Watches of Switzerland upbeat so far but makes move to cut spending
Watches of Switzerland delivered a trading update on Monday saying that the seven weeks up to March 15 saw its revenue rising ahead of its expectations. It was up 16.8% year-on-year and like-for-like sales rose a strong 12%.
That was despite the fact that the coronavirus pandemic affected it during the period, with its travel and tourism business adversely impacted by reduced footfall. Trading in its shops in airports in London and Las Vegas has been hit. But the company said it was able to offset the impact through higher sales to domestic customers both in the UK and the US.
But that's not to say that the boom will continue. It added that in the current environment it has “taken steps to eliminate discretionary expenditure, reduce working capital and where possible, delay capital projects”.
It welcomed the government measures in support of businesses and also said that it has taken steps “to ensure the continuity of the e-commerce proposition, with online operations expected to be continued as normal”.
It has a strong balance sheet and significant financial headroom and liquidity, which it said would enable it to “manage through a prolonged period of store closures”.
CEO Brian Duffy said: “Our priority is the health and wellbeing of our colleagues and customers during these unprecedented times. We are taking the necessary steps to mitigate and minimise the impact of this crisis on our business. We are anticipating a continuation of the store closures into our new financial year which begins on 27 April. We remain confident in the strong fundamentals that underpin the luxury watch category including its great value preservation. Demand remains strong and we anticipate that this will be the case when the market returns to more normal conditions.”
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