Watches of Switzerland travel & tourism business hit by Covid-19

Watches of Switzerland said on Monday that its travel and tourism business has been hit by reduced footfall due to the Covid-19 outbreak.

The group said that in the seven weeks to 15 March, revenue rose 16.8% relative to the prior year and like-for-like sales were up 12%, ahead of expectations. While trading in stores at the airports in London and Las Vegas was affected by the virus outbreak, this was offset through higher sales to domestic customers both in the UK and the US, it said.

In light of accelerated containment measures, however, the company’s US stores have been closed since 19 March, while UK stores will close from Monday. As a result, it currently expects total revenue for the year to 26 April 2020 to be in the range of £809m to £812m.

"Given the current environment, the group has taken steps to eliminate discretionary expenditure, reduce working capital and where possible, delay capital projects. Government measures announced of business rates suspension, employee cost support and tax payment deferrals, are expected to have a positive impact on cash planning."

Watches of Switzerland said it has taken steps to ensure the continuity of its ecommerce proposition, with online operations expected to continue as normal.

Chief executive Brian Duffy said: "We are anticipating a continuation of the store closures into our new financial year which begins on 27 April 2020. We remain confident in the strong fundamentals that underpin the luxury watch category including its great value preservation. Demand remains strong and we anticipate that this will be the case when the market returns to more normal conditions."