LONDON — U.S. expansion is a top priority for Watches of Switzerland chief executive officer Brian Duffy, who is being honored by Jewelers for Children at its annual Facets of Hope dinner during the JCK show in Las Vegas.
The American market now represents the biggest source of growth for the transatlantic high-end timepiece and jewelry retailer.
In the year ended April 30, the Apollo Global Management-backed retailer saw group revenue rise 25 percent to 1.5 billion pounds, with U.S. revenue jumping by 52 percent to 653 million pounds. In comparison, the U.K. and European businesses saw a more modest 10 percent gain to 890 million pounds in the period.
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This high level of U.S. growth is fueled by steady acquisitions, as well as showroom openings in key locations.
The company last year purchased five stores in Minneapolis; Plano, Texas; Vail and Aspen, Colorado, and Greenwich, Connecticut, through three separate acquisitions totaling 48 million pounds. They represent combined annual sales of $100 million. It has also purchased a Rolex-anchored store in New Jersey.
The London-listed group also set up its first Watches of Switzerland store in Cincinnati, Ohio, and refurbished the Rolex mono-brand boutique at the Wynn Resort in Las Vegas. It also opened new mono-brand boutiques for Bulgari, Tudor and Grand Seiko in 2022 in the U.S.
Duffy said this strategy will be carried into 2023 with two major openings planned for Watches of Switzerland on the East Coast.
One will be in the new American Dream center in East Rutherford, New Jersey, and the other at Manhattan’s latest Midtown landmark One Vanderbilt, a 93-floor skyscraper that takes over the block bound by Madison Avenue, 42nd Street, and Vanderbilt Avenue, next to Grand Central Station.
Aiming to open by the end of 2023, the store will become the third retail outpost for Watches of Switzerland in New York, with Cartier and Omega being two anchor brands. The other two stores are in Hudson Yards and SoHo.
Duffy said the new One Vanderbilt location is “not the most obvious from a retail concentration standpoint,” as most luxury brands prefer to stay uptown on Madison Avenue and there are few other luxury retailers within blocks of the new location. But from a passing traffic standpoint, where the store will sit will be “phenomenal,” with 750,000 people passing daily, not only commuters traveling in and out of the station but also tourists who are visiting One Vanderbilt for the observatory “Summit” at the top and several restaurants inside the building.
Looking outside of the tri-state area, where the company has established a relatively solid base, Duffy said the group would like to have a bigger presence on the West Coast, where only a few mono-brand stores are in operation. But the pace of the expansion depends on whether there are good opportunities on the horizon, as some new locations take years to come into shape, and acquisition talks can take a bit of time as well. He revealed that the company is looking to participate in a handful of new retail developments in Arizona and California.
In terms of regional spending habits, Duffy, whose most recent personal watch purchase was a Girard-Perregaux x Aston Martin limited-edition Laureato in green ceramic, noted that watch shopping patterns are pretty common except for Las Vegas, where “high-end, interesting and exceptional pieces” resonate well with high rollers.
There are more differences among jewelry shoppers. In Florida, where the company has a big presence with Mayors, which it acquired in 2017, the Latin influence is strong, as yellow gold and colorful gems are in higher demand. Meanwhile, at Betteridge, the Connecticut-based jewelry retailer the company bought in 2021, big-ticket collectible pieces are popular among “very high-end clients,” according to Duffy.
“America is a wonderful market for jewelry. It’s the best in the world. Major players like Cartier and Tiffany are very happy with our progress,” he added.
With the Jewelers for Children honor, which will be awarded to him at The Venetian Las Vegas on June 4, Duffy said he is pleased with the “fair reception” he and his team got in the U.S., although he won’t be able to physically attend the event due to a private matter.
“I am very happy to be a part of it. And we’re really pleased and honored that they chose to make this award to me. I think it’s a really nice compliment. My experience of retailers in America is that they are very professional, knowledgeable about what they’re doing, and very sociable, but at the end of it is a competitive situation. It was something we were very conscious of coming into the market,” he said.
“We have been in the U.S. for five years. And I think my team and [deputy CEO and president of North America] David Hurley, in particular, have built up really good relations. We’re very pleased to be in the American market. In some respects, it’s different from what we’re used to here in the U.K., but we’ve been listening and learning and adapting and obviously been doing well,” Duffy added.
Another key emerging market for Watches of Switzerland is Scandinavia. The company plans to open two and three mono-brand stores this year in Copenhagen and Stockholm, respectively.
In the eyes of Duffy, the Scandinavian market seems “underdeveloped for luxury watches when we look at sales per capita.”
“We can see the opportunity of applying your model and formula of a big beautiful store with great client service. It’s a market that I know pretty well. I’ve spent quite a bit of time there. There is obvious affluence and great taste in the market,” he added.
As for the U.K. market, Duffy said he was “quite pleased” with the performance last year, given the challenges his team faced during the period.
“Generally it’s been a challenging situation, but the U.K. is the best luxury watch market in the world if you measure that on a per capita basis, which means that it’s much more developed than other markets around. So it offers less obvious opportunities for growth. Having said which, we opened five stores in Battersea, and we’ve really been happy with the performance,” he said.
Watches of Switzerland Group, once known as Aurum Ltd., has a bigger portfolio in the U.K. It owns the premium luxury jewelers Goldsmiths and Mappin & Webb and is the U.K.’s largest retailer for Rolex, Patek Philippe, Cartier, Omega, Tag Heuer and Breitling. The company also operates seven online transactional websites, including the preowned watch platform Analog Shift.
Duffy said he is proud that the company has continued to grow even during the pandemic, and with tourists resuming traveling, he expects the group’s earnings in 2023 to grow between 8 percent and 11 percent at constant exchange rate.
“We see that as a normalization of what’s been exceptional growth for the last couple of years in the market,” he added.