As affluent consumers grow more frugal with their spending, the leading British retailer of Rolex watches saw its shares fall to the bottom of the FTSE 250 after lowering its sales and growth projection.
The share price of Watches of Switzerland Group fell by 29.1 percent, the most ever, when the company revealed that their Christmas sales were erratic due to difficult market conditions, which it anticipates will persist this year.
With a prior estimate of £1.65 billion to £1.7 billion, it lowered its full-year sales objective to between £1.53 billion and £1.55 billion.
The previously set goals for organic revenue growth were lowered from 8 to 11 percent to between 2 and 3 percent.
“This year’s holiday season was especially turbulent for the luxury sector, with consumers reallocating spend to other categories such as fashion, beauty, hospitality, and travel,” stated Chief Executive Brian Duffy.
A decline in the luxury market following a surge during the epidemic has caused shares of Watches of Switzerland to drop by almost 57 percent in the past year.
Concerns regarding potential rivalry from Rolex, its main supplier, have also affected it since the watch company acquired Bucherer, a retailer, in August.
This is a surprising scenario seen after a long period of time. A serious review of the situation is being made following the sharp decline in the sales of the luxury watches.
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