What's Happening?
Watches of Switzerland is on track to meet its first-half expectations, driven by robust sales in the U.S. market. Despite the imposition of a 39% tariff on Swiss watches by President Trump, the company has managed to maintain strong trading performance. The luxury watch retailer reported consistent growth in the 18 weeks leading up to August 31, 2025, with significant contributions from its U.S. operations. The company has strategically built up inventory to mitigate the impact of tariffs, and Swiss watch exports have increased by 45% in July compared to the previous year. CEO Brian Duffy highlighted the stability in the UK market and the expansion of the company's showroom footprint in the U.S. as key growth drivers.
Why It's Important?
The resilience of Watches of Switzerland in the face of tariff challenges underscores the strength of the luxury watch market in the U.S. This development is significant for the luxury retail sector, as it demonstrates the potential for growth despite global economic headwinds. The company's ability to navigate tariffs without a significant impact on its financial performance suggests that strategic inventory management and market expansion can effectively counteract trade barriers. This could serve as a model for other luxury brands facing similar challenges. The continued demand for luxury watches in the U.S. also highlights the country's role as a critical market for high-end goods.
What's Next?
Watches of Switzerland plans to continue expanding its presence in the U.S. with new showrooms in major cities like Miami, New York, and Las Vegas. The company is also investing in its UK operations, refurbishing existing stores and opening new luxury boutiques. As the company monitors the long-term impact of tariffs, it may adjust its strategies to maintain growth. The luxury watch retailer will likely provide further updates on its performance and any adjustments to its business model in response to evolving market conditions.
