Our competitive advantage

the Luxury Watch market has a strong track record

The luxury watch industry is well protected with high barriers to entry and a track record of consistent long term growth, underpinned by sustained investment and elevated innovation.

The Group estimates global retail sales of luxury watches were approximately £37.3 billion in 2021 (£28.3 billion), including the Swiss market, repairs and the contribution from non-Swiss luxury watch brands.

Luxury watches have continued to be supported by long term increases in prices, with the average selling price of Swiss watch exports (wholesale) generating a 21-year CAGR of +4.0% (2021 vs 2000).

Watches at the luxury end of the market have outperformed lower priced segments and represent 93% of the value of global Swiss watch exports in 2021.

disciplined distribution management through Selective DISTRIBUTION agreements

Distribution of luxury watches takes place under Selective Distribution Agreements, strict legally binding contracts entered into with brands.  These are ordinarily limited by geography and ensure retailers maintain strict presentation standards.  Selective distribution agreements enable brands to manage the number of points of sale and qualitative criteria on retailer approval.  Product presentation and customer experience are closely monitored by the brand owners.

Globally, the retail market for luxury watches is predominantly comprised of a large volume of small retailers.

global BRANDS HAVE SUPPLY DRIVEN GROWTH

For the total luxury watch industry, demand has increased at a faster rate than production, in part reflecting the labour-intensive nature of watchmaking and its dependence on highly skilled watchmakers in Switzerland.  Long term growth has been underpinned by increased average selling price (ASP), positive mix effects and limited volume increases.  

Luxury watch brand owners are made up of major independents, large groups and smaller independents as can be seen below.  Our Group provides the largest selection of luxury watches covering a wide range of prices and consumer preferences, including the largest and best known brands alongside smaller independent brands.

We stock confidently which provides our clients with a greater width and depth of availability, the table opposite shows the breakdown of the Group's brand partners.

loyal, Diverse, multi-generational cLIENT base

Luxury watches attract a set of shoppers who can become repeat clients, spanning age, income groups and genders.

Showroom design, location, marketing and client service of the Group appeal to a broad demographic audience.

continuous PRODUCT INNOVATION and advancement

Luxury watches are characterised by a focus on product innovation and advancement which are normally introduced at prestigious watch fairs in Switzerland.  In the UK and the US, there is a strong preference for sports models with the key brands consistently investing to ensure the highest degree of technical (diver, aviation and chronograph) specifications.

This year saw the return of physical watch fairs, with Watches and Wonders Geneva, where exciting new products were launched, accompanied by relevant marketing support.  

During the pandemic, the luxury watch industry has been resilient and agile, recovering from the closure of production facilities during lockdown in 2020.

geogrpahical markets

The Group operates in the UK and US markets, two of the major Swiss Watch markets.  We have also announced our entry into the European market through mono-brand boutiques.

The UK market has outperformed all major European and the US market since 2000.  The UK market has the highest per capital retail spend by domestic clients on luxury watches; we believe the differential to other markets reflects retail investment, not consumer behaviour, creating an opportunity to successfully replicate our model in other geographies and building on the success we have delivered in the US to date.

the UK market

The UK is the fifth largest market on a global basis for Swiss luxury watch exports.  The Group estimates retail sales of luxury watches amounted to £2.3 billion in calendar year 2021 (£2.2 billion in 2020). 

The UK market has been strong, a testament to a well-invested multi-channel market and highly engaged and sophisticated domestic clientele which has typically had a preference for the sports luxury watch category.  

In the period 2000 to 2021, Swiss watch exports to the UK increased by a CAGR of +7.2%.

The UK market is made up of national groups, independent jewellers, luxury department stores and boutiques directly operated by the brands.

The UK market is led by Rolex, with strong market positions of Patek Phillipe, OMEGA, Cartier, Breitling, TAG Heuer and TUDOR.

the US market

After a period of under-investment in the market leading up to 2018, the US has started to perform strongly and is today the largest global market for Swiss watch exports, overtaking China.  The Group estimates retail sales of luxury watches reached $6.4 billion in 2021 ($4.2 billion in 2020). 

The US market is led by Rolex, with strong market positions of Cartier, Patek Phillipe, Audemars Piguet, OMEGA, Breitling, Panerai and TAG Heuer.  There is also relatively strong market positions for smaller independent brands such as MB&F, Bovet and H Moser.

US retail distribution is in the process of consolidation towards larger showroom formats in major shopping centres and retail investment from the Watches of Switzerland Group and others has increased.  The US market is predominantly domestic, although domestic tourism (e.g. to Florida or Las Vegas) is significant.

EUROPE

The European market shares some similarities to the US market, with a large level of fragmentation.  Luxury watch sales per capita lag behind the UK market.  

Consumer prices in Europe are largely harmonised in Euro and also in £ sterling and Swiss Franc.  Certain markets (Paris, Milan, Munich, Amsterdam, Vienna) have high levels of tourist sales.

pre-owned watcH market

We believe the pre-owned market is a positive development for the first-hand market. It provides liquidity and value preservation for luxury watches.  This is a growing sector due to the supply of certain products being inadequate to meet demand in the first-hand market.  The market is made up with pre-owned and online marketplace players.

The pre-owned market today has an increasing dependence on product sold at prices above retail due to unavailability scarcity.

The pre-owned watch market contributes to the circular economy.

luxury jewellery

Our luxury watch business is complemented a strong luxury jewellery offering.

The global luxury jewellery market has seen global trends towards the branded component of the market.  The luxury jewellery market has grown at a CAGR of 7.7% from 2007 to 2021 (Source: Bain Altagamma).

The US and UK markets are among the largest globally on a per capita basis for luxury jewellery (Source: World Gold Council).

The US is the strongest market in the Western world for luxury jewellery per capita.

AFTER-SALES and SERVICING

The Group believes after-sales and servicing complements the first-hand market for luxury watches and is critical in protecting and prolonging the life of the products. 

The market is primarily supported by multiple and independent retailers and dedicated watch or jewellery repair companies.  The Group estimates after-sales and servicing represents approximately 5% of the market and is very important in terms of providing a luxury customer experience.

The Group continues to expand the capacities of its UK National Watch Service Centre in Manchester and US centre in Fort Lauderdale.