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Rising Prices Not Dampening Demand for Luxury Watches; Omega and Rolex Still Thriving July 24, 2023 (0 comments)
Zurich, Switzerland--Despite a price surge, luxury timepieces from iconic brands like Omega and Rolex are seeing strong sales, according to recent reports by Swatch Group AG, the maker of Omega, and Watches of Switzerland, the UK's leading retailer of Rolex watches.
[Photo by Antony Trivet via Pexels]
As per a news report published in SCMP, Swatch Group's shares have leaped by as much as 7% following CEO Nick Hayek's prediction of a possible record-breaking revenue this year, bolstered by robust demand in China and the US. Concurrently, Watches of Switzerland experienced an impressive upswing of 18% due to sustained luxury watch demand, notwithstanding recent price hikes by major brands.
First-half earnings for Swatch surpassed pre-pandemic levels for the first time, with Hayek highlighting strong demand for lower-priced watches in Asia and the US. Meanwhile, Swiss watch exports continued upward, reaching over 24 billion francs (US$28 billion) last year.
Average sales per Swatch store worldwide have seen a 30% increase, boosting group retail revenue to 40% of its total. Operating profit grew 36% to 686 million francs in the first half of 2023. The strongest growth occurred in the lowest-price segment of watches and jewelry, particularly with the affordable Omega MoonSwatch.
Swatch's half-year report projects excellent growth opportunities for the rest of 2023, with the only potential hurdle being an unfavorable currency environment. Despite a recent 8% price increase in the US, Hayek anticipates that sales will not suffer due to upcoming new product launches.
On the other hand, Watches of Switzerland reported sales of £1.54 billion (US$2 billion) for the year through April, reiterating its full-year forecast for 2024. Despite a 2.5% price increase across Rolex's range earlier this year, CEO Brian Duffy stated per the report that waiting lists and average selling prices are still rising, indicating that the demand for luxury timepieces remains undeterred.
Learn more in the entire SCMP report.