REG - Watches of Switzlnd. - Annual Financial Report
31/07/2025 12:00
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RNS Number : 4309T Watches of Switzerland Group PLC 31 July 2025
31 July 2025
Watches of Switzerland Group PLC (the "Company")
Annual Report and Accounts 2025
In compliance with UK Listing Rules 6.4.1 and 6.4.3, the Company announces
that the following documents have today been submitted to the UK Financial
Conduct Authority, and will shortly be available for inspection via the
National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
1. Annual Report and Accounts 2025; and
2. Notice of Annual General Meeting of the Company, to be held at 36
North Row, London W1K 6DH at 2.30pm on 3 September 2025
In accordance with DTR 6.3.5(3) the Annual Report and Accounts 2025 and the
Notice of Annual General Meeting are accessible on the Group's website:
thewosgroupplc.com (https://www.thewosgroupplc.com/investors/results-centre/)
A condensed set of Watches of Switzerland Group PLC financial statements and
information on important events that have occurred during the year and their
impact on the financial statements were included in the Company's FY25 results
announcement on 3 July 2025. That information together with the information
set out below which is extracted from the Annual Report and Accounts 2025
constitute the requirements of DTR 6.3.5 which is to be communicated via an
RNS in unedited full text. This announcement is not a substitute for reading
the full Annual Report and Accounts 2025. Page and note references in the text
below refer to page numbers in the Annual Report and Accounts 2025. To view
the FY25 results announcement visit the Company website:
thewosgroupplc.com/investors
(https://www.thewosgroupplc.com/investors/results-centre/)
For further information, please contact:
Laura Battley
Company Secretary and General Counsel
+44 (0)20 7317 4604
companysecretariat@thewosgroup.com (mailto:companysecretariat@thewosgroup.com)
Additional Information
Principal risks and uncertainties
Below are descriptions of our principal risks and uncertainties and
explanations of how we manage or mitigate the risk. It is recognised that the
Group is exposed to risks wider than those listed. However, we have disclosed
those we believe are likely to have the greatest impact on our business at
this moment in time.
Principal risk description How we manage or mitigate the risk
Business Strategy Development and Execution
If the Board adopts the wrong strategy or does not implement its strategy The Board reviews its business strategy on a regular basis to determine how
effectively, the business may suffer. The Group's growth strategy exposes it sales and profit can be maximised, and business operations can be made more
to risks and the Group may encounter setbacks in its ongoing expansion in the efficient.
UK and US.
The Board has significant relevant experience, including in the retail and
The Group's significant investments in its showroom portfolio, IT systems, luxury markets.
colleagues and marketing may be unsuccessful in growing the Group's business
as planned.
The CEO provides updates to the Board on key development opportunities and
initiatives.
As the Group continues to make acquisitions, these may prove unsuccessful or
divert its resources. Further growth through acquisition is dependent upon the
Group's ability to identify suitable targets, conduct effective due diligence,
negotiate transactions on favourable terms, complete such transactions and Expansion of the property portfolio or potential acquisitions must meet strict
successfully integrate the acquired businesses. payback criteria.
Return on investment of marketing and other investment activity is monitored
The Group may fail to respond to the pressures of an increasingly changing closely.
retail environment effectively and rapidly. The re-evaluation of priorities
and their delivery, including the consideration of initiatives to respond to
permanent changes in client behaviours or to change working practices, is
paramount in the current environment. Key management information is provided to the Board on a regular basis to help
inform strategic decision-making.
The Group has adapted its strategy to take advantage of online trading, client
appointments and introduced the Luxury Watch and Jewellery Virtual Boutique to
maximise sales.
The Group has diversified its operations through the expansion of mono-brand
boutiques, ecommerce platforms, and enhanced luxury branded jewellery offers.
There is international market diversification reducing reliance on one
territory.
Key Suppliers and Supply chain
The manufacture of key luxury watch brands is highly concentrated among a The Group fosters strong relationships with brand partners and other
limited number of brand partners and the production of luxury watches is suppliers, many of which have been held for a significant length of time.
limited by the small number of master watchmakers and the availability of
artisanal skills. Owners of luxury watch brands control distribution through
strict, Selective Distribution Agreements. Consequently, the relationship with
owners of luxury watch brands is crucial to the Group's success. Supplier distribution contracts are closely monitored to ensure continued
compliance with contractual obligations.
Some of the Group's distribution agreements with luxury watch brands provide
owners of such brands with a right to terminate the agreement in the event of The Group works collaboratively with brand partners to identify product trends
a change of control and/or management of the Group. and forward demand.
The Group is subject to the risk that owners of luxury watch brands may decide Continued focus on providing exceptional client experience, representing the
to terminate these contracts or otherwise not to renew them upon expiry, or to brands in the best possible way.
reduce the number of agencies they grant to the Group.
Client experience is further elevated through new, larger showrooms that are
The Group's distribution agreements with suppliers do not guarantee a steady supported by the brands.
supply of merchandise.
In-depth training for showroom colleagues is provided, including specific
The Group's business model may also come under significant pressure should the training provided by the brand partners.
owners of luxury watch and jewellery brands choose to distribute their own
watches, increasingly or entirely by-passing third-party retailers such as the
Group.
The Group's sales mix is becoming more broad-based, with less reliance on
individual brands to drive success.
Review opportunities to extend our expertise into complementary business and
service models.
Client Experience and Market Risk
The Group provides the ultimate luxury environment for its clients to feel
welcome, appreciated and supported.
An inability to maintain a consistent high-quality experience for the Group's
clients across the sales channels, particularly within the showroom network,
could adversely affect business.
Our Xenia Client Experience Programme further elevates our client experience
proposition.
The increased number of registration of interest (ROI) watches could adversely
impact the perceived client experience.
Our brand partners audit and assess our client experience enabling us to
independently benchmark and evaluate our performance.
The Group faces competition and any failure by the Group to compete
effectively could result in a loss of market share or the ability to retain
supplier agencies. Long-term consumer attitudes to diamonds, gold and other Exceptional training is provided for our showroom colleagues, and other
precious metals and gemstones could be affected by a variety of issues, client-facing colleagues, to allow them to provide the best client service,
including concern over the source of raw materials, the impact of mining and along with in-depth product knowledge.
refining of minerals on the environment, labour conditions in the supply
chain, and the availability and perception of substitute products, such as
cubic zirconia and laboratory created diamonds.
The CRM database allows the Group to engage with the client on their journey
from potential to loyal client.
Equally, longer-term consumer attitudes to more technologically advanced
watches, such as 'smart watches', could reduce consumer demand for luxury
watches.
The Group continues to invest in and develop its product offering to improve
the value offered to consumers, retailers and manufacturers.
Competitor activity is monitored in detail, enabling strategic decision making
on key market positions.
Our Luxury Watch and Jewellery Virtual Boutique experience is a unique
differentiator and recognised as a competitive advantage, as is the Group's
scale and technological capabilities.
Consumer trends are monitored to ensure product ranges remain aligned to
client demand.
Colleague Talent and Capability
The Group depends on the services of key talent to manage its business, and The Trading Board considers the development of Senior Management to ensure
the departure of such colleagues or the failure to recruit and retain suitable there are opportunities for career development, promotion and appropriate
personnel could adversely affect the Group's business. succession.
Client experience is an essential element in the success of the Group's The Nomination Committee considers succession planning for the Board, and
business, where many clients prefer a more personal face-to-face experience Senior Management.
and have established strong relationships with the Group's retail colleagues.
An inability to recruit and retain suitably qualified colleagues, especially
with specialised knowledge of luxury watches and jewellery, would have a
material impact on the Group. The Company's recognition programmes are in place to incentivise and motivate
colleagues.
A wide range of training and development programmes are available to
colleagues.
The Colleague Engagement Survey provides an insight into what colleagues feel
would make the Group an even better place to work.
The Group continually reviews the remuneration and benefits packages for all
colleagues.
We utilise a two-way engaging, global communications platform, CONNECT. This
digital channel underpins Group communications to colleagues.
Data Protection and Cyber Security
The increasing sophistication and frequency of cyber-attacks, coupled with Significant investment in systems development and security programmes.
data protection laws, highlight the escalating information security risk
facing all businesses.
Systems vulnerability and penetration testing is carried out regularly.
As the Group operates in the UK and US markets, the regulatory environment
surrounding these areas is considered more complex. Security breaches and
failures in the Group's IT infrastructure and networks, or those of The Group's IT / Data Steering Committee meets regularly to review related
third-parties, could compromise sensitive and confidential information and processes and emerging risks.
affect the Group's reputation.
Continuous and dynamic training, and enhanced anti-phishing awareness
campaigns have been rolled out to all employees.
Theft or loss of Company or client data or potential damage to any systems
from viruses, ransomware or other malware could result in fines and
reputational damage to the business that could negatively impact on our sales.
Enhanced multi-factor authentication (MFA) enforced across the Group.
Next generation email security system implemented.
New 24/7 security operations centre (SOC) service onboarded.
Improved reporting capabilities allowing all colleagues to promptly report any
suspicious content or activity they encounter.
External maturity assessment conducted to validate continuous security
improvement programme.
Business Interruption
Adverse weather conditions, pandemics, travel disruption, natural disasters, The Group has a framework of operational procedures and business continuity
terrorism, acts of war or other external events could adversely affect plans that are regularly reviewed, updated and tested.
consumer discretionary spending or cause a disruption to the Group's
operations.
The multi-channel model allows clients to continue their relationship with us
and to purchase in the event of disruption to any single channel.
The inability of the Group to be able to operate showrooms or a significant
reduction in available colleagues to operate the business, such as during a
material pandemic, would significantly impact the operations of the business.
Robust security arrangements are in place across our showroom network to deter
and prevent crime and, in the event of an incident, protect people and
products.
The Group offers flexible delivery options (home delivery or Click &
Collect in showroom) and its online operations rely on third-party carriers
and transportation providers. The Group's shipments are subject to various
risks, including labour strikes and adverse weather. A comprehensive insurance programme is in place to offset the financial
consequences of insured events.
The Group may experience significant theft of products from its showrooms,
distribution centres or during the transportation of goods. Loss of high-value A detailed IT development and security roadmap is in place, aligned to our
low-availability pieces could damage our reputation and our clients may become strategy.
less inclined to visit our showrooms.
Reliable and reputable third-party logistic partners have been engaged to
Disruptions to, or failures in, the Group's IT infrastructure and networks, or ensure the secure transportation of goods.
those of third-parties, could disrupt the Group's operations, especially
during periods of increased reliance on these systems such as those
experienced during the pandemic lockdowns.
The Group has in place action plans to effectively deal with the impact of a
pandemic on business operations.
The Group relies on IT networks and systems, some of which are managed by
third-parties, to process, encrypt and transmit electronic information, and to
manage or support a variety of business processes and activities, including A Group-wide crisis response programme is in place and is tested regularly.
sales, supply chain, merchandise distribution, client invoicing and collection
of payments.
Regulatory and Compliance
Fines, litigation and reputational damage could arise if the Group fails to Regular monitoring of economic and political events.
comply with legislative or regulatory requirements including, but not limited
to, consumer law, health and safety, employment law, data protection,
anti-bribery and corruption, competition law, anti-money laundering and supply
chain regulations. Focus on client service to attract and retain clients.
As the Group continues its US expansion and trades in increasing state Fostering brand loyalty and exclusivity.
jurisdictions, there is a risk the business lacks the detailed knowledge of
local US laws and regulations resulting in a breach, significant fine and
reputational impact.
The Group updates internal return on investment hurdles and criteria to
reflect changing market environments.
Detailed sales and inventory data is analysed to anticipate future trends and
demand, taking into consideration the current economic environment.
Regular review of supply chain and sourcing options.
Through continued expansion in the US, the Group is not wholly dependent on
the economic or political environment in one single market.
Operational activities have been amended, and continue to be updated, to
comply with guidance provided by the Government to prioritise the safety of
colleagues and clients.
Regulatory compliance reviews form part of the rolling Internal Audit plan.
Economic and Political
The Group's business is geographically concentrated in the UK and US, with a Regular monitoring of economic and political events.
more limited European footprint. Any sustained stagnation or deterioration in
the luxury watch or jewellery markets or decline in consumer spending in these
territories could have a material adverse impact on the Group's business.
Focus on client service to attract and retain clients.
The Group or its suppliers may not be able to anticipate, identify and respond
to changing consumer preferences in a timely manner, and the Group may not The Group updates internal return on investment hurdles and criteria to
manage its inventory in line with client demand. reflect changing market environments.
Ongoing legal, political, and economic uncertainty in the UK, US and Detailed sales and inventory data is analysed to anticipate future trends and
international markets could give rise to significant currency fluctuations, demand, taking into consideration the current economic environment.
interest rate increases, adverse taxation arrangements or affect current
trading and supply arrangements.
Through continued expansion in the US, the Group is not wholly dependent on
the economic or political environment in one single market.
Brand and Reputational Damage
The Watches of Switzerland Group's trading brands and its corporate brand are The Group has a clear and open culture with a focus on trust and transparency.
an important asset, and failure to protect the Group's reputation and brand
could lead to a loss of trust and confidence. This could result in a decline
in the client base, affect the ability to recruit and retain the best people,
and damage our reputation with our suppliers or investors. Excellent client experience is a key priority of the Group and subject to
independent scrutiny by our major brand partners through mystery shopping
programmes.
The Group undertakes regular client engagement to understand and adapt the
product, offer and showroom environment.
The use of impactful, digital-led marketing, along with an in-depth knowledge
of products, makes the Group an authority in the markets it serves.
Training and monitoring of adherence by colleagues to Group policies and
procedures.
Ongoing monitoring of social media and digital channels for abuse of Group
copyright and disreputable content.
The Group has conducted a materiality assessment to understand the priorities
and focus areas of its stakeholders, including colleagues, brand partners and
other suppliers, investors and community groups.
Financial and Treasury
The Group's ability to meet its financial obligations and to support the The Group had a total of £368.9 million in available committed facilities at
operations and expansion of the business is dependent on having sufficient 27 April 2025 with a term of three years.
funding over the short, medium and long-term. The Group is reliant on the
availability of adequate financing from banks and capital markets to meet its
liquidity needs.
The Group's net cash position and available funding is actively managed
through a Group Treasury policy and cash flow projections are regularly
monitored by management and the Board.
The Group's level of indebtedness could adversely affect its ability to react
to changes in the business and may limit the commercial and financial
flexibility to operate the business.
Exchange and interest rates are regularly reviewed to determine if hedging
should be put in place.
The Group is exposed to foreign exchange risk and profits may be adversely
impacted by unforeseen movements in foreign exchange rates.
A three-year strategic cash flow is prepared and stress-tested, including the
impact on covenant calculations.
Significantly reduced trading over an extended period could impact the
business's ability to operate within committed credit facilities.
Climate Change
The increased frequency of extreme weather events may lead to the significant Climate-related issues are addressed on a regular basis by the ESG Committee,
disruption of retail showrooms, offices and distribution centres, through which is chaired by an Independent Non-Executive Director.
flooding and strong winds. The supply chain may also be impacted through
transporting goods to showrooms and directly to our clients.
The ESG Committee challenges the Group on progress against climate-related
goals and targets.
In a changing climate, there is the potential for higher insurance premiums
across business operations, especially those taking place in geographies
particularly impacted by extreme weather events.
Key climate-related risks and opportunities are governed via our Audit &
Risk Committee along with the accuracy of and compliance with ESG-related
disclosures, including TCFD.
The increasing cost of energy and potential regulatory
mechanisms on direct carbon emissions, may impact business financials and
profit if the Group cannot transition to a low-carbon business model. The ESG agenda continues to evolve rapidly and annual training for Board
members is maintained to ensure that they have sufficient knowledge for
effective decision-making.
The Group's reliance on premium raw materials, which are a finite resource,
increases its exposure to resource scarcity, and the potential increased cost
of obtaining these resources in a challenging and competitive supply chain The CEO has overall operational responsibility for climate strategy and the
environment. mitigation of related risks.
The Group may fail to implement its mitigation strategy to reduce its impact The CFO has day-to-day operational responsibility for climate-related risks
on the climate and manage the risk appropriately, leading to increased and opportunities and chairs a regular ESG Steering Group, which reports into
scrutiny from stakeholders and investors, resulting in reputational damage. the ESG Committee.
The Group has a dedicated Head of Sustainability and ESG, who has significant
experience in relation to climate change.
The ESG Steering Group is responsible for assessing and managing
climate-related risks and opportunities against KPIs aligned to our ESG
pillars of People, Planet and Product and ensuring all operational matters in
respect of our ESG Strategy are fully embedded into our business strategy and
operation, including an underpin to Group bonus arrangements.
Our key ESG pillars are supported by Working Groups, which include senior
operational managers, with input from external consultants.
The Group undergoes numerous external assessments on climate and
sustainability initiatives
Further information on the financial risks we face and how they are managed is
provided on pages 144 to 153 of the Annual Report and Accounts 2025.
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year that give a true and fair view of the state of affairs of the
Group and the Company as at the end of the financial year, and of the profit
or loss of the Group for the financial year.
Under that law the Directors have elected to prepare the Group Financial
Statements in accordance with UK adopted international accounting standards
and have elected to prepare the Company's Financial Statements in accordance
with United Kingdom Generally Accepted Accounting Practice, including FRS 102
(The Financial Reporting Standard applicable in the United Kingdom and the
Republic of Ireland) and the Companies Act 2006.
Under company law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
for that period.
In preparing the Annual Report and Accounts, the Directors are required to:
- Select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors (or in respect of the
parent company Financial Statements, Section 10 of FRS 102) and then apply
them consistently;
- Make judgements and accounting estimates that are reasonable and prudent;
- Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
- Provide additional disclosures when compliance with the specific
requirements in IFRSs (or in respect of the parent company financial
statements, FRS 102) is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Group's
financial position and financial performance;
- For the Group Financial Statements, state whether International Financial
Reporting Standards in conformity with the requirements of the Companies Act
2006 and UK adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the Financial
Statements;
- For the Parent Company Financial Statements, state whether applicable UK
accounting standards, FRS 102, have been followed, subject to any material
departures disclosed and explained in the Parent Company Financial Statements;
- Prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Group and the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the Financial Statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic report, Directors' report, Directors' Remuneration
Report and Corporate Governance statement that comply with that law and those
regulations. The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Company's website.
Each of the Directors, whose names and functions are listed on pages 162 and
163 of the Annual Report and Accounts 2025, confirms that, to the best of
their knowledge:
- the Group Financial Statements, which have been prepared in accordance with
UK adopted international accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit of the Group;
- the Annual Report and Accounts 2025, including the Strategic Report,
includes a fair review of the development and performance of the business and
the position of the Company and undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face; and
- they consider the Annual Report and Accounts 2025, taken as a whole, is
fair, balanced and understandable and provides the information necessary for
shareholders to assess the Company's position, performance, business model and
strategy.
The Directors of Watches of Switzerland Group PLC are listed in the Group's
Annual Report and Accounts 2025 and on the Group's website: thewosgroupplc.com
(http://thewosgroupplc.com/)
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