(Bloomberg) -- The UK’s leading Rolex dealer, Watches of Switzerland Group Plc, will relocate its flagship store to a much larger London location, underscoring its faith in strong demand for the storied Swiss brand.
Watches of Switzerland will move its current Rolex Boutique in London from a 900 square-feet (84 square meters) location on Bond Street to a new 7,200 square-feet space on nearby Old Bond Street in 2023, the company said in its first-quarter trading update Tuesday.
The new store won’t be the world’s largest Rolex boutique, however. That title goes to the Rolex megastore in a Dubai mall that occupies 850 square meters of retail space or almost 10,000 square feet.
Shares rose as much as 7% in early trading before paring gains.
Demand for Rolex watches surged during the pandemic partly due to cheap credit, while many wealthy people saw the value of their assets rise and sought ways to spend their cash. Most Rolex models fetch prices above retail on the secondary market and with demand outstripping supply, authorized dealers have had to resort to months or even years-long client waiting lists.
While secondary market prices for the most coveted models, including the Daytona chronograph, have started to decline in recent months amid the collapse in cryptocurrencies and plunging stock markets, most models still fetch valuations well above retail.
Watches of Switzerland’s decision to relocate to a London store eight-times the size of its current boutique shows the company doesn’t expect demand for the 117-year-old brand, founded by Hans Wilsdorf, to decline significantly.
“This new flagship will reflect the importance of the London market and the special relevance of London to the history of Rolex,” Brian Duffy, Watches of Switzerland’s chief executive officer, said in a statement.
After founding Rolex in the UK in 1905, Wilsdorf moved the company to Geneva, Switzerland after the First World War.
Duffy told analysts and investors on a conference call that the company is making the “significant investment” in the new location alongside “discussions about supply,” suggesting the company will need to secure more inventory from Rolex.
(Updates with comparison to Dubai store in third paragraph and CEO supply comment in last paragraph)
©2022 Bloomberg L.P.