Specialist
Former Head, Watches of Switzerland at Aurum Holdings Ltd
Agenda
- Organic and inorganic revenue growth expectations in the UK and US, discussing opportunities to diversify the brand and category mix away from supply-constrained brands
- Channel expansion, including multi- and mono-brand stores and online growth
- Cost and profitability dynamics, touching on EBITDA improvement opportunities
- International acquisition opportunities and sector consolidation expectations
Questions
1.
How sustainable are Watches of Switzerland’s growth rates in the UK market, given the importance of this
market for top-line sales? The company experienced some decent numbers during the pandemic, according to
recent announcements on its investor relations portal.
2.
What are your 3-year expectations for a more normalised growth rate for Watches of Switzerland? You
mentioned a slightly more subdued forward-looking growth rate, which is understandable given the
company’s very strong growth levels.
3.
How would the 10-15% growth rate you just mentioned over 3-5 years break down between like-for-like
growth and new-space growth?
4.
How constrained is supply across Watches of Switzerland’s brands that drive top-line for the company in the UK? Obviously Rolex comes to mind.
5.
You’ve mentioned Rolex and Patek struggling with manufacturing constraints due to coronavirus. What threat do you think this presents to short-term demand for a player such as Watches of Switzerland?
6.
What do you think is an optimal wait-list time? Watches of Switzerland has to manage customer
expectations. How could the company better manage that?
7.
What acquisition opportunities are available to Watches of Switzerland in the UK?
8.
How much opportunity is there in the UK market to purchase independently run multi-brand sites and transform them into mono-brands?
9.
What do you think is a sustainable growth rate for Watches of Switzerland in the US? You’ve spoken about
the potential growth rate in the UK, and the US presents a huge opportunity.
10.
Q: How would you break down like-for-like vs same-store growth in the US for Watches of Switzerland?
11.
What is the opportunity for Watches of Switzerland to acquire new stores in the US? Acquisition is
obviously a huge piece here, so is this similar to our discussion around the UK market? Could the company’s
US acquisition spree be driven by buying multi-site format and independent shops?
12.
What are your thoughts on Watches of Switzerland making larger acquisitions, similar to what Bucherer has done with Tourneau?
13.
What threat does Bucherer’s acquisition of Tourneau present to Watches of Switzerland’s expansion in the
US market?
14.
What are the major challenges to Watches of Switzerland’s growth in the US?
15.
What does the acquisition opportunity in the UK and the US indicate for the number of stores Watches of Switzerland could roll out in the next three years?
16.
How could Watches of Switzerland’s US expansion be split between mono-brand stores and multi-brand
formats?
17.
How do you assess average CAPEX for a multi-brand store vs a mono-brand store?
18.
What sales contribution could we expect from mono-brand as this format grows?
19.
Recent commentary suggests online sales in the UK were reaching above 14% vs total sales. How do you
expect this to change post-coronavirus?
20.
What cannibalisation is there between Watches of Switzerland’s online store and the non-supplyconstrained brands’ directly operated online stores?
21.
How do you assess the threat of the grey market online to Watches of Switzerland?
22.
There’s movement from Watches of Switzerland into the pre-owned market. How could the company adapt
to this new environment by offering a similar service to customers?
23.
To what extent do you think Watches of Switzerland can diversify away from supply-constrained brands
such as Rolex and Patek Philippe? What product mix shift could we expect from this?
24.
How big a shift could there be at Watches of Switzerland away from supply-constrained brands and
towards non-supply-constrained brands?
25.
What are you expecting for growth in luxury jewellery vs luxury watches and the mix effect there?
26.
What’s the risk of other brands such as Rolex or Patek Philippe going D2C, given some brands have been
pushing more into these markets?
