America's Obsession with Luxury Watches Is Rewriting the Books at Watches of Switzerland
There has never been a better time to sell a Rolex in America, and no one is cashing in on that reality harder than Watches of Switzerland. The British-headquartered luxury retailer released its fiscal year 2026 results this week to a market already buzzing from a Reuters report suggesting the company was quietly entertaining offers to go private — and the numbers it dropped made the takeover chatter all the more compelling. Record revenue. Record profit. A United States business that now drives more than half of everything the company earns. And a CEO who, when pressed about the acquisition talk on an earnings call, had exactly nothing to say.
The silence was deliberate, the results were anything but quiet.
The Numbers That Moved the Needle
Revenue rose 11 percent to £1.83 billion in the 53 weeks to May 3, 2026, while statutory pre-tax profit jumped 76 percent to £133.5 million. That kind of profit acceleration, nearly doubling year-over-year, is the sort of figure that turns heads in boardrooms far beyond the watch industry. But the headline grabber was what happened on this side of the Atlantic.
Watches of Switzerland views the U.S. market as a "major opportunity" for growth and market share gains. For fiscal year 2026 ended May 3, the watch and jewelry retailer reported that U.S. sales increased 18 percent year-over-year — 24 percent in constant currency terms — from £786 million to £927 million ($1.25 billion). That figure represents a business that has gone from a promising transatlantic experiment to the undisputed engine of one of the world's most formidable luxury retail empires.
The U.S. market now accounts for more than 50 percent of group sales, marking significant growth since the company's U.S. entry eight years ago. Eight years. That is a remarkably short window to build a market-dominant position in American luxury retail, a landscape littered with the wreckage of European brands that never figured out the country's particular combination of wealth and taste.
Breaking Down the U.S. Revenue Stack
The U.S. figure includes £811 million ($1.1 billion) in sales at Watches of Switzerland's U.S. retail stores — up from £681 million ($915 million) in fiscal year 2025 — plus £126 million ($169 million) in Roberto Coin wholesale revenue, up from £110 million ($148 million) last year. The Roberto Coin component of that equation is worth dwelling on. Watches of Switzerland acquired the U.S. division of Roberto Coin in 2024 for $130 million, and the deal gave the retailer exclusive distribution rights for Roberto Coin jewelry in the United States, Canada, the Caribbean, and Central America. In the span of two fiscal years, that bet has proven decisive, adding a high-margin jewelry revenue stream that diversifies the company away from its singular dependence on Swiss timepieces.
Luxury watch sales increased 10 percent to £1.5 billion ($2 billion), while luxury jewelry sales grew 14 percent to £240 million ($320.7 million). The jewelry segment's faster growth rate is no accident — it reflects a deliberate strategic pivot that management began telegraphing to investors years ago, betting that American consumers who walk in for a Rolex will leave with a Roberto Coin bracelet on their wrist as well.
Profitability and Cash Generation
Adjusted EBIT increased 3 percent — 6 percent in constant currency terms — and operating profit jumped 49 percent. The gap between the modest EBIT growth and the explosive operating profit expansion tells a story about how the company is managing its cost base. Meanwhile, free cash flow increased 65 percent to £162 million, enabling the group to reduce net debt despite investing in new stores and acquisitions. That cash generation discipline has tangible balance sheet consequences: the company's net debt shrank from £96 million ($129 million) to £57 million ($77 million). A business generating that kind of cash while simultaneously expanding its physical footprint and integrating acquisitions is demonstrating an operational maturity that the market has arguably been slow to recognize — which may be exactly why the CEO has been willing to hear out private equity.
The Reuters Bombshell and the CEO's Silence
The financial results did not arrive in a vacuum. Watches of Switzerland reported its fiscal year 2026 results on Tuesday morning, one day after Reuters published a report claiming the retailer has been courting offers from private equity firms and other bidders to buy the company and take it private. The timing was combustible. Watches of Switzerland shares jumped as much as 8.2 percent to 778.5 pence, the highest since May 2023, after the Reuters report.
According to Reuters, citing three people close to the matter, London-listed Watches of Switzerland Group has held talks in recent months over potential offers to take the luxury watch retailer private. Shares in the FTSE 250 company have rallied by 55 percent to about £7.20 this year on strong demand for high-end timepieces from the likes of Rolex and Cartier. Despite that rally, the stock has a long way to climb before it reaches its former heights. The shares remain at less than half their 2022 peak, reflecting a European luxury sales slowdown in recent years.
No formal offer has been made, Reuters said, describing the possible buyers as "private equity funds and strategic bidders." Duffy agreed to the talks because he believed the London-listed company was undervalued in the marketplace, according to the Reuters story. That is an unusual posture for a sitting CEO — publicly (or semi-publicly) signaling that he thinks his own company's market cap is selling the business short. But given the circumstances, his logic is not hard to follow.
One source said the retailer would be looking for a price significantly above £7.50 per share, reflecting management's view that the business remains undervalued at its current stock market price. Watches of Switzerland Group's shares have risen around 55 percent this year, reaching £7.20 last week before spiking at over £7.60 following Reuters' report. Today's price of £7.50 values the company at £1.75 billion.
On the earnings call, when analysts attempted to get Duffy to address the elephant in the room, Duffy declined to comment on the report on the company's earnings call Tuesday morning. The company's official posture was equally tight-lipped: Watches of Switzerland said it does not comment on rumours or speculation. In the language of corporate communications, that is as close to a non-denial denial as a publicly traded company can issue without triggering a regulatory disclosure obligation.
Why the Shares Were Beaten Down in the First Place
To understand why private equity might be circling, and why Duffy himself thinks the public markets are underpricing his company, it helps to understand the origin story of the discount. Watches of Switzerland's shares sank in 2023 after major supplier Rolex acquired Swiss-based retailer Bucherer, which some analysts saw as a threat to the watchmaker's relationship with Watches of Switzerland. The fear was primal and straightforward: what happens to the world's most important authorized Rolex dealer when Rolex decides to get into the retail business itself?
Its stock still trades at less than half the record highs reached in 2022 when investors viewed Watches of Switzerland Group as a proxy bet on the privately-held Rolex during a period of unprecedented demand, multi-year waiting lists and eye-watering prices on the secondary market. In other words, the market priced the stock as if the Bucherer acquisition was the beginning of a vertical integration strategy that would eventually squeeze out third-party retailers. The actual results of the past three years suggest that fear was, at minimum, overstated.
A private sale of the business would continue this year's migration of UK companies from the London Stock Exchange after a flurry of foreign takeovers. That broader trend of London-listed companies going private or being absorbed by overseas acquirers provides useful context — Watches of Switzerland would not be an anomaly but a participant in a well-established pattern of the London market losing assets to buyers who see more value than the exchange's pricing suggests.
A Retail Footprint Built for the Long Game
The financial results carry more weight when you understand the physical infrastructure generating them. As of May 3, Watches of Switzerland had 191 stores in the U.K. and U.S., including 81 monobrand boutiques operated in partnership with Rolex, Omega, TAG Heuer, Breitling, Tudor, Longines, Grand Seiko, Roberto Coin, Bulgari, and Fope. That monobrand boutique model is critical to understanding how the company has deepened its brand partnerships rather than seen them erode.
In addition to Watches of Switzerland stores, the company has Mayors, Betteridge, and Deutsch & Deutsch stores in the U.S., and owns the e-commerce site Analog:Shift as well as the watch news platform Hodinkee. Deutsch & Deutsch is an independent jeweler with four stores in Texas. The Hodinkee acquisition deserves particular attention from anyone who follows the watch world. On October 3, 2024, the company acquired the editorial, insurance and limited-edition business from Hodinkee, the pre-eminent global digital editorial content provider and gateway for luxury watch enthusiasts. Owning the media platform that serious collectors read before they go shopping is a distribution strategy that goes far beyond putting watches in cases. It is content-driven retail at a level most luxury brands are only beginning to conceptualize.
Expanding Across America, Store by Store
The company has not been content to let its existing portfolio generate returns — it has been aggressively expanding and refurbishing. In October 2025, the company opened a new Watches of Switzerland in Southdale, Minneapolis, and work is progressing on the refurbishment of Betteridge Greenwich, Connecticut, due to open in Autumn 2026. A refurbished Mayors multi-brand showroom also opened in Lenox, Atlanta, following the opening of the standalone Rolex boutique there in the prior fiscal year, and the company relocated its Mayors showroom in University Town Center, Sarasota, Florida.
On January 22, 2026, the Group completed the acquisition of a majority stake in Deutsch & Deutsch, which comprised four showrooms. The business includes four Rolex agencies in Texas and delivered revenue of £16.4 million in the period since acquisition. Texas — a state with concentrated wealth, a cultural affinity for luxury goods, and a growing tech-sector upper class — represents exactly the kind of market where a premium watch and jewelry retailer can build lasting volume. Watches of Switzerland signed an agreement to acquire an 88 percent stake in the retailer earlier this year, and the integration is already moving. During the year, Watches of Switzerland expanded its U.S. footprint through the acquisition of Deutsch & Deutsch, continued investing in Rolex Certified Pre-Owned, and opened new Roberto Coin boutiques.
The efficiency differential between the U.S. and U.K. store networks is striking. Over the 12 months to the end of May, U.S. sales rose 24 percent in constant currency — 18 percent reported — and now account for half of the company's total revenue. The 137 showrooms in the U.K. generate around the same revenue as just 59 locations in the U.S. That productivity gap illustrates why the U.S. is not merely a growing market but the most capital-efficient market in the company's portfolio by a wide margin.
Navigating Tariffs Without Breaking a Sweat
Any story about luxury Swiss goods sold in America in 2025 and 2026 cannot avoid the tariff question. The company's handling of that challenge has been one of the more impressive aspects of its recent performance. While the U.S. threatened to impose goods from Switzerland with 39 percent tariffs, a mid-November trade deal cut that to 15 percent.
Softening the blow of tariff announcements was Watches of Switzerland's stockpile of inventory from brand partners, which helped to protect it from any levy fallout. That inventory buffer — built through the company's deep, long-standing relationships with the Swiss watch houses — proved to be a strategic moat that smaller or less-connected retailers simply could not replicate. The company said it welcomes the reduced levies, but saw no significant change in consumer behavior following the introduction of the initial tariffs. The American luxury consumer, it turns out, does not stop buying a £20,000 watch because of a few percentage points of tariff exposure. The product is aspirational and often scarce — the usual laws of price elasticity are suspended.
CEO Brian Duffy addressed the macro complexity directly in the company's earnings statement. "FY26 was a year of strong execution against a complex operating backdrop," Duffy said, noting tariffs as well as the "continued pressure" on consumers in the U.K. "This performance is testament to the agility of our business model, our strong relationships with brands and the strength of our teams, who have executed well."
The U.K. Business: Disciplined Contraction in Service of Productivity
While the American operation surged, the U.K. story was more measured — though not without its own strategic logic. U.K. sales increased 5 percent year-over-year in both reported and constant currency terms, reaching £901 million ($1.21 billion). That modest growth came as the company was actively trimming its U.K. store portfolio. 21 U.K. non-core showrooms were closed in the year, 10 in the first half with the balance towards the end of the year. This was in addition to the 14 closed in the prior fiscal year, which allowed the company to consolidate its portfolio and drive productivity across its U.K. estate.
This is not retreat — it is the strategic pruning of underperformers in favor of flagship investment. Nine projects were completed in the U.K., enhancing existing showrooms to further elevate the partner brands on display and advance the client experience. These included the company's first-ever Rolex agency on Blackett Street, Newcastle, and a rebranding of its Watches of Switzerland showroom in Birmingham to Mappin & Webb. The simultaneous closing of weak locations and investment in premium repositioning of strong ones is exactly the playbook a brand-savvy retailer should be running in a softer consumer environment.
The company also completed a full European exit. The two remaining European showrooms were divested to brand partners during the period, and the Group is no longer trading in Europe. That clean withdrawal concentrates the entire enterprise on its two core English-speaking markets, simplifying the operating structure and removing any distraction from the U.S. growth story.
What the Future Holds — Sale or No Sale
The company's guidance for fiscal year 2027 remained unchanged from what it provided when it reported its fourth-quarter results — revenue growth of 5 to 10 percent on a constant currency basis. That guidance range, while conservative-sounding after an 18 percent U.S. spike, reflects genuine uncertainty about the pace of supply from key Swiss brand partners, the trajectory of tariff policy, and whether the U.K. consumer recovery sustains itself. The company is monitoring geopolitical risks with limited exposure to the Middle East and tourist consumers.
The company noted that it does "minimal" business in the Middle East or with tourist consumers, both segments that are struggling right now. That insulation from the weaker parts of the global luxury market is a meaningful structural advantage. Rivals with heavy dependence on Chinese tourists shopping in Europe or Gulf state clientele are facing genuine headwinds. Watches of Switzerland is primarily selling to well-heeled American residents who walk into a store in Houston or Minneapolis because they want something that will outlast their retirement portfolio.
The CEO stated: "The U.S. represents a major opportunity, with considerable potential for further growth and market share gains." That is not boilerplate optimism. It is the statement of a man who has watched a market generate £927 million in a single fiscal year and can see the arithmetic of what happens when he opens more doors in more American cities.
Watches of Switzerland, a London-listed FTSE 250 retailer that sells brands like Rolex and Cartier, makes about half its sales in the U.K. and half in the U.S. But its share price has been pressured by slower luxury spending in Europe and lingering worry that Rolex's purchase of rival Bucherer could reshape the supplier relationship that underpins its business. Those concerns have not gone away. They form the structural discount that is simultaneously frustrating Duffy and attracting private equity interest. A business generating this kind of American momentum, with a cleaned-up balance sheet and a strengthening jewelry revenue stream, looks very different to a buyer who doesn't have to manage quarterly earnings expectations.
Stronger U.S. trends or steadier margins make it easier for private equity or an industry buyer to justify paying up, while any sign of weaker demand or supplier risk can lower perceived deal odds and pull the shares back toward a stand-alone valuation. The fiscal year 2026 results, landing the morning after the Reuters report, could hardly have been timed more perfectly to make the bull case. Whether a deal materializes or not, Watches of Switzerland has demonstrated something that the luxury industry rarely manages convincingly: that a British company can crack the American market not as an afterthought, but as its primary reason for existing.
As Duffy put it in his full-year statement: "We see a substantial runway for long-term growth, in both revenue and profit. The U.S. represents a major opportunity, with considerable potential for further growth and market share gains." The man knows his numbers. And right now, his numbers are very good.
