellery delivered double-digit growth. Its pre-IFRS 16 guidance for FY26, which is a 53-week year, is based on the current US tariff rate of 10% maintained beyond the 90-day pause and currently announced margin changes from brand partners in response to the 10% tariffs remaining in place. As it stands today, the 10% tariff on imported goods from Switzerland has led some of its brand partners to put through mid-single-digit price increases in the US, alongside reducing their authorised distribution network's margin percentage. It expects CCY revenue growth between 6% and 10%. But the outcome of US tariff developments remains uncertain so that guidance could always change. Tariffs uncertainty aside, CEO Brian Duffy was upbeat: 'I am proud of the strong performance our team has delivered, underpinned by a significant trading improvement in H2. Our US business has continued its excellent momentum, surpassing $1 billion revenue for the first time, bolstered by the acquisition of Roberto Coin Inc. The UK has returned to growth as trading conditions have stabilised. Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.' He said it was a busy year for the group as it 'continued to deliver on our strategy at pace'. A notable highlight was the opening of the new flagship Rolex boutique on Old Bond Street, London, 'which is a great example of how we combine our retailing excellence and operational expertise to deliver a fantastic project for our brand partners and clients. We also delivered three key Rolex projects in the US across Texas, Florida and Atlanta, opened a new Patek Philippe room in Connecticut, and executed a range of additional showroom openings, expansions and upgrades'. Duffy added that the company is 'increasingly excited about the possibilities for our recently acquired Roberto Coin business in North America. Not only has it continued to trade well since acquisition, we see growing potential for this well-recognised brand in the large and growing US luxury branded jewellery market. We are pleased to have launched a marketing campaign featuring Dakota Johnson as a global brand ambassador and expect this and other pipeline projects to underpin our growth ambitions for the brand, including the opening of three mono-brand boutiques'. He's also encouraged by the strong performance of the Rolex Certified Pre-Owned programme in both the UK and US, and by the sustained growth in its pre-owned business more generally. He said: 'As we look ahead, whilst we are of course remaining mindful of the broader macroeconomic and consumer environment, including potential US tariff changes, we remain confident in the strength of our diversified business model, our strong pipeline of showroom openings and growth projects, and the resilience of the luxury watch and luxury branded jewellery categories.'
Times
03-07-2025
- Business
- Times
Watches of Switzerland posts record revenue but profits slide
Strong demand for luxury timepieces helped Watches of Switzerland to post record annual revenues but profits declined as the cost of expansion and property impairments weighed on the bottom line. The company reported group revenue of £1.65 billion for the year to April 27, up 7 per cent on the previous year, fuelled by double-digit growth in the United States. Profit before tax fell 18 per cent to £76 million, held back by rising showroom costs, new shop openings, including a flagship Rolex boutique on Bond Street, and a £43.6 million property impairment linked to high interest rates and inflation. • Business live: news, updates and analysis throughout the day The group's US business was the standout performer, with revenues climbing 16 per cent and surpassing $1 billion for the first time. Growth in the UK was more modest at 2 per cent, although it marked a return to growth after a decline in the previous year. Brian Duffy, chief executive, said: 'Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.' The group, based in Leicester, said it remained confident in the resilience of the luxury watch category, especially in the still 'underdeveloped' American market, despite caution over the broader macroeconomic backdrop and the risk of new US tariffs. RBC expects Swiss watch exports to decline by 5 per cent in value and by 7 per cent in volume this year. Its analysts said that with the probability of softening demand 'long-range plan targets are potentially at risk of disappointing or being withdrawn completely, which would be a negative catalyst for the stock'. Shares in Watches of Switzerland edged lower in early trading.
Fashion Network
03-07-2025
- Business
- Fashion Network
Watches of Switzerland hits record revenue as UK recovers and US booms
The once-unstoppable Watches of Switzerland Group has been through a few challenging periods lately but on Thursday it reported 'record revenue' in its latest year driven by 'an improved H2 trading performance [with] continued excellent strategic and operational progress'. There were a mix of numbers in the report for the year to April with some positive and some negative, so let's look at those first. Group revenue increased by 7%, or 8% at constant currency (CCY), to reach £1.652 billion. That divided into a 2% rise in the UK and Europe to £866 million and a 14% rise (or 16% CCY) in the US to £786 million. The company had a number of exceptional costs to deal with but with those factored out, adjusted EBITDA was up 8% at £192 million and adjusted EBT increased 11% to £150, million. Meanwhile, operating profit fell 5% to £114 million and statutory profit before tax was down 18% at £76 million. As mentioned, the performance improved a lot in the second half with group revenue up 12% compared to 4% in H1 on a CCY basis. Luxury watches revenue increased 1% reported in the year and 2% CCY with demand for its key brands outstripping supply in both the US and UK markets. Its Certified Pre-Owned and vintage is performing strongly, with Rolex Certified Pre-Owned becoming the Group's second largest luxury watch brand equivalent. Particularly impressive was the increase in luxury jewellery revenue which was up 106% (or 108% CCY), boosted by the acquisition of Roberto Coin Inc. Luxury branded jewellery delivered double-digit growth. Its pre-IFRS 16 guidance for FY26, which is a 53-week year, is based on the current US tariff rate of 10% maintained beyond the 90-day pause and currently announced margin changes from brand partners in response to the 10% tariffs remaining in place. As it stands today, the 10% tariff on imported goods from Switzerland has led some of its brand partners to put through mid-single-digit price increases in the US, alongside reducing their authorised distribution network's margin percentage. It expects CCY revenue growth between 6% and 10%. But the outcome of US tariff developments remains uncertain so that guidance could always change. Tariffs uncertainty aside, CEO Brian Duffy was upbeat: 'I am proud of the strong performance our team has delivered, underpinned by a significant trading improvement in H2. Our US business has continued its excellent momentum, surpassing $1 billion revenue for the first time, bolstered by the acquisition of Roberto Coin Inc. The UK has returned to growth as trading conditions have stabilised. Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.' He said it was a busy year for the group as it 'continued to deliver on our strategy at pace'. A notable highlight was the opening of the new flagship Rolex boutique on Old Bond Street, London, 'which is a great example of how we combine our retailing excellence and operational expertise to deliver a fantastic project for our brand partners and clients. We also delivered three key Rolex projects in the US across Texas, Florida and Atlanta, opened a new Patek Philippe room in Connecticut, and executed a range of additional showroom openings, expansions and upgrades'. Duffy added that the company is 'increasingly excited about the possibilities for our recently acquired Roberto Coin business in North America. Not only has it continued to trade well since acquisition, we see growing potential for this well-recognised brand in the large and growing US luxury branded jewellery market. We are pleased to have launched a marketing campaign featuring Dakota Johnson as a global brand ambassador and expect this and other pipeline projects to underpin our growth ambitions for the brand, including the opening of three mono-brand boutiques'. He's also encouraged by the strong performance of the Rolex Certified Pre-Owned programme in both the UK and US, and by the sustained growth in its pre-owned business more generally. He said: 'As we look ahead, whilst we are of course remaining mindful of the broader macroeconomic and consumer environment, including potential US tariff changes, we remain confident in the strength of our diversified business model, our strong pipeline of showroom openings and growth projects, and the resilience of the luxury watch and luxury branded jewellery categories.'
Fashion Network
03-07-2025
- Business
- Fashion Network
Watches of Switzerland hits record revenue as UK recovers and US booms
The once-unstoppable Watches of Switzerland Group has been through a few challenging periods lately but on Thursday it reported 'record revenue' in its latest year driven by 'an improved H2 trading performance [with] continued excellent strategic and operational progress'. There were a mix of numbers in the report for the year to April with some positive and some negative, so let's look at those first. Group revenue increased by 7%, or 8% at constant currency (CCY), to reach £1.652 billion. That divided into a 2% rise in the UK and Europe to £866 million and a 14% rise (or 16% CCY) in the US to £786 million. The company had a number of exceptional costs to deal with but with those factored out, adjusted EBITDA was up 8% at £192 million and adjusted EBT increased 11% to £150, million. Meanwhile, operating profit fell 5% to £114 million and statutory profit before tax was down 18% at £76 million. As mentioned, the performance improved a lot in the second half with group revenue up 12% compared to 4% in H1 on a CCY basis. Luxury watches revenue increased 1% reported in the year and 2% CCY with demand for its key brands outstripping supply in both the US and UK markets. Its Certified Pre-Owned and vintage is performing strongly, with Rolex Certified Pre-Owned becoming the Group's second largest luxury watch brand equivalent. Particularly impressive was the increase in luxury jewellery revenue which was up 106% (or 108% CCY), boosted by the acquisition of Roberto Coin Inc. Luxury branded jewellery delivered double-digit growth. Its pre-IFRS 16 guidance for FY26, which is a 53-week year, is based on the current US tariff rate of 10% maintained beyond the 90-day pause and currently announced margin changes from brand partners in response to the 10% tariffs remaining in place. As it stands today, the 10% tariff on imported goods from Switzerland has led some of its brand partners to put through mid-single-digit price increases in the US, alongside reducing their authorised distribution network's margin percentage. It expects CCY revenue growth between 6% and 10%. But the outcome of US tariff developments remains uncertain so that guidance could always change. Tariffs uncertainty aside, CEO Brian Duffy was upbeat: 'I am proud of the strong performance our team has delivered, underpinned by a significant trading improvement in H2. Our US business has continued its excellent momentum, surpassing $1 billion revenue for the first time, bolstered by the acquisition of Roberto Coin Inc. The UK has returned to growth as trading conditions have stabilised. Our performance reflects our differentiated business model, with our scale and leadership in our chosen markets, supported by long-standing, collaborative partnerships with world-leading brands across luxury watches and luxury branded jewellery underpinning sustained growth.' He said it was a busy year for the group as it 'continued to deliver on our strategy at pace'. A notable highlight was the opening of the new flagship Rolex boutique on Old Bond Street, London, 'which is a great example of how we combine our retailing excellence and operational expertise to deliver a fantastic project for our brand partners and clients. We also delivered three key Rolex projects in the US across Texas, Florida and Atlanta, opened a new Patek Philippe room in Connecticut, and executed a range of additional showroom openings, expansions and upgrades'. Duffy added that the company is 'increasingly excited about the possibilities for our recently acquired Roberto Coin business in North America. Not only has it continued to trade well since acquisition, we see growing potential for this well-recognised brand in the large and growing US luxury branded jewellery market. We are pleased to have launched a marketing campaign featuring Dakota Johnson as a global brand ambassador and expect this and other pipeline projects to underpin our growth ambitions for the brand, including the opening of three mono-brand boutiques'. He's also encouraged by the strong performance of the Rolex Certified Pre-Owned programme in both the UK and US, and by the sustained growth in its pre-owned business more generally. He said: 'As we look ahead, whilst we are of course remaining mindful of the broader macroeconomic and consumer environment, including potential US tariff changes, we remain confident in the strength of our diversified business model, our strong pipeline of showroom openings and growth projects, and the resilience of the luxury watch and luxury branded jewellery categories.'
