- Stability in UK luxury watch market
- No material impact from US levies, yet
- Roberto Coin brand ‘performing strongly’
Concerns over a weaker luxury market and the impact of tariffs have sent Watches of Switzerland’s (WOSG) shares down almost 40% year-to-date.
However, the high-end timepiece seller clocked up a 7.5% gain to 343p on 3 September after stating it doesn’t anticipate ‘any material impact’ from US tariffs on Swiss imports in the first half of its financial year because brand partners have increased stock holdings in advance of these levies coming into effect.
Also driving the relief rally was news the UK’s largest luxury watch retailer has seen ongoing stability in its domestic market whilst delivering ‘good growth’ in its e-commerce business, notably in the US.
NO ALARMS & NO SURPRISES
In a well-received AGM (annual general meeting) trading update, the Rolex-to-Patek Philippe purveyor assured investors: ‘We do not anticipate any material impact from the US tariffs in H1 FY26 as brand partners have increased inventories as shown by Swiss Watch Exports in July 2025’, which were up 45% year-on-year.
Led by no-nonsense chief executive Brian Duffy, Watches of Switzerland will provide a further update as to any potential impact on current year guidance, if any, once more information is available.
Nevertheless, Shore Capital stressed this was ‘a delay rather than a mitigation and what is still unclear is what the impact on demand may be if and when higher prices do come into effect’.
In a similar vein, Jefferies warned: ‘Whether the augmented 39% US tariffs result in additional margin attrition for retailers once inventory cover runs out later in H2 will be a debate. For now, US demand remains strong, with brands’ price recovery likely to be expanded outside North America.’
CLOCKING UP GROWTH
The update confirmed a good first half-to-date for the retailer of coveted watch brands including Audemars Piguet and TAG Heuer, with trading in-line with its full-year 2026 guidance.
Over the 18 weeks to 31 August 2025, the UK luxury watch and jewellery market stability seen during last year’s second half continued and Watches of Switzerland delivered ‘good year-on-year growth’.
In the important US market, the group noted ‘consistent strong trading’ throughout the period despite the noise around increased tariffs, while acquired Italian luxury jewellery brand Roberto Coin was ‘performing strongly’.
Watches of Switzerland plans to grow and develop the Roberto Coin brand and has launched an advertising campaign featuring Hollywood actress Dakota Johnson as global brand ambassador.
KEY TEST TO COME
Russ Mould, investment director at AJ Bell, said while Watches of Switzerland’s trading update was light on detail, the lack of any major alarms and the fact the company stuck with existing guidance was enough for investors to give it a warm welcome.
‘The issue has not completely gone away, however,’ cautioned Mould. ‘Part of the reason there is no tariff impact on its North American business, which continues to tick along, is that brand partners stocked up ahead of import levies taking effect.’
Mould continued: ‘What happens to demand when tariffs start to feed into higher selling prices is the key test. Watches of Switzerland will hope the strength of the brands it stocks means any impact is limited.
‘Elsewhere, shareholders will be pleased to see a strong showing for its e-commerce arm, given the investments the group has made in this area.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.
