Swiss watches more cautious after strong first quarter
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ZURICH, Aug 16 (Reuters) – Luxury watch retailer Watches of Switzerland (WOSG.L) expects a potentially tougher trading environment in the second half of its current fiscal year, it said on Tuesday, as difficult economic conditions affect spending patterns.
“We’re not really concerned because so much of our business is supply-driven,” Chief Executive Brian Duffy said in an interview with Reuters. “But we cannot ignore the world’s concerns about the economy, the cost of living and inflation. That will affect consumer sentiment.”
“We’re quite confident, but it’s appropriate that we introduce an element of caution,” added Duffy.
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The Rolex retailer, which has long waiting lists for scarce timepieces, confirmed it expects sales of between £1.45 billion ($1.8 billion) and £1.50 billion for its fiscal year ending in April 2023.
In the 13 weeks to July 31, group sales rose 25% at constant exchange rates to £391 million, the company, which does about two-thirds of its sales in the UK and a third in the United States, said in a trade update.
Duffy said the group isn’t facing significant inflation on its cost basis — mostly store rents and salaries — but the brands had pushed through additional price increases this summer, on top of the 4% to 5% announced earlier this year, accounting for annual ones rate to rise to around 7%.
He said the group’s expansion into continental Europe is going well. The company recently opened a boutique in Stockholm and has more openings planned in Scandinavian countries in the coming months.
Watches of Switzerland shares were up 3.3% to 913.67 francs by 0901 GMT, after rising as high as 946.5 francs, their highest level in more than two months.
($1 = 0.8305 pounds)
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Reporting by Silke Koltrowitz; Adaptation by David Holmes
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