Watches of Switzerland cuts annual revenue forecast as demand wanes

LUXURY retailer Watches of Switzerland slashed its annual revenue forecast on Thursday (Jan 18), as economic headwinds prompted consumers to rein in spending and move away from splurging on luxury items.

The London-listed company now expects its full-year 2024 revenue to be between £1.53 billion (US$1.94 billion) and £1.55 billion, compared with its earlier forecast range of £1.65 billion to £1.70 billion.

Several factors ranging from geopolitical tensions, slower recovery from the pandemic fallout and raging inflation have restricted people’s spending power. Luxury brands are particularly hit with a slowdown in demand as people cope with high costs and turn judicious with discretionary spending.

“The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories,” CEO Brian Duffy said.

French luxury group LVMH, which owns Louis Vuitton and Dior, privately owned Chanel and Britain’s Burberry, have all been hit by a slowdown in demand for luxury goods.

On a constant-currency basis, the company said it now expects revenue growth of 2 to 3 per cent, compared with previously guided range of 8 to 11 per cent. REUTERS