The FTSE 250 retailer reported a 13 per cent jump in group revenue for the year to May 2026, according to results published on 14 May. US retail revenue surged 25 per cent to £927m, while UK revenue rose five per cent to £901m, as reported by City AM. The crossover point, where American sales eclipsed British ones, marks a structural shift for a company founded on Ludgate Hill in 1924.

For UK operators watching luxury peers stumble on geopolitical disruption and weak consumer confidence, the results offer a case study in disciplined international expansion, and a reminder that domestic origin need not mean domestic dependence.

How the US became the bigger half

Watches of Switzerland entered the US market around 2017 to 2018. Eight years later, American operations generate more than half of group revenue. Chief executive Brian Duffy described the milestone as significant.

"A major milestone in the world's largest and fastest growing luxury watch market, achieved in just over eight years from entering the US."

The company's US retail division delivered 25 per cent like-for-like growth, according to the results. Revenue at Roberto Coin, the Italian luxury jeweller owned by the group, rose 22 per cent in the same period.

The speed of the build-out is notable. US revenue of £927m now exceeds UK revenue of £901m by £26m. That gap is likely to widen: the company describes the US as the world's largest and fastest-growing luxury watch market, a claim supported by the sustained double-digit growth rates it has reported there over successive years.

The trajectory was not smooth. Shares in Watches of Switzerland slumped over the past 18 months amid volatility linked to erratic US tariff policy, as reported by City AM. The stock's recovery alongside record revenue suggests that operational execution ultimately outweighed macro noise.

UK resilience in a weak consumer market

UK consumer confidence fell to a two-year low during the reporting period, according to the company's commentary. Despite that backdrop, domestic revenue still grew five per cent to £901m.

Duffy said performance had improved in the UK despite what he called a "challenging macroeconomic backdrop", citing "resilient demand for luxury watches and jewellery."

The result is worth examining in context. Other UK-facing consumer businesses have reported flat or declining sales over the same period, squeezed by inflation-weary shoppers and cautious discretionary spending. Watches of Switzerland's domestic resilience suggests that the ultra-premium end of the market, where average transaction values are high and purchase frequency is low, behaves differently from mainstream retail.

That distinction matters for operators considering where to position within the consumer spending spectrum. Luxury watch buyers tend to be less sensitive to short-term confidence surveys than grocery or fashion shoppers. The product itself, a Rolex, a Patek Philippe, an Omega, functions partly as a store of value, which can sustain demand even when broader sentiment weakens.

Acquisition strategy and the debt trade-off

The company recently completed its acquisition of Deutsch & Deutsch, a Texas-based luxury jeweller with four US locations. The deal has generated £16m in revenue since completion, according to the results. The stores primarily trade in Rolex watches.

The acquisition pushed net debt to £57m, a figure that remains modest relative to group revenue of £1.8bn. Net debt at that level represents roughly 3.2 per cent of annual revenue, giving the company considerable headroom for further deals without straining the balance sheet.

The Deutsch & Deutsch transaction fits a pattern. Rather than building new showrooms from scratch in unfamiliar US cities, Watches of Switzerland has acquired established local operators with existing brand relationships, particularly with Rolex, whose authorised dealer network is tightly controlled. Buying an existing authorised dealer is often the only practical route to securing allocation of the most sought-after references.

For finance directors and board members weighing international expansion, the approach illustrates a middle path between organic growth, which is slow, and large-scale M&A, which carries integration risk. Small, targeted acquisitions in a single geography allow a company to scale without betting the balance sheet.

What luxury peers are getting wrong

The contrast with Europe's luxury conglomerates is stark. Last month, the owners of brands including Gucci, Louis Vuitton, and Birkin reported revenue declines linked to falling tourism caused by the Iran conflict, as reported by City AM. LVMH, Kering, and Hermès all saw the geopolitical disruption hit their top lines.

Watches of Switzerland said it has minimal exposure to tourist consumers and to the Middle East market. That insulation is partly structural: its stores are located in domestic shopping destinations rather than tourist-heavy flagship strips, and its customer base skews towards local buyers making considered purchases rather than tourists making impulse ones.

The divergence highlights a vulnerability in the business models of larger luxury groups. Tourism-dependent revenue is inherently fragile. It relies on geopolitical stability, visa regimes, airline capacity, and currency movements, none of which a retailer can control. A domestic-focused customer base is less volatile, even if it offers lower peak upside during boom years for international travel.

That is not to say Watches of Switzerland is immune to external shocks. Its heavy US weighting exposes it to dollar-sterling exchange rate movements, and the tariff volatility of the past 18 months demonstrated that policy risk in Washington can hit share prices hard. But the underlying revenue growth suggests the business model is more resilient than the share price implied during the tariff-driven sell-off.

The eight-year blueprint

Watches of Switzerland's trajectory from a UK-centric retailer to a transatlantic operation with its centre of gravity in the US offers a replicable framework, at least in outline. Enter a large, growing market early. Acquire established operators rather than building from zero. Keep net debt low enough to absorb deal costs without distress. And focus on domestic customers rather than chasing tourist footfall.

The execution is specific to luxury watches, a category with unusually high barriers to entry, controlled distribution, and resilient demand. Not every sector offers those conditions. But the strategic logic, geographic diversification as a hedge against domestic weakness, applies broadly.

With £927m in US revenue and £901m in the UK, the company now operates two roughly equal pillars. If US growth continues at anything close to its current pace, the balance will tilt further. The question for the board is whether to keep pushing into the US or to open a third front elsewhere.

For now, the numbers speak clearly enough. A UK retailer that entered the American market eight years ago has turned it into the bigger half of the business, posted record revenue, and kept net debt below £60m. In a period when luxury peers are nursing tourism-related losses, that counts as a strong position.