Shares of the Swiss watch company fell by about a third on Thursday, after the luxury watch retailer warned that sales would be lower than expected after UK shoppers shunned expensive ornaments during the crucial holiday season.
“[C]Difficult macroeconomic conditions impacted consumer spending in the luxury retail sector. “We now expect these difficult conditions to continue throughout our financial year,” the London-listed group said.
The retailer, which sells brands including Rolex, Breitling and Patek Philippe, now expects full-year 2024 revenue to be between £1.53 billion ($1.94 billion) and £1.55 billion, down from its previous forecast range of £1.65 billion. To 1.70 billion pounds sterling.
“The festive period was particularly volatile this year for the luxury sector, with consumers allocating spending to other categories such as fashion, beauty, hospitality and travel,” said chief executive Brian Duffy.
Swiss Watches participates in WOSG,
WSGF,
At one point on Thursday it was down 32.3%, a record decline that took the stock to its lowest levels since October 2020. Since hitting a record high of around 1,500p in December 2021, when the luxury sector attracted high levels of spending during the Covid pandemic. Shares lost 73%.
The luxury retailer's shares also suffered from news last year that Rolex had bought rival Bucherer, raising concerns that the watchmaker would sell more of its watches directly to consumers.
“Retail trends suggest consumers have prioritized experiences such as foreign holidays over big-ticket goods in recent months, meaning fewer people have given Watches of Switzerland the time of day,” said Ross Mould, investment director at AJ Bell.
“This has exacerbated problems for the company that emerged last year as sales growth slowed and the watch market was flooded with used watches, impacting prices,” Mold added.
Watches of Switzerland is affiliated with London-listed Burberry BRBY.
burpee,
Being the latest luxury goods group to warn of declining sales amid softer economic conditions.
However, there was better news for the sector outside Switzerland, where luxury group Richemont reported a sharp rise in its revenues in the last three months of 2023, driven by rising jewelery sales in China and Japan.
Richemont CFR shares,
sevroy,
It added nearly 10%, which helped lift French peers such as LVMH MC,
LVMHF,
dry care,
Broy,
Hermes International RMS,
Which pushed the CAC 40 index in Paris to rise by 0.8%.
Germany's DAX index (DX:DAX) rose 0.6%, while London's FTSE 100 UK:UKX was lagging behind with a gain of just 0.2% as utilities struggled again after a higher-than-expected inflation reading on Wednesday continued to hit interest rate-sensitive sectors.
One of the bright spots in London was Flutter Entertainment FLTR,
Shares in the betting group that owns FanDuel jumped 13% as investors shrugged off news of a string of gamblers' gains and welcomed a planned US listing on January 29 on the New York Stock Exchange.
