- Rolex to ramp up production
- Underscores demand for luxury watches
- Could reduce wait times for Watches of Switzerland customers
Luxury watches seller Watches of Switzerland (WOSG) could get a material boost from a planned increase in production of Rolex watches according to one analyst.
Shore Capital’s Eleonora Dani notes a Bloomberg report that Rolex is planning to create three temporary production facilities in Switzerland to help meet rising demand. These new sites are expected to be up and running by 2025, before the planned Bulle production facility set to commence in 2029.
Apart from the fact this move by Rolex underscores the strong demand for premium watches from a clientele which seem to be insulated from the current cost of living pressures, itself a positive for Watches of Switzerland, Dani sees further benefits.
WHY ROLEX RAMP UP IS GOOD NEWS
She said: ‘As the demand for Rolex watches is currently high and new watches are generally unavailable for immediate purchase through the company’s authorised network, Watches of Switzerland has been resorting to buyer wait lists.
‘With Rolex increasing its production capacity, it may help reduce wait times and increase the availability of Rolex watches, which could potentially benefit Watches of Switzerland by improving their sales and reducing customer wait times.’
After a strong start to life as a public company, Watches of Switzerland have almost halved from their late 2021 highs. However, at 780p, up 0.4% today, they are still way above the issue price of 270p from the May 2019 IPO.
The shares were hit by a third quarter trading update which showed sales growth had slowed in the third quarter with jewellery sales turning negative.
