Watches of Switzerland experiences a decrease in UK sales due to the impact of tourist tax policies eliminating VAT-free shopping incentives, while seeing growth in the US market. The company aims to navigate challenges by focusing on client service and brand relationships, as luxury retailers in the UK adapt to a changing environment.
Watches of Switzerland Reports UK Sales Decline Amid Tourist Tax Impact
Watches of Switzerland, the retailer renowned for brands like Rolex and owner of Goldsmiths and Mayors jewellery chains, has announced a continued decline in its UK sales. The company attributes this downturn to reduced tourist spending caused by the absence of VAT-free shopping incentives.
In a recent financial update, the group reported a 4% increase in total revenue, reaching £380 million for the 13 weeks ending in April. Growth was driven by a 14% rise in US sales. However, revenue in the UK and Europe fell by 4%, reflecting challenging macroeconomic conditions.
CEO Brian Duffy highlighted the strong performance in the US and expressed cautious optimism about future trading. Despite difficulties in the UK market, mainly sustained by domestic clientele, the company aims to continue leveraging its strategy, client service, and brand relationships to foster growth and market share.
The elimination of VAT-free shopping, a government policy change from previous years, has notably affected luxury retailers dependent on affluent tourists. Companies like Burberry and Mulberry have similarly reported reduced UK sales, with shoppers opting to buy luxury items in other European cities.
