ZURICH (Reuters) - Watches of Switzerland (WOSG.L) is considering buying more stores in the United States and predicted on Tuesday that luxury watch demand will hold up in the U.S. and Britain, where it has just bought four shops from Fraser Hart.
Britain’s biggest watch retailer, which distributes Rolex, Patek Philippe, Omega (UHR.S), Cartier (CFR.S), TAG Heuer (LVMH.PA) and Breitling, began expanding in the U.S. in 2017 by buying U.S. jeweler Mayors.
Watches of Switzerland, which reported a 10.3% increase in like-for-like sales in the half and said it expected 8-9% growth for the full year, sees opportunities to buy more stores in the U.S. where the market is “very fragmented”, its CEO said.
“Today you need more scale to participate and do the marketing, also online, so some of the small retail operations will come up for sale,” Brian Duffy told Reuters.
The retail landscape for Swiss watches has undergone major change in recent years as brands belatedly embraced e-commerce and, for their brick-and-mortar shops, preferred mono brand stores to outlets carrying several brands.
Small retailers going out of business have fueled consolidation, leading to the emergence of big champions like Watches of Switzerland, formerly Aurum Holdings, or Swiss group Bucherer that has also bought businesses in the U.S.
Duffy said successful retailers had to be actively exploiting all channels, including online sales and digital communication, but also events to reach younger customers.
He said the company was not planning to expand outside Britain and the U.S. for the time being, with the exception of travel retail locations at airports.
The group, which sells one in two Rolex watches in Britain, listed about a third of its shares in London in May.
It said it had paid for the 31.7 million pound Fraser Hart stores acquisition in cash from existing borrowing facilities.
Editing by Alexander Smith