London could become biggest growth market for Monobrand watch stores, says Savills

13 September 2016

London could become the priority target for luxury watch retailers seeking to open their own ‘monobrand’ stores as the city’s growth potential exceeds other key global markets, according to new research by Savills. 

The firm examined the presence of 45 luxury watch brands with their own boutiques in 11 key gateway cities to create a supply ranking (Figure 1).  The analysis revealed that Singapore is the top global market with 37 brands present, followed by Paris with 33 and Hong Kong with 30.  By contrast, London and New York ranked joint lowest with just 22 luxury watch monobrand stores in each.  However, London’s growing tourist numbers and affluence profile is making it increasingly attractive to luxury watch brands, according to Savills, with 11 opening their first monobrand store in the city since 2010 and another six expected to open before the end of 2016. 

The firm states that cheaper visas for Chinese nationals could help increase visitor spend in the capital which, combined with an exchange rate that is currently favourable to international visitors, will further boost London’s appeal to luxury watch brands.  This is backed up by recent West End sales data: luxury retailers reported a 13% increase in sales in June 2016 compared to same month in 2015 despite sales across the area being down by -5.9% overall. 

Paris and Geneva are the top European markets for luxury watch boutiques with 33 and 24 respectively.  Many brands originated from Switzerland and, to a lesser extent, France so have always had a presence there.  However, when considering the top 10 global markets for Swiss watch exports, Savills states that the UK was one of only two countries to report an increase in the value of exports in July 2016 compared to July 2015 (+13.5%), partly boosted by the weaker pound in the wake of the EU referendum.  This was followed by Italy which saw a 9.9% increase in July 2016 compared to July 2015.  There are currently nine brands with monobrand stores in Paris but not yet in London, which could now be looking across the Channel for potential growth, says Savills.  

Click here to see luxury watch brand presence in key global cities (Fig 1)

Marie Hickey, commercial research director at Savills, comments: “The growth in luxury watch boutiques over the last 10 years has focused on Asia Pacific markets due to strengthening demand and cheaper property costs.  By contrast, the high cost of opening a monobrand store in London and New York has seen many brands take space in department stores or specialist watch stores instead, explaining why the number of boutiques in these cities is so much lower.  However, the preference for Chinese tourists to acquire luxury purchases overseas could result in some luxury watch brands refocusing their attention on more established markets and driving significant growth, albeit off a low base, in the case of both London and New York.”  

Anthony Selwyn, head of Central London retail at Savills, adds: “Growth in the watch industry has been phenomenal in the last five years, however it is important to categorise the brands as they can differ dramatically in both cost and clientele.  Central London will continue to be a sought after location and we foresee more  brands entering the market.  With the smaller  size of stores normally taken by watch brands, this will allow for competitive rents to be maintained .”

 
 

General Enquiries

Savills Margaret Street

 

Key Contacts

Anthony Selwyn

Anthony Selwyn

Director
Central London Retail

Savills Margaret Street

+44 (0) 20 7758 3880

 

Marie Hickey

Marie Hickey

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 3320 8288