ZURICH, Feb 27 (Reuters) - The coronavirus is keeping tourists away and hitting sales of British retailer Watches of Switzerland, particularly in its London boutiques, the company said on Thursday.
Tourists from China, where the virus originated in December, have traditionally been the biggest buyers of Swiss watches.
Chief Executive Brian Duffy said in the nine months since the company’s initial public offering the share of sales to Chinese nationals had fallen from around 10% to 7.8%.
“The impact of coronavirus and Chinese tourists not coming has been particularly sensed since the beginning of February,” he told Reuters.
“It obviously impacted Chinese New Year plans which are normally a spike in business.”
Organisers of the Geneva watch fair said on Thursday they were cancelling their event due to the virus. The rival Baselworld show is still scheduled to take place from April 30.
Duffy said there was some evidence of brands shipping unsold stock from China to other markets.
“There will be stockbuilding because consumption clearly has reduced in China and a lot of Chinese-dependent markets, Hong Kong and Switzerland probably being the next obvious.”
Demand for Rolex, Patek Philippe and Audemars Piguet timepieces in particular was so strong there were actually supply constraints, he said.
“So if there’s a reduction in one consumer group, it’ll be to the benefit of others,” Duffy said, adding they’d not had any additional allocation of product yet.
Watches of Switzerland, which also owns Mappin & Webb, Goldsmiths and U.S.-based Mayors, reported like-for-like sales growth of 8.9% for the nine months to Jan 26.
But the company, which has 127 showrooms, saw a slower 6.8% increase in the last three months of that period.
The group’s biggest shareholder, private equity firm Apollo Global Management, sold a stake worth 118.8 million pounds ($154.37 million) in the retailer last month, reducing its stake to 42.1%.
“It’s not their business holding major shareholdings in public companies so it’s a reasonable expectation they’d sell down over a period,” Duffy said. ($1 = 0.7696 pounds) (Reporting by Silke Koltrowitz; Editing by Nick Macfie)