MARKET REPORT: Watches of Switzerland clocks up rising sales

MARKET REPORT: Watches of Switzerland clocks up rising sales as lockdown savers splash out on expensive timepieces

Shares in Watches of Switzerland ticked higher after the FTSE 250 group said well-heeled shoppers are splashing their lockdown savings on expensive timepieces.

Turnover almost doubled to £298million at the UK’s biggest Rolex seller in the three months to August 1, compared with the same period last year.

Within this, luxury watch sales rose 97 per cent to £259million and jewellery by 99 per cent to £20million. The number of customers fell but the buyers spent more.

Spending time: Luxury watch sales rose 97 per cent to £259m and jewellery by 99 per cent to £20m in the three months to August 1, compared with the same period last year

According to boss Brian Duffy, wealthy customers have been spending the money they’ve saved on posh watches. He said: ‘It’s going to last forever, it’s a family heirloom. So, therefore, in these circumstances, when people have money to spend, our category is high up in their priority list.’

The company has 153 stores in the UK and US under the Watches of Switzerland, Goldsmiths, Mayors and Mappin & Webb brands.

The first quarter was always expected to surge in comparison to 2020, when trading was hampered by tight Covid restrictions. But it also managed to outdo its 2019 performance by 42 per cent.

A fall in tourist business is being made up from sales on its website, where it sells watches ranging from a mere £195 to £446,400. Online sales were up 16 per cent. Shares rose 3.3 per cent, or 34p, to 1058p, putting it among the top risers on the FTSE 250.

Stock Watch – Purplebricks 

Purplebricks shareholders were wary of the company’s plans to take on its self-employed estate agents as permanent members of staff.

The transition will cost up to £4million, which will be added in its 2022 results, and ongoing administrative costs will be £1m higher.

In addition, the firm plans to spend up to £4million on a marketing spree.

Boss Vic Darvey said the pandemic had ‘highlighted the challenges of being self-employed for many people’.

Shares in the AIM-listed group, which was founded in 2014 and operates online, fell 5.8 per cent, or 4.1p, to 67p.

Taking the top spot was Britain’s second-biggest defence contractor, Babcock International, after JP Morgan raised the target price on its stock from 350p to 400p. Babcock, whose shares rose 7 per cent, or 20.2p, to 307.5p, was hit hard two years ago by claims from a mysterious short-seller called The Boatman Capital, which claimed it had a fraught relationship with the Ministry of Defence.

Argo Blockchain suffered for a second day – falling 5.4 per cent, or 7p, to 123p – as it dealt with becoming Boatman’s latest target.

The research outfit said Argo’s deal to buy land in Texas for £12.6million to develop bitcoin mining sites was a mistake. It believes the land is only worth £121,000 and as a result raises serious governance questions but Argo resolutely disputes the allegations.

Both of London’s major indexes rose, with the FTSE 100 up 0.4 per cent, or 28.74 points, to 7161.04, and the FTSE 250 by 0.5 per cent, or 118.61 points, to 23572.05.

Paddy Power-owner Flutter Entertainment was the top riser among the blue-chips after it said revenue from its betting shops, which reopened in June, was above pre-Covid levels.

Worldwide revenue doubled to £3billion in the six months to June 30 as reopenings and the Euro 2020 football drove a boom. 

Flutter rose 7.8 per cent, or 1010p, to 13950p. Elsewhere, robust company figures were muted slightly by some areas falling short of the levels hit before the pandemic.

Holiday Inn-owner Intercontinental Hotels Group lost ground despite swinging back to profit as people in the US and China started going on more trips.

It made £48million in the first half of the year compared with a £199million loss in 2020 but revenues are still 2.5 per cent lower than before Covid. It fell 0.6 per cent, or 30p, to 4705p.

Investors welcomed a trading update from housebuilder Bellway (up 1.3 per cent, or 42p, to 3352p) that revealed it has a record order book of more than 7,000 homes. But the number of completions in the year to July was slightly lower than before Covid.

River & Mercantile shot higher after it prepared to sell its fiduciary arm, which manages pension fund investments and has £43billion under management.

The group said it had received a number of offers from businesses keen to acquire the Solutions division and has hired advisers to guide it through any moves. It rose 6.7 per cent, or 14p, to 224p.

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