Watches of Switzerland’s US Expansion: A Smart Move for Luxury Watch Investors?

Watches of Switzerland’s US Expansion: A Smart Move for Luxury Watch Investors?

Introduction:

The luxury watch market is a realm of timeless elegance and enduring value. As of 2024, the global retail sales of luxury watches reached an estimated £48.0 billion, proving the resilience and enduring appeal of these high-end timepieces. Watches of Switzerland Group (WOSG), a leading international retailer of luxury watches, has been strategically expanding its presence in the United States, the largest global market for Swiss watch exports since 2021. This expansion, marked by significant acquisitions and a focus on key brands like Rolex, presents a compelling narrative for investors seeking opportunities in the luxury sector. But is Watches of Switzerland’s US expansion a smart move for luxury watch investors? Let’s delve into the details.

The Allure of the US Luxury Watch Market:

The United States has emerged as a dominant force in the luxury watch market. In 2024, retail sales of luxury watches in the U.S. reached $8.8 billion. This growth is further underscored by a 12.7% CAGR in Swiss watch exports to the U.S. between 2017 and 2024, coinciding with Watches of Switzerland Group’s entry into the market. The U.S. market is primarily driven by domestic demand, with tourism to destinations like Florida and Las Vegas adding to its vibrancy.

Watches of Switzerland’s Strategic Expansion:

Watches of Switzerland Group has been actively consolidating its position in the U.S. market through strategic acquisitions and expansions. A key move in this direction was the recent acquisition of Deutsch & Deutsch, a family-owned luxury watch and jewelry retailer in Texas.

• Acquisition of Deutsch & Deutsch: In January 2026, Watches of Switzerland Group acquired 88% of Deutsch & Deutsch, adding four luxury watch and jewelry showrooms in Texas to its U.S. portfolio. The deal, valued at $67 million in annual revenue (as of December 31, 2024), includes authorized distribution of renowned brands like Rolex, Cartier, OMEGA, and TUDOR. Following the deal, Watches of Switzerland now operates 25 Rolex-anchored showrooms in the US.
• Focus on Rolex-Anchored Showrooms: Watches of Switzerland’s strategy is heavily focused on Rolex, with a significant portion of their showrooms anchored by the brand. This is a strategic advantage, as Rolex holds a leading position in the U.S. luxury watch market.
• Expansion of Product Portfolio: The acquisition of Deutsch & Deutsch allows Watches of Switzerland to enhance its product mix by introducing additional luxury watch and jewelry brands to the acquired showrooms.
• Acquisition of Roberto Coin Inc.: In May 2024, the Group acquired the exclusive distribution rights for the Roberto Coin brand in the US, Canada, Central America and the Caribbean, through the acquisition of Roberto Coin’s US associated company, Roberto Coin Inc.

Why This Expansion Matters for Investors:

Watches of Switzerland’s US expansion presents several potential benefits for investors:

• Market Leadership: WOSG has around 50% share of all Rolex sales in the UK and 10% share in the US, where it is the leader consolidating the industry.
• Access to a Growing Market: The U.S. luxury watch market is projected to reach $5,785.4 million by 2030, growing at a CAGR of 6.2% from 2024. This growth trajectory provides a favorable backdrop for Watches of Switzerland’s expansion efforts.
• Strong Brand Partnerships: Watches of Switzerland has long-standing partnerships with leading luxury watch brands, including Rolex, Cartier, and Patek Philippe. These partnerships provide a competitive edge and ensure access to high-demand products.
• Diversification: Luxury watches have a weak correlation with the stock market, making them attractive for risk-averse investors seeking diversification.
• Resilient Business Model: The luxury watch industry is underpinned by strong long-term fundamentals, including robust demand, proven value creation, and supply-driven dynamics.
• Growth in Luxury Jewellery: The Group’s strategy is to increase the number of luxury jewellery brands offered within our portfolio, in many cases exclusively within a geographical area.

Potential Risks and Challenges:

While the US expansion offers significant opportunities, investors should be aware of potential risks and challenges:

• Economic Uncertainty: Economic downturns, high inflation, and rising interest rates could dampen consumer spending on luxury goods, impacting Watches of Switzerland’s sales and profitability.
• Tariffs: Potential U.S. tariffs on Swiss watches could increase import costs and affect the company’s profit margins.
• Dependency on Key Brands: Watches of Switzerland relies heavily on its relationships with key brands like Rolex. Any disruption to these partnerships could negatively impact the company’s business.
• Competition: The luxury watch market is competitive, with established players and emerging online platforms vying for market share.
• Tariffs: In 2025, the company warned that its profit margin could fall over the financial year as the luxury watch industry reels from higher U.S. tariffs.

The Investment Angle:

Luxury watches have emerged as a viable alternative investment, offering potential returns and portfolio diversification. Factors such as brand prestige, model rarity, and condition contribute to a watch’s investment potential.

• Brand Recognition: Brands like Rolex, Patek Philippe, and Audemars Piguet have consistently held their value and appreciated over time, making them attractive investment options.
• Limited Supply: The limited supply of certain luxury watch models, particularly those from Rolex, creates a high demand and can drive up prices in the secondary market.
• Pre-Owned Market: The pre-owned luxury watch market is experiencing rapid growth, providing opportunities for investors to buy, sell, and trade vintage and contemporary timepieces.

Conclusion:

Watches of Switzerland’s US expansion appears to be a strategic move that aligns with the growth trends in the luxury watch market. The company’s focus on Rolex-anchored showrooms, strategic acquisitions, and expansion of its product portfolio position it well to capitalize on the increasing demand for luxury timepieces in the United States. For investors, this expansion presents an opportunity to gain exposure to a resilient and growing market segment. However, it’s crucial to consider the potential risks and challenges, including economic uncertainty, tariffs, and competition, before making any investment decisions. By carefully weighing the opportunities and risks, investors can determine whether Watches of Switzerland’s US expansion is a smart move for their portfolio.