Watches of Switzerland's shares sink on outlook
Shares of Watches of Switzerland tumbled to more than a three-year low after the retailer cut its FY 2024 revenue outlook. IGTV's @AngelineOng looks at what’s behind the weakness of the seller of brands like Rolex and Cartier.
(Video Transcript Summary)
Watch firm battles cost-of-living crisis
Watches of Switzerland, a luxury watch seller in London, has seen a big drop in its stock price, falling more than 30%. This happened after the company changed its revenue estimate for the year. They expect to earn between £1.53 billion and £1.55 billion in 2024, which is a lot less than they had hoped for.
It's not just Watches of Switzerland that's having a tough time, though. Other luxury goods companies like LVMH Moet Hennessy Louis Vuitton and Burberry are also struggling because people aren't buying as many fancy items due to the cost-of-living crisis.
Can China help them recover?
It's not just in the UK either - this crisis is affecting other countries, too. This is a big problem for companies like Watches of Switzerland because they rely on people wanting to buy their watches.
The situation is even more complicated because the crisis is happening all over the world. So, if things don't get better and people still can't afford to spend a lot of money, companies like Watches of Switzerland will have a tough time in the coming year.
Inflation also hitting hard
It's not just the cost-of-living crisis that needs to be fixed - inflation also needs to calm down. On top of all this, luxury goods companies are hoping that people in countries like China will start buying more fancy things to help them recover.
It is hard to say what will happen in the future because everything depends on fixing the cost-of-living crisis, inflation and getting people in China to buy more luxury items.
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