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RNS Number : 5311E Watches of Switzerland Group PLC 08 July 2021 Watches of Switzerland Group PLC Long Range Plan for the five - year period FY22 to FY26 Accelerate strategy by strengthening UK luxury watch leadership , becoming US market leader and entering the EU market Watches of Switzerland Group PLC ( " the Group " ) is today pleased to announce its long term plan covering its strategy for the five - year period from FY22 to FY26 . Brian Duffy , Chief Executive Officer , said : " Since 2014 we have delivered a sustained track record of strong , profitable growth , consolidating our position as the UK's leading luxury watch retailer . We have further developed our long - standing partnerships with the most prestigious luxury watch brands , invested in our stores and in leading edge systems and technology while further enhancing our bold , impactful and digital - led marketing approach . Through focused investment we have built a modern , digitally advanced multi - channel retailer and have achieved outstanding momentum in the US since our entry into the market in late 2017 . Looking ahead , we are excited to capitalise on the significant opportunity to accelerate our strategy . TheJK luxury watch market continues to grow , and we continue to advance our leading position . In addition , we plan to achieve growth through further geographical diversification , becoming the clear leader in the US market , and establishing a presence in the EU with the targeted roll - out of our proven model . Our growth projections reflect our best estimate of future supply based on our past experience of investment and expansion . The ability to grow in our category is partly determined by restricted supply of key brands and is therefore not guaranteed . " Strong Foundation for Future Growth The Group has been significantly transformed since 2014 : § The arrival of new management in 2014 led to the investment in systems and digital marketing to create a technologically advanced multi - channel luxury specialist with a modern approach to retailing § Consistent , sustained growth has expanded our clear market leadership in luxury watches in the JK § Entrance into the US market in 2017 with a strong and growing base established § FY21 Group revenue of £ 905.1 million is well balanced and geographically diversified with 67.0 % UK , 33.0 % US As the UK's largest luxury watch retailer , operating in both the UK and US , today we have a unique platform : § What we sell : luxury watches account for 87.1 % of Group revenue , within which the top eight brands represent 81.9 % of Group revenue § How we sell : competitive advantages of longstanding brand partnerships , scalable technology , marketing , well - invested showrooms and exceptional customer service Our consistent track record of profitable growth underlines the success of our strategy : § Revenue CAGR FY15 to FY22¹ ] + 16.2 % § EBIT CAGR FY15 to FY22 + 40.2 % as we leveraged sales growth on our cost base § Strong cash generation with net debt reduction to £ 43.9m ( 2 May 2021 ) § Significant improvement in ROCE to 19.7 % in FY21 ( FY15 : 6.7 % ) Long Range Plan Highlights Our strategy for growth to FY26 is focused on the major Western markets of the UK , US and EU : § Total Addressable Market for luxury watches ( at retail ) in these markets is approximately $ 21.0 billion § UK market has the highest per capita retail spend by domestic customers on luxury watches ; we believe the differential to other markets reflects retail investment , not customer behaviour , creating an opportunity to successfully replicate our model in other geographies and building on the success we have delivered in the US to date Targeted capital investment to support growth plans over the next five years : § Cumulative indicative range of capex spend : £ 300.0 million to £ 340.0 million § Cumulative indicative potential acquisition spend in the US and EU : £ 150.0 million to £ 200.0 million UK - Continuing to outperform in the strongest market for luxury watches globally The UK luxury watch market has a well invested network of retail stores and retail sales of approximately £ 1.3 billion Between 2012 and 2019 , the market grew by a CAGR of +10.0 % , mainly driven by average selling price increases Future expected growth ( 2020 to 2026E ) : we expect the market will continue to grow at a strong rate with a CAGR of + 8.0 % to + 10.0 % , with a post COVID - 19 pandemic recovery in 2021 The Group expects to outperform the market by c . 2.0 % p.a. driven by continued investment in stores , technology , digital marketing and customer experience US - Becoming the clear leader in the second largest market for luxury watches globally The US market for luxury watches is fragmented and under - invested with retail sales of approximately $ 4.5bn Between 2012 and 2019 , the market grew by a CAGR of + 2.0 % , with most growth achieved since 2018 Looking ahead , we believe the US will outperform the global market driven by continued investment in retail from the Group and other participants The Group anticipates its US revenue will grow by a CAGR of + 25.0 % to +30.0 % ( FY21 to FY26 ) supported by : § A strong pipeline of new projects including one Watches of Switzerland store in American Dream , New Jersey and one Watches of Switzerland store in Kenwood Towne Centre , Cincinnati § Acquisitions § Digital marketing becoming increasingly effective with greater scale § Ecommerce : over time we believe this channel will become as important to our US business as in thek § Further expansion of the mono - brand boutique network Page 1 of 3