Watches of Switzerland reassures market as US tariffs loom

Watches of Switzerland, the prominent luxury timepiece retailer featuring brands such as Rolex and Patek Philippe, has moved to reassure investors that the recent 39 per cent tariffs imposed by the United States on Swiss imports should not bring an immediate material impact to its business. This reassurance led to a sharp rise in the company’s share price, which climbed 6.1 per cent to close at 338¼p, after an initial rise of more than 10 per cent.

Chief Executive Brian Duffy noted that while Watches of Switzerland does not expect the US tariffs to dramatically alter its short-term outlook, he anticipates price increases for luxury watches in both the United States and other international markets including the UK. Brands are expected to distribute the costs across various geographies rather than concentrating them solely on the American market. Duffy indicated that UK customers may see price increases contained to single or mid-single digit percentages, likely lower than those experienced recently in the US.

The retailer confirmed that about 30 per cent of its American business will be affected by price rises in the coming months, though not every increase is expected to be passed directly onto consumers. Swiss watch brands have already taken steps to mitigate the impact of US tariffs by increasing inventories, and recent figures show a 45 per cent year on year rise in Swiss watch imports to the United States in July 2025.

Analysts have highlighted that trading performance in both the US and UK remains strong, with the company’s Rolex Boutique on London’s Old Bond Street surpassing expectations. Revenue guidance for 2026 remains unchanged, with Watches of Switzerland predicting constant currency revenue growth of 6 to 10 per cent and adjusted earnings ranging from flat to 100 basis points lower for the year.

The introduction of steep US tariffs had raised concerns among investors, contributing to a decline of nearly 40 per cent in the company’s share price since January due to worries about luxury sector demand. However, Swatch Group, which counts Omega and Tissot among its brands, is planning further price rises of 5 to 10 per cent in the US to offset the levies, indicating broader industry adaptation to the new tariff regime.

Founded in London in 1924 and now listed on the FTSE 250 with its headquarters in Braunstone, Leicester, Watches of Switzerland employs approximately 3,000 staff across the UK, Europe, and the US. The company has stated it will continue to monitor the tariff situation and provide updates should there be any change to its 2026 guidance. Management remains cautiously optimistic that international negotiations may eventually ease the impact of these tariffs, although considerable uncertainty persists.