Watches of Switzerland’s third quarter update further highlighted its insulation from a damp secondary market, although that wasn’t enough to stop shares sliding.
Prices in the pre-loved watch market have been tumbling following two years of growth during the pandemic.
WatchCharts’ Overall Market Index, an indicator of financial trends in the second-hand luxury watch market, is down around 11% in the past six months, while the Subdial50, an index made up of the top 50 most-traded models on the pre-owned market accounting for over 20% of total spend globally, is down over 30% year on year.
However, as a primary-market seller, the UK’s largest luxury watch retailer is less prone to falling prices on the secondary market, although it said the pre-owned items it does sell continued to "trade well."
Not only did the results highlight its insulation from second-hand prices, but also the strength of the primary market.
Three price hikes from Rolex over the last 13 months, equating to roughly 11% in total, did little to dampen the mood among the ultra-wealthy, as revenues grew 25% in the nine months to 29 January for Watches of Switzerland.
With that being said, today’s price movement, down 7% to 931p, didn’t necessarily reflect what was a robust set of results.
The consensus among City analysts is that sales of jewellery, down 2% in the quarter to 29 January, spooked investors.
Specifically, the slip is said to have ushered in a degree of scepticism over Watches of Switzerland’s claims that it is relatively immune from weaker consumer demand.