Watches of Switzerland: The worst is over for the luxury watch market

Watches of Switzerland has said the worst is over for the luxury market in the UK as it reported steadying demand for high-end watches from its stores.

In a trading update this morning, the retailer said it was trading in line with expectations and “on track” to meet 2025 guidance.

“Luxury branded jewellery has also performed well globally,” the company said. “We have seen continued stabilisation of the UK market in both luxury watches and jewellery following a period of challenging macroeconomic conditions in the prior financial year.”

The FTSE-250 company’s shares have fallen by over 43 per cent this year after a sharp profit decline due to a slowdown in the broader luxury market. Investors have also been spooked by a decline in the price of pricy watches from the market’s pandemic-era boom.

Watches of Switzerland was also hit when its cornerstone partner, Rolex, announced that it had acquired the Swiss watch retailer Bucherer.

In January, it issued a profit warning after a tough Christmas for the retail sector, which also badly affected Mulberry and Burberry.

Now, however, things might be looking up: It announced further expansion into the US and the opening of a host of new stores.

It opened a Mappin & Webb in Edinburgh and a Patek Phillipe showroom in Connecticut. The group also outlined plans to open a Manchester boutique in April 2023.

Further projects to open during the year’s second half include a Rolex boutique on Old Bond Street and the Audemars Piguet Townhouse in Manchester.

Trading updates last month in the luxury sector were mixed, so further results will give a clearer indication of where the market is heading—particularly industry bellwether LVMH’s third-quarter results due out in October.

“We believe [the results] should provide some reassurance, given some concerns heading into the print of a potential guidance cut,” analysts at RBC Capital said.

“Overall, these results provide another print with no disappointment, which are small steps towards rebuilding credibility in our view.

Watches of Switzerland remains a show-me story, and we believe the equity story is set up for a 2026 top-line acceleration supported by a handful of large new store openings in late 2025.

We do not expect to see changes to consensus estimates,” analysts added.