A BUSINESS BUILT ON
DELIVERING EXCELLENCE
ANNUAL REPORT AND ACCOUNTS 2026
THEWOSGROUPPLC.COM
Our Values shape our culture and behaviour, driving performance and purposeful action.
They are the cornerstone of our Code of Ethics and truly represent who we are.
OUR VALUES
Read more page 84
The Watches of Switzerland Group is an international retailer of world leading luxury
watch brands, complemented by a strong luxury jewellery offering.
The Watches of Switzerland Group provides clients with the finest selection of luxury
timepieces from all the major groups and independent brands together with an impressive
presentation of smaller independent brands. Our showrooms are in prominent, high-profile
shopping areas within the US and UK.
ABOUT US
Our Purpose is to WOW our clients while caring for our colleagues,
our communities and our planet.
Our Purpose is an inextricable part of how we do business. Our sustainability pillars
of People, Planet and Product are considered in our decision-making processes, at every
level of our business.
OUR PURPOSE
OUR WATCH BRAND PARTNERSHIPS
WE EARN TRUST
& CONFIDENCE
WE CARE FOR OUR
COMMUNITIES
WE TREAT EVERYONE
WITH RESPECT
WE PROTECT
OUR PLANET
WE DO THE RIGHT
THING, ALWAYS
WE ADVOCATE FOR
OUR INDUSTRY
STRATEGIC REPORT
02 At a Glance
03 Financial Highlights
04 Chair’s Statement
06 Chief Executive Officer’s Review
10 Market Review
24 Our Business Model
27 Our Brand Partnerships
34 Our Strategy
58 Strategy in Action
64 Key Performance Indicators
69 Financial Review
75 Non-Financial and Sustainability
Information Statement
76 Section 172(1) Statement
80 Environmental, Social and Governance
138 Risk Management
142 Principal Risks and Uncertainties
148 Going Concern and Viability Statement
CORPORATE GOVERNANCE REPORT
152 Corporate Governance at a Glance
154 Chair’s Introduction
156 Board of Directors
158 Corporate Governance Statement
171 Board Performance Review
172 Nomination Committee Report
175 Audit & Risk Committee Report
181 ESG Committee Report
184 Remuneration Committee Report
189 Directors’ Remuneration Report
198 Directors’ Report
FINANCIAL STATEMENTS
204 Independent Auditor’s Report
210 Consolidated Income Statement
211 Consolidated Statement
of ComprehensiveIncome
212 Consolidated Balance Sheet
213 Consolidated Statement of Changes inEquity
214 Consolidated Statement of Cash Flows
215 Notes to the Consolidated Financial Statements
255 Company Balance Sheet
256 Company Statement of Changes in Equity
257 Notes to the Company Financial Statements
261 Glossary
266 Shareholder Information
1
126
UK SHOWROOMS
AT 3 MAY 2026
191
TOTAL SHOWROOMS
AT 3 MAY 2026
65
US SHOWROOMS
AT 3 MAY 2026
2,942
NUMBER OF COLLEAGUES
AT 3 MAY 2026
WELL-INVESTED SHOWROOM NETWORK
TRAVEL RETAILONLINE
AT A GLANCE
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
2
US
UK and
Europe
49%51%
Services/other
Luxury
jewellery
2
Luxury
watches
2
82%
13%
5%
0
200
400
600
800
1,000
1,200
1,400
1,600
£m
FY17FY16 FY19FY18 FY20 FY21 FY22 FY23 FY24 FY25 FY26
CAGR 15%
Growth in sales 301%
1,828
1,652
1,238
1,5381,543
905
811
774
687
568
456
0
30
60
90
120
150
180
0%
2%
4%
6%
8%
10%
12%
FY17F Y16 FY19FY18 FY20 F Y21
Adjusted EBIT
Adjusted EBIT margin %
1
FY22 FY23 FY24 FY25 FY26
£m
Growth in
Adjusted EBIT
760%
135
155
150
130
165
78
56
45
43
34
18
HISTORICAL SALES PERFORMANCE
SALES BY CATEGORY (%)
PROFITABILITY
FINANCIAL HIGHLIGHTS
1 This is an Alternative Performance Measure. Refer to the Glossary on pages 261 to 265 for definition and reconciliation to statutory measures where relevant.
2 Please refer to the Glossary on pages 261 to 265 for a definition.
REVENUE RETURN ON CAPITAL EMPLOYED
1
£1,828m
CHANGE VS LY:
+11%
18.0%
CHANGE VS LY:
−10 0bps
ADJUSTED EBIT
1
PROFIT BEFORE TAX
£155m
CHANGE VS LY:
+3%
£133m
CHANGE VS LY:
+76%
SALES BY REGION (%)
CONSTANT CURRENCY1:
+13%
CONSTANT CURRENCY
1
:
+6%
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
3
IAN CARTER
CHAIR
DELIVERING PROGRESS,
BUILDING FOR THE FUTURE
CHAIR’S STATEMENT
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
4
I am pleased to present my Chair’s Statement for FY26, a year in which
theGroup made further progress against its strategy and delivered a strong
performance across the business and record Group revenue.
The Group delivered results ahead of expectations, reflecting the underlying
strength of our business, the quality of our brand relationships and our continued
focus on operating the business well. Trading momentum strengthened as the year
progressed, leaving the business well positioned as we look ahead to FY27.
This was achieved against a challenging and, at times, volatile external backdrop.
Theyear unfolded amid ongoing geopolitical uncertainty and persistent inflationary
pressures, while in the US the introduction of higher tariffs on Swiss watch imports
had a significant impact on the luxury watch market. At their peak, these tariffs led
to price increases from brands and, in some cases, changes to retailer margin
arrangements, which largely remained in place even as tariff levels subsequently
moderated. We are cognisant of the ongoing macroeconomic uncertainty in the
Middle East but feel well placed to execute what is within our control.
Our US business delivered a strong performance, supported by strong organic
growth, continued investment in our showroom estate and the contribution from
recent acquisitions. In the UK, trading improved during the year, supported by
selective investment and the strength of our portfolio of brands and disciplined
management of the showroom estate. Across the Group, our focus on delivering
a high-quality client experience remained a clear priority.
A significant strategic milestone during the year was the acquisition of a majority
stake in Deutsch & Deutsch, a family-owned luxury watch and jewellery retailer
operating four showrooms in Texas. This acquisition was an excellent strategic fit
for the Group, strengthening our presence in attractive US markets and further
developing our long-standing partnerships with luxury watch brands. We are
pleased to welcome our new colleagues and to continue working with the
existingleadership team to build on the strong foundations of the business.
We continued to invest in our showroom portfolio through new openings,
relocations and refurbishments, ensuring our retail environments remain of the
highest standard. Our pipeline of future projects remains compelling and supports
our confidence in the Group’s long-term growth prospects.
Our jewellery strategy continued to make good progress during the year.
Wholesale trading at Roberto Coin Inc. was encouraging, and we continue to see
opportunities to develop the brand further across North America. In the UK, the
opening of the Mappin & Webb Luxury Jewellery boutique in Manchester marked
our first dedicated jewellery-only showroom, reflecting our confidence in the
long-term opportunity within this category.
Pre-owned watches remained an important area of growth in FY26.
Thecontinued roll-out of the Rolex Certified Pre-Owned programme across
ourestate, alongside growth in our wider pre-owned offerings, supports our
commercial objectives and contributes to a more circular approach within the
luxury watch market.
Our online and digital presence continued to develop during the year, with
Hodinkee further strengthening our reach and engagement with luxury watch
enthusiasts around the world.
The Group has a clear and disciplined approach to capital allocation, prioritising
investment for growth through showroom elevation, new projects and
acquisitions, before returning any surplus capital above and beyond those
requirements as appropriate. The Group’s balance sheet continues to be strong.
SUSTAINABILITY
We remain committed to operating our business responsibly with a long-term
perspective. During the year, our net-zero targets to 2050 were validated by the
Science Based Targets initiative and our continued efforts to embed our Purpose
and future-proof our business across our sustainability pillars People, Planet and
Product, were reflected in our enhanced rating agency scores, including
recognition by a leading global ratings provider as a 2026 industry leader.
Our colleagues remain central to the success of our Group. During the year, we
have continued to invest in culture, development and wellbeing, maintaining good
levels of engagement and continuing to be a great place to work.
DIRECTOR CHANGES
Robert Moorhead resigned from the Board as Non-Executive Director and Chair
ofthe Audit & Risk Committee in November 2025. Paul Edgecliffe-Johnson was
appointed as a Non-Executive Director on 19 February 2026 and Chair of the
Audit & Risk Committee effective from 1 March 2026, and we are pleased to
welcome him to the Board. Paulbrings extensive experience in both the luxury
consumer segment and the US market; his breadth and wealth of experience will
be a valuable addition to the Board.
Further details on Paul’s appointment can be found in the Corporate Governance
Statement on page 158 and in the Nomination Committee Report on page 173
to 174.
GOVERNANCE
Strong governance, together with a continued focus on diversity and inclusion,
underpins the way the Group is run. During the year, the Group remained
compliant with the recommendations of the Parker Review and the FTSE Women
Leaders Review. The Board remains focused on maintaining high standards of
oversight and governance as the business continues to develop.
LOOKING AHEAD
We enter FY27 in a strong position. Our strategy remains clear, our balance sheet
is strong, and we have a good pipeline of showroom projects and development
opportunities. The strength of our brand partnerships, the underlying demand for
luxury watches and jewellery and the capability of our teams give us confidence
inthe Group’s prospects over the long term.
On behalf of the Board, I would like to thank Brian Duffy, the leadership team and
all colleagues across the Group for their continued commitment and hard work.
Iwould also like to thank my fellow Board members for their support throughout
the year.
Finally, I would like to thank our clients, brand partners, shareholders and other
stakeholders for their continued trust and support.
IAN CARTER
CHAIR
13 July 2026
“Our FY26 performance demonstrates
the strength and resilience of our
business and reinforces our confidence
in the future.”
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
5
CHIEF EXECUTIVE OFFICER’S REVIEW
BRIAN DUFFY
CEO
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
6
US
The US delivered another standout performance in FY26 and is now our largest
market by revenue and profit. This represents a significant milestone for the
Group since entering the market eight years ago. Growth was broad-based,
led by underlying demand, showroom investment and the contribution from
recent acquisitions.
We continued to make good progress in our showroom investment programme,
completing a number of projects and advancing a strong pipeline. Our focus
remains on developing our presence in key locations, in partnership with leading
brands, and delivering the highest standards of luxury retail experience. During
the year, we opened a new Watches of Switzerland multi-brand showroom in
Minneapolis alongside two relocations.
Acquisitions remain an important component of our growth strategy. The
acquisition of a majority stake in Deutsch & Deutsch during the year was an
important moment for the Group. This is a great addition to our business;
its four showrooms bring a well-established presence and deep-rooted client
relationships in attractive Texas markets as well as long-standing relationships
with leading luxury watch and jewellery brands. The business is performing well,
and integration is progressing as planned.
Pre-owned watches continued to perform strongly in the US, supported by the
strength of the Certified Pre-Owned programme across our estate, alongside
growth in our wider pre-owned offering. In FY26, our Group pre-owned watch
revenue exceeded 8% of our total luxury watch revenue, with the US continuing
to lead the Group in terms of mix. This remains an important part of our strategy
and broadens our offer to clients.
“I am proud of the strong performance delivered in FY26, with record
Group revenue. The US business continued its momentum, supported by
showroom investment and acquisitions, while trading in the UK improved over
the year. Our progress reflects disciplined execution across our strategic growth
pillars and the strength of our long-standing partnerships with leading luxury
watch and jewellery brands.”
STRATEGIC PROGRESS
AND STRONG DELIVERY
FY26 was a year of strong delivery for the Group. We achieved record revenue
and profit, which was ahead of our previous guidance and market expectations.
This performance reflects the strength of our business model, the quality of our
brand partnerships and consistent execution across our strategic growth pillars.
The external operating environment remained challenging, with macroeconomic
uncertainty and inflationary pressures, particularly the price of gold, persisting. In
the US, the introduction of tariffs on Swiss watch imports led to price increases
and changes to retailer margin structures. While tariff levels subsequently
moderated, some of these changes have remained.
Against this backdrop, we are very encouraged by our performance, with trading
improving as the year progressed. This was supported by investment in our
showroom estate, growth in pre-owned, progress in luxury jewellery and
contributions from acquisitions, alongside our focus on delivering a high-quality
client experience.
We continue to make consistent progress across each of our strategic
growth pillars:
– Showroom Investment: Making targeted investment into our compelling
pipeline of projects, ensuring we maintain best-in-class luxury retail
environments, representative of the brands we partner with
– Pre-Owned: Growing an increasingly important segment of the luxury market,
underpinned by Certified Pre-Owned
– Ecommerce: Continuing to enhance our online proposition and expanding our
client reach
– Luxury Branded Jewellery: Building increasing scale in a complementary
category with significant growth potential
– Acquisitions: Accelerating our growth through targeted acquisition of
high-quality businesses in attractive markets; further scaling our US showroom
network represents a key opportunity
– Client Experience: Maintaining our focus on delivering exceptional client
service and building long-term client relationships
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
7
In luxury branded jewellery, Roberto Coin delivered great progress. Sales
within our Mayors showrooms increased significantly following the introduction
of shop-in-shop concepts, demonstrating the brand’s potential in the US –
the largest global market for luxury jewellery. Building on this success, we are
expanding the shop-in-shop model with a number of key brand partners and
believe Roberto Coin is well positioned to capture a greater share of a market
where luxury consumers are increasingly shifting spend towards branded
jewellery. During the year, we also strengthened the brand’s direct presence,
opening three Roberto Coin mono-brand boutiques in Miami, Las Vegas and
New York, with a fourth boutique scheduled to open in Tampa in FY27.
Our online offering performed well during the year. Hodinkee remains an
important platform for engaging with a global audience of watch enthusiasts and
supporting our online offering. We launched an updated Hodinkee app towards
the end of the period, enhancing client engagement and enabling clients to
purchase directly online.
Key projects during the year included:
– New Watches of Switzerland Southdale, Minneapolis
– Relocation of Mayors Lenox, Georgia
– Relocation of Mayors University Town Center, Florida
– New Roberto Coin boutiques in Hudson Yards, New York; Forum Shops
at Caesars Palace, Las Vegas; and Miami Design District, Florida
UK
In the UK, trading improved over the course of the year, despite a more subdued
consumer environment. This reflects the strength of our portfolio of brands,
disciplined management of the showroom estate and targeted investment in
key locations.
Showroom investment remains central to our approach in the UK. Over the
last two years, we have shifted our showroom network to focus on fewer, higher
impact locations where we can deliver the strongest returns and the highest
standards of client experience. A standout example is the flagship Rolex boutique
on Old Bond Street. Since opening, the showroom has performed exceptionally
well and is now one of the leading Rolex retail destinations globally, reflecting the
strength of our partnership.
Pre-owned watches also performed strongly in the UK, supported by the ongoing
roll-out of the Rolex Certified Pre-Owned programme across our showroom
estate and the development of our wider pre-owned offering.
In luxury jewellery, we opened our first dedicated jewellery-only showroom
with the Mappin & Webb boutique in Manchester. This marks an important step
in the development of our jewellery strategy and reflects our confidence in the
long-term opportunity in this category. In addition, we introduced a lab-grown
diamond offering in the UK, which has performed well, driving incremental sales
and resonating well with consumers.
Key projects during the year included:
– Expansion and conversion of Mappin & Webb Birmingham
– Relocation of Goldsmiths Merry Hill
– Expansion and conversion of Goldsmiths Oxford
– Refurbishment of Northern Goldsmiths, Newcastle
– Expansions and relocations of a further five UK showrooms
– New Mappin & Webb Luxury Jewellery boutique, Manchester
– New Audemars Piguet, AP House, Manchester operating as a joint venture
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We have continued to progress against our strategic pillars of People,
Planet and Product throughout FY26. Highlights during the year include:
– Recognised in the Great Place to Work
®
index in the UK Large Employer
category in 2025
– Met the recommendations of the FTSE Women Leaders Review and continue
to rank in the top ten in the FTSE 250
– Reduced our combined Scope 1 and 2 emissions by 2%, however, Group
emissions increased by 14% year-on-year, reflecting business growth and an
increase in emissions factors within Scope 3 where verified third-party primary
data was unavailable
– Increased the volume of pre-owned watches sold by 8% YoY and continued to
expand our team of accredited watchmakers and technicians to support circularity
– Received an A- score in the CDP (Carbon Disclosure Project) climate change
questionnaire, demonstrating leadership for environmental performance
and transparency
– Mappin & Webb was granted a Royal Warrant by Her Majesty Queen Camilla
following an application, supported by a sustainability assessment
– £10.0 million donated by the Group to charitable causes since 2021, of which
£9.3 million was contributed to The Watches of Switzerland Group Foundation.
The Foundation provides essential support to local charities focusing on poverty,
the advancement of education and relief to those in need
– Headline sponsor for The King’s Trust Change a Girl’s Life campaign for the
second consecutive year
– Volunteering hours increased by 52%
– Successfully maintained Fair Tax Mark certification since 2022
CHIEF EXECUTIVE OFFICER’S REVIEW
CONTINUED
“The flagship Rolex boutique on Old Bond
Street is a powerful example of our showroom
strategy in action. It continues to perform
ahead of our expectations and demonstrates
what can be achieved through close
collaboration with our brand partners
in the very best locations.”
BRIAN DUFFY
CEO
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
8
OUTLOOK FOR FY27
We enter FY27 with good momentum, building on a year in which we delivered
revenue and profit ahead of our previous expectations.
Our Guidance for the 52-weeks of FY27 (pre-IFRS 16) is based on:
– Visibility of supply through calendar year 2026, pricing and margin from key brands
– No significant changes in tax burden
– Guidance reflects confirmed showroom refurbishments, openings and closures,
and excludes uncommitted capital projects and acquisitions
Constant currency revenue growth 5% - 10%
Adjusted EBIT margin % 40 - 80bps expansion from FY26
Capital expenditure £60 - £70 million
Free cash flow conversion c.70%
The equivalent guidance on an IFRS 16 basis is:
Adjusted EBIT margin % 40 - 80bps expansion from FY26
The Group is exposed to movements in the £/$ exchange rate when translating
the results of its US operations into Sterling. The actual exchange rate for FY26
was $1.34.
The Group is mindful of the geopolitical environment and will continue to closely
monitor the situation and any wider impact on global consumer sentiment, but
has minimal direct exposure to the Middle East, or tourist consumers.
While the external environment remains uncertain, the Group is well positioned.
We have a clear strategy, strong brand partnerships and a compelling pipeline of
showroom projects and development opportunities.
Demand for luxury watches and jewellery remains supported by long-term
trends, and we remain confident in the Group’s prospects.
I would like to thank all our colleagues for their continued hard work,
professionalism and commitment throughout the year. Their focus on delivering
the highest standards of client experience, together with the way they support
one another across the Group, remains fundamental to our success and to the
strength of our relationships with brand partners and clients.
BRIAN DUFFY
CHIEF EXECUTIVE OFFICER
13 July 2026
“As we look ahead, we remain
confident in the strength of our
business model, the quality of our
showroom pipeline and the resilience
of demand for leading luxury watch
and jewellery brands.”
BRIAN DUFFY
CEO
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
9
MARKET REVIEWMARKET REVIEW
WHAT DIFFERENTIATES
THE LUXURY WATCH CATEGORY
LONG-STANDING INDUSTRY PRESENCE
Strong brand and retailer partnerships are based on
many years of experience and category expertise.
Brands actively manage distribution through
Selective Distribution Agreements.
MULTI-CHANNEL MODEL REQUIRING
SHOWROOM COVERAGE
Major brands operate Selective Distribution
Agreements requiring operation of one or more
showrooms in addition to online selling
to maintain brand image and meet
high service level requirements.
STRONG VALUE RETENTION
Rarity, heritage, craftsmanship and precious materials
support brand image and value; some products are
considered an investment asset class.
Historically, prices increase over time, with regular
pricing reviews from brands which consider material
costs and foreign exchange rates.
SPECIALIST CATEGORY WITH BROAD APPEAL
Specialist for both the manufacturer and the retailer;
consumers respond to expertise, authority
and heritage.
A UNIQUE MARKET
Led by the most prestigious global brands focused on
craftsmanship, heritage, innovation, brand marketing
and long-term discipline, achieving a stronger
value proposition than most luxury consumer
goods categories.
DEMAND EXCEEDS SUPPLY FOR KEY BRANDS
The overall market demand for highly sought after
Swiss watch brands exceeds production levels.
SWISS CONCENTRATION
Swiss watchmaking remains the benchmark, shaped by
generations of precision, craft and horological expertise.
A heritage that sets Swiss Maisons apart, limiting threats
from emerging technologies and increasing
global competition.
SUPPORTS A MORE CIRCULAR ECONOMY
High-quality mechanical luxury watches are often
passed down for generations or find new owners
over time. Most can be repaired indefinitely and many
of the materials they contain are recyclable.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
10
KEY REASONS TO INVEST
1
Market with attractive, long-term structural
growth dynamics. Resilient demand exceeding
supply for key brands.
2
Track record of strong revenue growth, ahead
of underlying markets and further opportunities
for growth across our strategic pillars.
3
Resilient long-term margin profile.
4
Good cash conversion supporting ongoing
balance sheet strength.
5
Disciplined capital allocation: prioritising organic
and inorganic growth, with surplus capital
returned to shareholders.
6
Long-term, compounding shareholder returns.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
11
MARKET REVIEW
CONTINUED
2009:
Exports to the
UK up +0.1%
(in GBP)
2020:
COVID pandemic
lockdown in
Switzerland
2011-13:
China/HK
bubble
2014-16:
China/HK
correction
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2024 20252023
CHF billion
Luxury Non-luxury
+3.9%
Total CAGR 2000 to 2025
+4.9%
Non-luxury CAGR 2000 to 2025
-2.3%
Luxury CAGR 2000 to 2025
Source: Company information, Swiss Watch Federation statistics
0
5
10
15
20
30
25
THE LUXURY WATCH MARKET HAS A STRONG
TRACK RECORD OF GROWTH…
RESILIENT LONG-TERM GROWTH IN SWISS WATCH EXPORTS (CALENDAR YEARS)
The luxury watch industry benefits from a well-established and resilient
market structure, supported by a track record of consistent long-term
growth, sustained investment, and elevated innovation.
The Group estimates global retail sales of luxury
1
watches were
approximately £50.3 billion in calendar year 2025. This is based on
theestimated retail value of Swiss luxury watches (Swiss exports
andtheSwiss market), repairs and services, and the contribution
fromnon-Swiss luxury watch brands.
The global luxury watch market has delivered long-term growth, with a 25-year
CAGR of 4.9% (2025 v 2000) benefiting from a well-established and resilient
market structure, supported by a track record of sustained investment and
elevated innovation. Of the 4.9% growth in luxury watch exports, +4.1%
relatedto increases in average selling prices (ASP)
2
.
1 Luxury is defined as exports >CHF 500
2 Average selling price is total export value divided by number of units
(40)%
(30)%
(20)%
(10)%
20%
10%
0%
40%
vs 2024vs 2025
US
(1%)
5%
(1%)
6%
2%
38%
1%
23%
17%
(1%)
(2%)
1%
14%
(5%)
(29%)
(28%)
(4%)
(19%)
(13%)
UK EU China Hong KongWorld
vs 2023
vs 2022
Source: Swiss Watch Federation
30%
11%
4%
(31%)
(14%)
0%
SWISS WATCH EXPORTS GROWTH (WRISTWATCHES PRICED OVER CHF 500) APRIL 2025 TOMARCH 2026
Watches at the luxury end of the market have outperformed lower priced
segments and represent 95% of the value of global Swiss watch exports in
calendar year 2025.
The US has seen significant increases in Swiss watch exports in recent years,
whilethe UK has remained ahead of the global average, as can be seen in the
graph (below). This has been supported by continued investment and elevation
ofluxury watch retailing in the US market. In contrast, the absence of VAT-free
shopping in the UK continues to weigh on international tourist spend, with some
demand directed to markets where tax-free incentives are available.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
12
…WHILE NAVIGATING THROUGH
UNPRECEDENTED PERIODS OF VOLATILITY
The global market experienced a period ofvolatility during and
following the COVIDpandemic which normalised in2023/24.
COVID (2020-2022)
The global pandemic resulted in reduced production from Swiss watch brands in
2020, which led to an increased scarcity of product. At the same time, therewas
asharp increase in disposable income as governments introduced lockdowns to
slow the spread of the virus. The combined result led to secondary market prices
reaching all-time highs in 2021.
POST-COVID (2022-2024)
The increased demand and focus on the luxury watch category led to high
recommended retail price (RRP) increases and a shift by some brands towards
higher average selling-price products. In the UK, these developments coincided
with a post-COVID softening in consumer confidence as discretionary spending
moved towards travel and experiences. While this dynamic was far less
pronounced in the US, the overall effect contributed to a meaningful decline in
Swiss watch volumes among more aspirational consumers and a sharp correction
in secondary-market pricing.
Luxury watch brands responded with increased product innovation, innovative
marketing, normalised RRP increases and a collaborative approach with multi-channel
distributors. This helped to stabilise markets, while secondary prices normalised.
GOLD AND SWISS FRANC STRENGTH (2024 ONWARDS)
The sustained strength in gold prices alongside an appreciating Swiss franc has
provided a material cost headwind for Swiss luxury watch brands. This has led
toselective RRP increases, particularly on precious metal models. Currency
movements have also created periods of pricing misalignment across regions,
resulting in limited arbitrage opportunities, which brands have addressed
throughconsidered pricing actions and disciplined distribution.
50
150
100
200
Index
May
2025
May
2021
Nov
2020
May
2022
Nov
2021
May
2023
Nov
2022
May
2024
Nov
2023
Nov
2024
May
2026
Nov
2025
May
2020
Source: WatchCharts
SECONDARY MARKET PRICE EVOLUTION: 2020–2026
US TARIFFS (2025)
On 2 April 2025, under the ‘Liberation Day’ import tariff package, the US
announced a 31% additional tariff on imported Swiss goods. This additional
tariffwas briefly reduced to 10%, before increasing to 39% on 7 August 2025.
Following a deal between the Swiss Government and the US, these additional
tariffs were reduced to 15% which was retroactively implemented from
14November 2025.
In response, Swiss luxury watch brands accelerated shipments into the US
aheadof the tariff increases, resulting in a pronounced pull-forward of exports,
with the Federation of the Swiss Watch Industry data showing shipments rising
by+45% year-on-year in July 2025. This dynamic distorted reported export data,
contributing to a marginal year-on-year decline on a latest 12-month basis despite
continued strength in underlying demand. Allocation of product by the Swiss
luxury watch brands to local US authorised distributors was unchanged during
this period.
As well as increasing the number of units each brand was shipping to the US ahead
of the elevated tariff charges, the brands also looked at ways to spread the impact
these additional tariffs would have on the consumer, their retail partners and
themselves. A number of brands reacted with a combination of RRP increases and
retailer margin reductions. Where retailer margins were reduced, the offset from
RRP increases ensured that retailer cash margins were maintained or improved.
The impact of these periods of disruption and subsequent normalisation is clearly
illustrated in the evolution of secondary market pricing over recent years (below).
Following the sharp price appreciation experienced during the COVID pandemic,
secondary market values corrected materially through 2022 and 2023 before
stabilising as supply and demand dynamics normalised.
This period underscores the extent of volatility experienced across the luxury
watch market in recent years, and the importance of disciplined supply, pricing
anddistribution in supporting category health over the long-term.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
13
MARKET REVIEW
CONTINUED
MARKET REVIEW
CONTINUED
GLOBAL BRANDS AND SUPPLY-DRIVEN GROWTH
Luxury watch brand owners are made up of major independents, large groups
andsmaller independents, as can be seen below. Our Group provides a large
selection of luxury watches covering a wide range of prices and consumer
preferences, including the largest and best known brands alongside smaller
independent brands.
We stock confidently, which provides our clients with a stronger range and
availability. We have regular dialogue with our brand partners on current trends,
often leading to the development of exclusive partnerships and/or first to
markettimepieces.
PREVALENCE OF SELECTIVE DISTRIBUTION
AGREEMENTS
In most markets, distribution of luxury watches takes place under Selective
Distribution Agreements; strict, legally binding contracts entered into with brands
on a point-of-sale basis. These typically focus retailers by geography and ensure
retailers maintain high presentation standards. Selective Distribution Agreements
enable brands to manage the number of points of sale and apply qualitative
criteria to retailer approval. Product presentation and client experience are
closely monitored by brand owners.
Globally, the retail market for luxury watches is fragmented, predominantly
comprising of a large volume of small retailers. However, consolidation to fewer,
better points of sale has been an ongoing trend, particularly in the US market.
Thistrend provides an opportunity for our Group, as we continue to invest in our
showroom portfolio and client experience capabilities to remain a trusted partner
to luxury watch brands.
GLOBAL BRANDS
LOYAL, DIVERSE, MULTI-GENERATIONAL
CLIENTBASE
Luxury watches attract a set of clients who can become repeat clients, spanning
age, income groups and genders. Over the years, there has been an increasingly
positive impact from digital and social media appealing to a younger market.
TheGroup invests in digital marketing to attract clients and stimulate interest
inthecategory.
Our showroom design, location, marketing and unique client service, appeal
toabroad demographic audience.
In FY25, the Group acquired the Hodinkee business, the pre-eminent global
digital editorial content provider and gateway for luxury watch enthusiasts.
Hodinkee currently has 56.1 million views per year and 1.8 million social media
followers, having delivered year-on-year growth of 17% and 20%, respectively,
inFY26.
Major independents Swatch Group Richemont LVMH Independents
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
14
UK Italy France Germany Benelux Spain Nordics CanadaUS
70
80
0
20
10
60
50
40
30
Source: Company estimates based on Swiss Watch Export Data
2021 20222019 2020 2023 20252024
Our key markets
CONTINUOUS PRODUCT INNOVATION
ANDADVANCEMENT
Luxury watches are characterised by a focus on product innovation and
advancement and are normally introduced at prestigious watch fairs in
Switzerland. In the US and the UK, there is a strong preference for sports
modelswith the key brands consistently investing to ensure the highest
degreeoftechnical (diver, aviation and chronograph) specifications.
New product innovations are showcased by luxury watch brands at watch fairs
such as Watches and Wonders in Geneva. This year, product innovation focused
on evolution rather than revolution, including the revival of historical product
from the likes of Cartier (Roadster) and Tudor (Monarch). A number of brands
shifted focus towards dial innovations, and from a colour perspective, a continued
growth in green dials, but also a noticeable trend in ‘Earth’ tones.
LUXURY WATCH RETAIL SALES PER CAPITA (USD)
On a sales per capita basis, the US offers the greatest growth opportunity
GEOGRAPHICAL MARKETS
The Group operates in the US and UK markets, two of the major Swiss watch
markets. The chart below shows the luxury watch retail sales per capita over
thepast seven years.
On a per capita basis, the UK market has outperformed the US market and all
major European markets since 2000. The UK market has the highest per capita
retail spend by domestic clients on luxury watches. We believe the differential
toother markets reflects retail investment, not consumer 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. The US market is
underdeveloped, providing significant growth opportunities for the Group.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
15
MARKET REVIEW
CONTINUED
THE US LUXURY WATCH MARKET
2020
2000 2001 2002 2003 2004 2006 2007 2008 20092005 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019
2021
2022
2023
2024
2025
Swiss Watch Federation statistics. Luxury watches classified as >CHF 500
Units (‘000s) Value (CHF M) ASP (CHF ‘000s)
3,500
3,000
4,500
4,000
0
6.00
5.00
4.00
3.00
2.00
1.00
0
500
1,000
1,500
2,000
2,500
CHF million
+0.2%
CAGR 2000 to 2025 – Volume
CAGR 2019 to 2025 – Volume
+8.3%
+4.1%
CAGR 2000 to 2025 – Value per unit
CAGR 2019 to 2025 – Value per unit
+3.0%
+4.4%
CAGR 2000 to 2025 – Total value
CAGR 2019 to 2025 – Total value
+11.6%
LUXURY SWISS WATCH EXPORTS TO THE US (CALENDAR YEARS)
After a period of underinvestment inthe US leading up to 2018, the market
has performed strongly and istoday the largest global market for Swiss watch
exports, overtaking China in 2021. The Group estimates retail sales of luxury
watches reached $10.1 billion in calendar year 2025.
The US market is led by Rolex with strong market positions of Cartier,
PatekPhilippe, Audemars Piguet, OMEGA, TUDOR, Breitling, TAG Heuer,
IWCSchaffhausen, Jaeger-LeCoultre, Longines and Vacheron Constantin.
Additionally, there are also relatively strong market positions for smaller
independent brands such as MB&F, Bovet and H. Moser & Cie.
US retail distribution has consolidated towards larger showroom formats in
majorshopping areas, and retail investment by the Watches of Switzerland Group
and others has increased. The US market is predominantly domestic, although
domestic tourism (e.g. to Florida or Las Vegas) is significant. Inrecent years, Rolex,
Patek Philippe and other brands have been rationalising distribution, reducing
thenumber of agencies to a smaller number of higher-quality retailers.
Despite this consolidation at the top end of the market, the broader US luxury
watch landscape remains highly fragmented, with c.70% of distribution served
byretailers operating one, two or three stores, while the remaining c.30%
isconcentrated among key multi-door operators including the Watches
ofSwitzerland Group, Bucherer and The 1916 Company.
In the period 2000 to 2025, luxury Swiss watch exports to the US increased
ataCAGR of 4.4%, accelerating to 11.6% from 2019 to 2025, following the
Watches of Switzerland Group’s entry into the US market in 2018.
The US remains the world’s largest market for luxury watches. Strong
discretionary spending is underpinned by rising wealth generation across
thecountry, alongside increasing consumer interest in the category.
Since entering the market in 2018, we have steadily developed our showroom
network, which now serves clients across a broad range of locations, as shown
opposite. This creates a strong platform for continued expansion in a market
where we see significant long-term growth potential.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
16
WA
OR
ID
MT
WY
CO
UT
AZ
AK
HI
NM
TX
LA
MS AL
GA
SC
NC
TN
KY
VA
WV
OH
PA NJ
NY
ME
VT
NH
MA
RI
CT
DE
MD
IN
IL
IA
NE
SD
ND
MN
WI
MI
AR
OK
KS MO
FL
NV
CA
>$3tn
$2tn to $3tn
$1tn to $2tn
$0.5tn to $1tn
<$0.5tn
Watches of
Switzerland Group
operations
US MARKET HIGHLIGHTS
1
RANKING IN GLOBAL MARKETS
FOR SWISS WATCH EXPORTS
CALENDAR YEAR 2025
$10.1bn
ESTIMATED LUXURY WATCH RETAIL
SALES CALENDAR YEAR 2025
US GDP PER STATE 2025
Source: U.S. Bureau of Economic Analysis
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
17
MARKET REVIEW
CONTINUED
2020
2000 2001 2002 2003 2004 2006 2007 2008 20092005 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019
2021
2022
2023
2024
2025
Swiss Watch Federation statistics. Luxury watches classified as >CHF 500
Units (‘000s) Value (CHF M) ASP (CHF ‘000s)
1,400
1,200
1,800
1,600
0
6.00
5.00
4.00
3.00
2.00
1.00
0
200
400
600
800
1,000
CHF million
+2.8%
CAGR 2000 to 2025 – Volume
CAGR 2019 to 2025 – Volume
-2.4%
+4.2%
CAGR 2000 to 2025 – Value per unit
CAGR 2019 to 2025 – Value per unit
+6.8%
+7.1%
CAGR 2000 to 2025 – Total value
CAGR 2019 to 2025 – Total value
+4.2%
THE UK LUXURY WATCH MARKET
LUXURY SWISS WATCH EXPORTS TO THE UK (CALENDAR YEARS)
Source: GFK
1 Directly operated by the brands.
44%
4%
7%
25%
19%
Watches of Switzerland Group
National groups
Independent jewellers
Luxury department stores
Corporate boutiques
1
UK LUXURY WATCH MARKET 2025
The UK is the fifth largest market globally for Swiss luxury watch exports.
TheGroup estimates retail sales of luxury watches amounted to £3.6 billion
incalendar year 2025.
The UK market has been resilient, a testament to a well-invested, disciplined
multi-channel market and a highly engaged domestic clientele, which has typically
had a preference for the sports luxury watch category.
While the removal of VAT-free shopping on 1 January 2021 reduced international
tourist spending in the UK luxury watch market, the subsequent increase in
domestic demand has helped to support the category’s continued strength. For
the Group, tourist-driven sales in the UK accounted for 33% of revenue in FY19,
compared to less than 5% today, highlighting a significantly more
domestically-driven revenue mix.
In the period 2000 to 2025, luxury Swiss watch exports to the UK increased
byaCAGR of 7.1%.
The UK market is made up of national groups, independent jewellers, luxury
department stores and boutiques directly operated by the brands. It is led by
Rolex, with strong market positions of Patek Philippe, OMEGA, Cartier, Breitling,
TAG Heuer, TUDOR, IWC Schaffhausen, Longines and Tissot.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
18
5
RANKING IN GLOBAL MARKETS
FOR SWISS WATCH EXPORTS
CALENDAR YEAR 2025
£3.6bn
ESTIMATED LUXURY WATCH
RETAIL SALES CALENDAR
YEAR2025
UK MARKET HIGHLIGHTS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
19
MARKET REVIEW
CONTINUED
PRE-OWNED WATCH MARKET
The pre-owned market is a positive development for the authorised retail
market. It provides liquidity and value preservation for luxury watches. This
isagrowing sector due to the supply of certain products being unable to meet
demand in the first hand market and for collectors given that the vast majority
of luxury watch references are no longer in production
1
. For many collectors,
rarity and historical significance are increasingly more important than waiting
lists for current production models. Certain pre-owned products sell at prices
above RRP depending on brand, availability and scarcity.
The market is made up of both retailers operating pre-owned and trade-in
models and dedicated online marketplace players. The Watches of Switzerland
Group is an active operator in the pre-owned segment. The 2020 acquisition
ofAnalog:Shift brought specialist expertise in vintage and pre-owned curation,
sourcing and authentication into the Group. With the support of our scale,
showroom network and service-centre capabilities, we are well positioned to
capitalise on growth in the category and deliver a consistent, high-quality client
experience across channels.
In 2023, Rolex launched the Rolex Certified Pre-Owned programme, offering
clients the opportunity to purchase pre-owned watches from official authorised
retailers that are certified as authentic and supported by a Rolex-backed two-year
warranty. This has broadened the appeal of the pre-owned market, while also
enabling Rolex to take greater control of the customer experience, including among
clients who may previously have been hesitant to purchase pre-owned items.
The Watches of Switzerland Group has established a leading position within
theRolexCertified Pre-Owned programme. The programme is now available
across all the Group’s Rolex agencies in the US (excluding the recently acquired
Deutsch & Deutsch showrooms), and in 30 showrooms across the UK, including
adedicated floor within the flagship Rolex boutique on Old Bond Street, London,
supported by our online offering.
10%
Source: Deloitte Swiss Watch Industry Study 2025 (November 2025)
11%
37%
42%
44%
49%
Enabling a new type of clientele
to experience the brand/enter
the luxury market
As a welcomed side-effect
to create more awareness and
visibility for the watch industry
As having a positive influence on
brand perception and value
As a threat to new watch sales
As a way to instil new energy
to auction sales
An opportunity to boost primary
sales via trade-in programmes
RESPONSES TO “HOW DO YOU SEE THE SECONDARY /
PRE-OWNED MARKET?”
Independent research suggests that the pre-owned watch market has settled into
a more established position within the luxury watch sector. Following the market
correction experienced in 2022 and 2023, pricing has stabilised and activity is now
largely driven by long-term collectability and personal preference, rather than
speculative behaviour
2
.
Engagement with the pre-owned category remains highest among younger clients.
Almost a third of global consumers expect to purchase a pre-owned watch in the
next 12 months, rising to around 40% among Millennials and Generation Z. The
category therefore continues to play an important role in broadening access to
luxury watches and supporting entry for new clients
2
.
From an industry perspective, the pre-owned market is increasingly viewed as
complementary to the sale of new watches. Deloitte LLP research indicates that
many industry participants see the pre-owned category as supporting customer
acquisition and longer-term client relationships, including through trade-in activity
that may facilitate subsequent primary purchases. The pre-owned market
therefore remains an adjunct to the primary market rather than a substitute for it
2
.
Pre-Owned is a significant strategic growth pillar for the Group; for further details
refer to pages 40 to 42.
1 Source: BCG Luxury Preowned Watches, Your Time Has Come (March 2023).
2 Source: Deloitte Swiss Watch Industry Study 2025 (November 2025).
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
20
AFTER-SALES AND SERVICING
After-sales and servicing complements the primary market for luxury watches
and is central to protecting and extending the life and value of the products.
Itplays an important role in maintaining brand standards and delivering a
consistent, high-quality client experience throughout a watch’s lifetime.
The market is primarily served by traditional multiple and independent retailers,
alongside brand in-house resources. Independent research indicates that
after-sales and servicing represents a multi-billion-dollar global market
1
, supported
by long-term ownership trends, a growing installed base of luxury watches and
increasing consumer focus on product care and value retention. Growth in the
sector continues to be constrained by industry capacity and theavailability of
authorised servicing infrastructure, and the after-sales and servicing market has
not kept pace with the growth in new watch sales.
Demandfor servicing continues to increase over time as more luxury watches
reach their first and subsequent service intervals, reflecting long ownership cycles
and ongoing maintenance requirements. Independent research also points to
increasing client preference for authorised service centres, driven by the
importance of technical expertise, genuine parts and service reliability
2
,
reinforcing the value of the Group’s continued investment in this area.
The Group continues to invest in the expansion of its after-sales and servicing
offering in both the US and the UK, supported by dedicated service centres
in each market and a team of 65 qualified watchmakers across the Group.
After-sales and servicing also contributes to the circular economy through
the maintenance, repair and longevity of luxury timepieces; refer to page 129
to learnmore.
1 Source: Verified Market Research, Watch Service Market (March 2026).
2 Source: Deloitte Swiss Watch Industry Study 2025 (November 2025).
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
21
2018
2019
2020 2021 2022 2023 2024 2025
25
30
35
40
0
5
10
15
20
US
UK
2015 2016 2017
2018
2019
2021 2022 2023 2024
2025
2020
-10%
-20%
-30%
10%
0%
20%
30%
40%
50%
60%
US
UK
EU
World total
+9.3%
UK CAGR 2015 to 2025
US CAGR 2015 to 2025
+4.9%
LUXURY JEWELLERY MARKET
Source: Metals Focus, Refinitiv GFMS, ICE Benchmark Administration, World Gold Council
LUXURY JEWELLERY DEMAND PER CAPITA (US$)
MARKET REVIEW
CONTINUED
LUXURY JEWELLERY
Our luxury watch business is complemented by a strong and growing luxury
jewellery offering.
The US and UK markets continue to grow, as illustrated in the chart below,
andare among the largest globally on a per capita basis for luxury jewellery.
JEWELLERY DEMAND: CUMULATIVE YOY% (CALENDAR YEARS)
Source: Metals Focus, Refinitiv GFMS, ICE Benchmark Administration, World Gold Council
The US remains one of the most important markets globally, supported by a
largeand affluent consumer base, a strong culture of gifting and self-purchase,
anda well-established luxury retail environment. As a result, the US continues
tobe apriority market for the Group’s luxury jewellery strategy.
At a global level, overall jewellery demand has continued to grow over time (chart
below). Within this, industry research indicates that luxury jewellery has materially
outperformed the broader fine jewellery market over the past decade
1
, supported
by a structural shift in demand towards higher-value and branded propositions.
While demand continues to evolve, the global jewellery market remains highly
fragmented, with a significant proportion of sales still accounted for by unbranded
players. This highlights the scale of the opportunity for established luxury brands
and trusted retail partners as consumer preferences increasingly shift towards
quality, provenance and trust.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
22
LUXURY BRANDED JEWELLERY
The luxury jewellery market has been characterised by a shift towards branded
products, supported by stronger growth in the branded segment relative to the
wider category.
Within the broader category, the growth of luxury branded jewellery remains
adefining structural trend, aligning closely with the Group’s core capabilities
andrepresenting a key strategic growth pillar.
Despite the strength of leading maisons, the luxury jewellery market remains
structurally dispersed, with even the largest brands accounting for relatively
smallshares of global sales
1
. This creates a compelling environment for curated,
multi-brand retail, where scale, expertise and long-standing client relationships
arekey differentiators.
As with luxury watches, branded jewellery is characterised by brand-led demand,
controlled distribution and long-term client relationships. The leading jewellery
maisons are built on enduring iconic collections, often developed and refined
overseveral decades, reinforcing brand equity and client loyalty over time.
Industry analysis also highlights a positive relationship between scale and
profitability within luxury jewellery, underlining the advantages of established
global brands and disciplined distribution models.
Jewellery allows the Group to broaden its client base, with higher purchase
frequency and a wider range of price points, supporting client acquisition and
repeat engagement.
The Group partners with a curated portfolio of leading luxury jewellery brands,
including Roberto Coin and Messika, and has introduced David Yurman to the
UKmarket.
The Group’s strategy is to continue to expand its portfolio of luxury jewellery
brands, often with exclusive or semi-exclusive representation within a particular
geography, supported by the Group’s scale, retail expertise and established
clientrelationships.
40%
60%
Branded
Unbranded
JEWELLERY MARKET WORLDWIDE
1
In FY26, the Mappin & Webb Luxury Jewellery boutique in Manchester opened,
retailing a number of brands on an exclusive basis outside London.
In the US, the Group continues to build its position following the acquisition of
exclusive distribution rights for the Roberto Coin luxury jewellery brand across
the US, Canada, Central America and the Caribbean.
For further details on the Group’s luxury branded jewellery strategy refer
topages 46 to 49.
1 Source: Morgan Stanley: Key Trends in the Luxury Jewellery Industry (June 2026)
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
23
OUR BUSINESS MODEL
HOW THE GROUP CREATES VALUE
INPUTS HOW WE CREATE VALUE
WHAT WE DO
We partner with the most prestigious
luxury watch and jewellery brands
toprovide the highest level of client
service by well-trained, expert
colleagues in modern, luxurious and
welcoming showroom environments
and state-of-the-art online sites. This
is all supported by our international
scale, integrated technology and
impactful marketing.
The Group operates in the US
andUK.
BRAND PARTNERSHIPS
We collaborate with our long-standing
luxury watch and luxury jewellery
brand partners to elevate and expand
their distribution and partner
on-demand forecasting, product
launches, showroom projects, online,
clienteling, marketing events and
learning and development for all
ourcolleagues.
CLIENT EXPERIENCE
Our showroom colleagues provide
expertise and knowledge to ensure
an exceptional client experience
through extensive learning and
development and our industry-leading
Xenia Client Experience Programme.
SHOWROOM
ENVIRONMENT
Our well-invested showrooms
areluxurious, open, welcoming,
contemporary, spacious, non-
intimidating and browsable. The
design concept is regularly assessed
inorder to ensure we continue to
appeal to a broad client demographic
and drive high levels of productivity
across our estate.
MULTI-CHANNEL
Our multi-channel model spans a
well-invested showroom network,
with flagships, regional showrooms,
travel retail and mono-brand
boutiques complemented by
market-leading ecommerce platforms,
all complemented by Hodinkee, the
editorial authority on luxury watches.
The Group has atruly multi-channel
approach, which includes Click &
Collect, an appointment system and
the Luxury Watch and Jewellery
Virtual Boutique.
BRAND PARTNERSHIPS
Our strong and long-standing
relationships with the most recognised
and prestigious luxury watch and
jewellery brands have been forged
overmany years and include new
relationships with developing brands.
Please see pages 30 to 32 for more
details on the prestigious brands we
partner with.
COLLEAGUES
The Watches of Switzerland Group
iscommitted to building a great place
to work by giving people every reason
to join, grow and stay with our Group.
We recognise the many benefits a
diverse and inclusive workforce
canbring.
CLIENTS
We offer an extensive choice of brands
and products in the world of luxury
watches and jewellery. We aim to
make our clients feel welcome through
unintimidating, inviting, browsable,
modern and luxurious environments
inour showrooms, along with a
market-leading online offering.
DESTINATION
SHOWROOMS
Our clients purchase our products
through our retail network of directly
operated showrooms. These include
multi-brand showrooms, a presence
intravel retail, online and a portfolio of
mono-brand boutiques in partnership
with our brands.
FINANCIAL
INVESTMENT
Watches of Switzerland Group PLC is
listed on the London Stock Exchange.
Through focused investment we drive
growth, generate shareholder value
and ensure the long-term sustainable
future of the Group.
T
h
e
M
a
r
k
e
t
(
S
e
e
p
a
g
e
1
0
)
OUR PURPOSE
To WOW our clients while
caringfor our colleagues, our
communities and our planet.
Activities
LUXURY
WATCHES
LUXURY
JEWELLERY
Online sales Marketing
Showrooms Partnerships
Categories
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
24
VALUE CREATED
£1,828m
FY26 REVENUE
18.0%
FY26 RETURN ON
CAPITAL EMPLOYED
1
£278m
FY26 CASH GENERATED
FROM OPERATIONS
2,942
NUMBER OF COLLEAGUES
£10m
CONTRIBUTED BY THE GROUP TO
CHARITABLE CAUSES SINCE 2021
126
UK SHOWROOMS
AT 3 MAY 2026
65
US SHOWROOMS
AT3 MAY 2026
191
TOTAL SHOWROOMS
AT 3 MAY 2026
£155m
FY26 ADJUSTED EBIT
1
1 This is an Alternative Performance Measure. Refer to the Glossary on pages 261
to 265 for definition and reconciliation to statutory measures where relevant.
MARKETING
We deliver impactful marketing,
focused on digital communications,
Client Relationship Management, PR,
client experiences and co-operative
activity with brand partners. Our
editorial content across watches and
jewellery provides an authoritative
voice within our market, while the
Hodinkee business accelerates the
Group’s online leadership. Please
seepage 44 for more details.
SCALE
A strong competitive position, built
onnational coverage in the UK, with
aportfolio of 126 showrooms, and
agrowing and significant presence
inthe US, comprising 65 showrooms
as at 3May 2026.
OPERATIONAL
EXCELLENCE
Technology: Our retail operations are
supported by integrated IT systems,
including a core SAP platform, powering
showroom point-of-sale, CRM, reporting
solutions, live inventory availability and
operations. This platform supports
scalable expansion in new markets
orthroughacquisitions.
Merchandising: Dynamic inventory
management optimises stock
availability, enhances showroom
productivity and in the UK, allows
fornationwide coverage, giving us
akeycompetitive advantage.
Retail operations: We aim to continually
drive productivity and profitability,
witha high level of accountability
andperformance management.
FINANCIAL DISCIPLINE
Financial performance: We run all our
showrooms to be profitable, leveraging
showroom and central overheads
through top line growth with strict
investment criteria on projects or
investment opportunities. The closure
of low profitability showrooms in the
UK is a demonstration of this financial
discipline in action.
Cash generation: Strong, consistent
cash generation is supported by
disciplined working capital management,
with sufficient liquidity to fund growth
and acquisitions, including the recent
acquisition of a majority stake in
Deutsch & Deutsch. Wetake a
disciplined and data-led approach to
return on investment, aiming to deliver
long-term sustainable earnings growth
whilst retaining financial capability to
invest in our business and to execute
our strategic priorities, before returning
to shareholders any surplus capital
above and beyond those requirements,
as appropriate. In FY26, the Group
completed a share buyback programme,
returning £25 million to shareholders.
COLLEAGUES AND
COMMUNITIES
We develop our colleagues through
significant investment in training and
development. This is supported by
promoting an open and inclusive
environment through listening to
ourcolleagues. For more details
refertopages 91 to 95.
The Watches of Switzerland Group
Foundation launched in 2021 supports
anumber of causes, with anemphasis
on helping poor and vulnerable people
out of poverty. For more details refer
to page 97.
PLANET AND PRODUCT
We are committed to always
‘doingthe right thing’ to protect our
planet and ensure our products are
responsibly and sustainably sourced.
We continue to progress towards
ourgoals to decarbonise by 2050,
buildclimate resilience and preserve
natural resources by understanding
ourdecarbonisation levers, developing
our climate transition planning and
enhancing the resilience of our
businessto climate-related risks
andopportunities.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
25
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
26
OUR BRAND
PARTNERSHIPS
Our long-standing association with
themostrecognised and prestigious luxury watch
and jewellery brands is a key point of distinction and
a cornerstone of our unique client experience.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
27
LUXURY WATCHES
We have developed strong, long-standing and collaborative partnerships with the most
prestigious luxury watch brands over the years. We constantly strive to represent our brand
partners in the best possible way to our clients. We work together to identify distribution
opportunities, partner on demand forecasting and product development, and collaborate
closely on all showroom projects, across our online platform, clienteling initiatives and
marketing activities. We also collaborate with our brand partners on training our colleagues
toensure we have experts across all brands within our business.
Founded in 1905 in London by Hans Wilsdorf, Rolex
watches are crafted from the finest raw materials
andassembled with scrupulous attention to detail.
28
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
Utilising over 180 years of experience and perpetuating the
traditionof Genevan watchmaking, Patek Philippe has always been
atthe forefront of the luxury watch industry.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
29
Audemars Piguet is the oldest fine watchmaking manufacturer
still in the hands of its founding families (Audemars and Piguet).
Space, James Bond and the Olympics – when it comes to associations,
OMEGA certainly beats most watch brands intermsof cool, but above
that is their absolute mastery oftechnologyand ability to produce
some of the finest movementsavailable today.
Widely regarded as the inventor of the first watch designed
to be worn on the wrist, Cartier was established in Paris
in1847 and is arguably one of the most recognisable Maisons
in the world.
TAG Heuer creates watches that will take you anywhere –
intothe ocean’s depths, up a mountain, behind the wheel of a car.
TAG Heuer timepieces are reliable, innovative
and versatile.
Léon Breitling started his eponymous brand in 1884 and it has
specialisedin complicated timepieces and chronographs from the
beginning, going on to pioneer the wrist-worn chronograph, which
washugely popular with pilots.
Since its founding in 1926, TUDOR has endeavoured to produce
thebest possible watches at the best possible price. This mission,
bold then as it is now, is inspired by the vision of the brand’s
founderHans Wilsdorf.
OUR BRAND PARTNERSHIPS
30
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
OUR BRAND PARTNERSHIPS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
31
LUXURY JEWELLERY
At the Watches of Switzerland Group, our brands Mappin & Webb, Goldsmiths, Mayors,
Betteridge and Deutsch & Deutsch offer their very own collections of jewellery all steeped in
arich history and heritage, making our showrooms and websites the destination for fine luxury
jewellery. We are also privileged to partner with the best luxury jewellery brands in the world,
including Roberto Coin, David Yurman, FOPE, Messika and many others.
OUR BRAND PARTNERSHIPS
32
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
GOVERNANCE REPORT FINANCIAL STATEMENTS
33
STRATEGIC REPORT
OUR STR ATEGY
DELIVERING
OUR STRATEGY
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
34
2. PRE-OWNED
—
Pre-Owned is one of the Group’s strongest growth areas, complementing our
leadership in luxury watches. It has rapidly become our second-largest category,
reflecting strong client demand and our leadership in this part of the luxury watch
market, driven in particular by the success of Rolex Certified Pre-Owned,
alongside continued growth in other pre-owned brands. The category supports
the circular nature of the luxury watch market, strengthens long-term client
relationships and reinforces our position across both new and pre-owned watches.
1. SHOWROOM INVESTMENT
—
Showroom investment remains a core strength for the Group, supporting our
leadership in luxury watch retailing and our long-term growth. We continue to
invest in a strong showroom network across the US and UK, with new openings,
refurbishments, relocations and expansions delivering enhanced brand
environments that reinforce our retail leadership. These physical spaces are a
key differentiator, enabling us to present our brand partners with high-quality
execution and provide a consistently high standard of client experience.
Our approach is supported by disciplined capital allocation, clear payback criteria
and a strong pipeline of future projects that will support continued growth.
4. LUXURY BRANDED JEWELLERY
—
Luxury branded jewellery remains a key growth category for the Group,
complementing our core watch proposition, supported by increasing client
demand, strengthened brand partnerships and a growing presence across
multi-brand and mono-brand formats. Our portfolio benefits from strong
brand momentum – notably Roberto Coin, which continues to deliver strong
performance and greater visibility in North America. We are further
enhancing our jewellery proposition through dedicated luxury environments,
including the new Mappin & Webb Luxury Jewellery boutique in Manchester,
which strengthens our luxury retail presence and reinforces our leadership
in this category.
3. ECOMMERCE
—
Ecommerce is a key part of our multi-channel model, extending the reach of
our showroom-led luxury watch and jewellery retail proposition. Digital growth
accelerated in FY26, supported by investment in the re-platforming of selected
US ecommerce sites, delivering clear improvements in performance, conversion
and user experience.
Ecommerce complements our showroom network by providing clients with
a consistently high level of service across our showroom and digital channels,
strengthening our multi-channel model and enabling us to reach clients who
choose to research or purchase online.
6. CLIENT EXPERIENCE
—
Client experience remains the foundation of our business model and a core
differentiator for the Group, underpinning each of our strategic growth pillars.
Our client-focused culture – grounded in deep product expertise, a strong
understanding of client needs and the delivery of personalised, high-quality
service across both showroom and digital channels – continues to set us apart.
Our flagship locations, including Rolex Old Bond Street with its exceptional
94% Net Promoter Score, demonstrate the impact of combining elevated
environments with high standards of service. Through our initiatives and
continued focus on personalisation, we strengthen relationships and support
long-term client engagement.
5. ACQUISITIONS
—
Strategic acquisitions remain an important part of our growth and capital
allocation strategy, enabling the Group to accelerate expansion, strengthen
brand partnerships and build our presence in key luxury markets. Recent
activity includes the integration of Roberto Coin Inc., which enhances our
luxury branded jewellery offering, and the Hodinkee business, which supports
our digital and editorial capability. In FY26, we further expanded our US
presence through the acquisition of a majority stake in Deutsch & Deutsch,
a long-established luxury watch and jewellery retailer with four showrooms
across Texas. This transaction strengthens our US network and reflects our
disciplined, returns-focused approach.
The Group continues to execute its strategy, supported by disciplined investment, strong brand partnerships
and a consistent focus on client experience. These pillars provide the priorities for sustainable long-term
growth across the US, UK and online, supporting Group revenue, profitability and return on capital employed.
OUR STRATEGIC PILLARS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
35
Our showroom network is a core part of our
growth strategy and supports our focus on
delivering a best-in-class luxury retail experience
across the US and UK. We continue to invest in new
openings, relocations, expansions and refurbishments
to create environments that meet the standards of
our brand partners and provide a consistently strong
client experience. Multi-channel retail is particularly
important in this category, giving clients access
to Click & Collect, extended online ranges and
after-sales and servicing.
STRATEGIC PILLAR 1:
SHOWROOM
INVESTMENT
OUR STR ATEGY
CONTINUED
Our well-invested showrooms are luxurious, open, welcoming, contemporary,
spacious, non-intimidating and browsable. The design concept is regularly assessed
in order to ensure we continue to appeal to a broad client demographic and drive
high levels of productivity across our estate.
Through our showroom investments we:
– Strengthen luxury brand presentation: by expanding space we are able to
represent our brand partners to the highest level, securing allocation of product
and often bringing new brands into an existing location. We have a strong
pipeline of future projects with our brand partners in both the US and UK
– Deliver exceptional client experience: expanded space includes dedicated
hospitality areas such as bars and private VIP rooms to enhance the client
experience. We are also able to deliver tailored client events within our
showroom network
– Integrate key growth areas into our formats: including luxury branded
jewellery and pre-owned, strengthening category breadth
Over the last ten years, the Group has been investing in modernising the
showroom estate, ensuring our brands are showcased to the highest levels and
client experience is world-class. In FY26, we delivered 12 showroom elevations
across the US and UK. As of 3 May 2026, our showroom elevation programme
is 86% complete in the US and 82% complete in the UK.
Together, these elements make our showroom investment strategy a clear
competitive advantage – deepening brand partnerships, enhancing client
satisfaction and reinforcing our position as the leading luxury watch and
jewellery retailer in the US and UK.
CASE STUDY:
SHOWROOM EXPANSIONS AND RELOCATIONS
The following are examples of how we are modernising our showroom estate,
to provide best-in-class luxury watch and jewellery retailing in the US and UK.
MAYORS LENOX TRANSFORMATION
Following the acquisition of Mayors in 2017, the Group has invested to improve
the quality and consistency of its multi-brand showroom estate across Florida
and Georgia. Early investment focused on expanding and upgrading existing
locations to improve layout, presentation and client service.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
36
The Lenox location provides a clear example of how this approach has
progressed. The site was initially expanded as part of the Mayors estate
and was later developed into a dedicated Rolex boutique. As part of that
investment, a separate Mayors multi-brand showroom was opened in FY26,
allowing the two formats to be presented clearly while continuing to benefit
from shared operations. The Mayors showroom features a Roberto Coin
shop-in-shop concept alongside a Rolex Certified Pre-Owned space.
CASE STUDY:
GOLDSMITHS LUXURY
Since the launch of the Goldsmiths Luxury concept in FY22, the Group
has continued to upgrade existing Goldsmiths showrooms across the UK.
Investment has focused on refreshing legacy environments, improving layout
and flow, and strengthening brand presentation. This has resulted in a more
consistent luxury experience across the estate, delivered through a disciplined
and repeatable approach to investment.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
37
OUR STR ATEGY
CONTINUED
CASE STUDY:
MAPPIN & WEBB CONTEMPORARY – YORK
The Mappin & Webb Contemporary concept has modernised the presentation of the brand, whilst maintaining its heritage and history. In York, we relocated the
Mappin & Webb showroom to a larger space, including hospitality areas. A similar concept has been rolled out to our Guernsey, Glasgow and Bluewater showrooms.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
38
DISCIPLINED PAYBACK CRITERIA
We apply clear payback criteria to all showroom investments. Returns are driven
by increased brand allocation, improved presentation, higher conversion, greater
appointment capacity and a strengthened product mix, including luxury branded
jewellery and pre-owned watches.
Typical payback periods are two to three years for relocations, expansions and
refurbishments, and three to four years for flagship projects. These outcomes
reflect the strength of the luxury watch category and our disciplined approach to
capital allocation, supported by the Group’s consistently strong long-term return
on capital employed (ROCE) performance. The Group usually enters into lease
agreements with a maximum lease term of ten years with a break clause after five
years. This gives the Group flexibility to future-proof the estate.
FY26 PROGRESS
£66 million of expansionary capex invested into developing our portfolio, including:
– New Watches of Switzerland Southdale, Minneapolis
– Relocation of Mayors Lenox, Georgia
– Relocation of Mayors University Town Center, Florida
– New Roberto Coin boutiques in Hudson Yards, New York; Forum Shops at
Caesars Palace, Las Vegas; and Miami Design District, Florida
– Expansion and conversion of Mappin & Webb Birmingham
– Relocation of Goldsmiths Merry Hill
– Expansion and conversion of Goldsmiths Oxford
– Refurbishment of Northern Goldsmiths, Newcastle
– Expansions and relocations of a further five UK showrooms
– New Mappin & Webb Luxury Jewellery boutique, Manchester
– New Audemars Piguet, AP House, Manchester operating as a joint venture
FY27 PRIORITIES
£70 million projected capex spend, including the following projects:
– Expansion of Mayors Avalon, Georgia; Summer 26
– Expansion of Watches of Switzerland and introduction of Mayors, Marlton,
New Jersey; Autumn 26
– Refurbishment of flagship Betteridge showroom in Greenwich, Connecticut;
Winter 26
– New Roberto Coin boutique, Tampa, Florida; Winter 26
– Refurbishment of Goldsmiths Watford and Chelmsford; Summer 26
– Expansion of Rolex boutique, Glasgow; Autumn 26
– Relocation of Goldsmiths Nottingham; Autumn 26
– Relocation of Rolex boutique in Heathrow T5; Spring 27
CASE STUDY:
NEW SHOWROOMS
The Group works closely with property consultants to identify prime locations
where key luxury watch brands have limited representation. The key focus is
on high visibility, high footfall locations with luxury adjacencies.
Watches of Switzerland Soho, New York
Watches of Switzerland Hudson Yards, New York
Watches of Switzerland Southdale, Minneapolis
LINK TO KPIS
1
2
3
4
5
6
7
8
9
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
9
11
Read more on pages 64 to 68 and
142 to 147
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
39
OUR STR ATEGY
CONTINUED
Pre-Owned is our second largest brand and broadens our ability to serve clients
across a wider range of price points and product types, from first-time buyers
to experienced collectors. Offering authenticated, warrantied watches within a
luxury retail environment provides reassurance to clients who previously avoided
unregulated channels. Together with our long-standing experience in pre-owned
and vintage through Analog:Shift, this enables the Group to offer a clear and
comprehensive proposition across both new and pre-owned watches.
Rolex Certified Pre-Owned – fully serviced, authenticated and backed by a
two-year international Rolex guarantee – continues to generate strong demand.
Market data highlights strong growth in Rolex Certified Pre-Owned within the
secondary luxury watch market, reflecting sustained client interest and a more
disciplined pricing environment relative to much of the broader market. Rolex
Certified Pre-Owned is only available in authorised Rolex distributors and can
also be transacted online.
A DISTINCTIVE COMPETITIVE ADVANTAGE FOR THE GROUP
Significant scale and trusted capability: We are among the largest operators
of pre-owned and Rolex Certified Pre-Owned globally. Our scale enables
breadth of choice, visibility and liquidity for clients. This is supported by
established sourcing processes and strong marketing reach across both physical
and digital channels. The Group’s dedicated luxury watch service centres in the
US and UK enable the Group to meticulously examine, repair and service
pre-owned watches in-house, improving turnaround times and margins.
The Group’s Rolex Certified Pre-Owned programme is available in 100% of its
Rolex agencies in the US (excluding the recently acquired Deutsch & Deutsch
showrooms) and 77% in the UK.
A consistent luxury retail experience: Pre-owned shop-in-shops reflect
the same high standards of new-watch retailing, supported by in-house servicing
capability, warranty backing and after-sales support. Presentation, quality and
service are consistent across the estate, including flagship locations such as
Rolex Old Bond Street, which acts as a centre of excellence for Rolex Certified
Pre-Owned, supporting education, presentation and client engagement at the
highest level.
A strong contributor to new-client acquisition: Pre-owned provides a secure
entry point for clients who value the assurance of an authorised retailer. The
combination of visible inventory, professional presentation, warranty protection
and access to specialist advice supports confidence at the point of purchase and
helps expand the Group’s client base, supporting long-term engagement.
Pre-owned is also a strong enabler for the watch collector community, offering
rare and discontinued pieces, broadening choice beyond the new watch portfolio.
Specialist expertise through Analog:Shift: Analog:Shift strengthens the
Group’s pre-owned proposition through specialist market knowledge, sourcing
expertise and a curated, provenance-led approach to pre-owned and vintage
watches, with the flexibility to respond quickly as client preference evolves,
supporting confidence in quality and authenticity.
Selective presentation: Inventory is presented selectively, reflecting the role
of scarcity and desirability in the luxury watch market, while maintaining access
to broader supply across the Group’s network.
Pre-Owned continues to be an important part
of our growth strategy, strengthening our luxury
watch proposition and deepening client engagement
across the US and UK. While the Group has
operated in the pre-owned category for many years,
the introduction of Rolex Certified Pre-Owned in
July 2023 significantly increased the maturity, visibility
and structure of the secondary luxury watch market.
STRATEGIC PILLAR 2:
PRE-OWNED
CASE STUDY:
ANALOG:SHIFT
Acquired in September 2020, Analog:Shift brings established expertise in
pre-owned and vintage watches. Its approach to sourcing, authentication and
provenance supports confidence in quality and authenticity, particularly for
collectors. This specialist capability strengthens the Group’s broader Pre-Owned
proposition and complements the authorised retail offer.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
40
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
41
PROVEN GROWTH ENGINE
The Pre-Owned category represents a substantial growth opportunity for the
Group – reaching clients who may previously have been hesitant to engage with
the open market and supporting longer-term relationships through a broader,
trusted offer. Our scale, reputation and established client base position the Group
as a leading operator of pre-owned in both the US and UK. Together with our
long-standing experience in pre-owned and vintage through Analog:Shift, this
enables the Group to offer a clear and comprehensive proposition across both
new and pre-owned watches.
Pre-owned continues to perform strongly for the Group and is firmly established
as our second largest luxury watch brand with further expansion and integration
across the estate planned. In FY19 less than 2% of the Group’s revenue was from
Pre-Owned, this is now heading towards 10%.
FY26 PROGRESS
– Pre-Owned is firmly established as the Group’s second largest luxury
watch category
– Rolex Certified Pre-Owned is available in 100% of the Group’s Rolex agencies
in the US (excluding the recently acquired Deutsch & Deutsch showrooms)
– Expanded the UK showrooms with Rolex Certified Pre-Owned to 30
– Exclusive client events showcasing pre-owned products
– Expanded sourcing avenues in the UK market
FY27 PRIORITIES
– Two additional Rolex Certified Pre-Owned locations in the UK (Glasgow
Rolex Boutique and Goldsmiths Chelmsford)
– Sale of Rolex Certified Pre-Owned through newly acquired Deutsch &
Deutsch showrooms in the US
– Continue to build awareness of the Pre-Owned category across marketing
and events
CASE STUDY:
ROLEX OLD BOND STREET
Rolex Certified Pre-Owned forms part of the offering at the Group’s Old Bond Street flagship, which opened in March 2025, with its own dedicated floor.
Clients are able to access authenticated, fully serviced pre-owned watches within a luxury retail environment that mirrors the standards of new-watch retailing.
Presentation, service and after-sales support follow the same approach, reinforcing confidence and demonstrating how pre-owned watches can be integrated
clearly and credibly within the showroom.
LINK TO KPIS
1
2
3
4
5
6
7
11
12
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
3
9
11
Read more on pages 64 to 68 and
142 to 147
OUR STR ATEGY
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
42
STRONGER OMNI-CHANNEL CAPABILITY
Our digital investments continue to enhance our multi-channel model. During
FY26, digital capability progressed further, supported by continued investment
in platform performance, content and service integration, which improved how
clients engage with the Group across channels.
In the US, the re-platforming of the Roberto Coin ecommerce site improved site
speed, resilience and user experience, driving growth and conversion. In parallel,
the Group expanded its US-based ecommerce team to support ongoing
optimisation and localisation, strengthening day-to-day trading performance.
In the UK, ecommerce continues to play an increasingly important role in client
research and pre-purchase engagement, enabling broader product discovery,
supporting online enquiries and appointment bookings, and strengthening the link
between digital engagement and showroom visits.
The Group also continues to strengthen integration across ecommerce, its
Luxury Watch and Jewellery Virtual Boutique, showrooms and after-sales
services. This includes improving the consistency of product information and
availability across channels, enhancing enquiry handling and appointment journeys,
and strengthening the tools and data that support colleagues in serving clients.
These developments support a more connected, service-led client experience
and provide clearer insight into the relationship between digital engagement
and showroom activity.
Across both markets, improved integration between our showroom and digital
channels supports:
– Client analytics with correlation between online research and showroom visits
– Editorial content driving client engagement in the category
– ‘By Personal Appointment’ – our enhanced appointment booking for
showrooms
– Luxury Watch and Jewellery Virtual Boutique client experience
– Web enabled sales – with real-time stock availability across showrooms,
enabling product to be sourced across the network to meet client demand
– Integrated after-sales support
– Click & Collect
The Group continues to enhance fulfilment capabilities that better connect
ecommerce with showroom operations, including ship from store. This supports
faster and more flexible fulfilment, improves stock access and availability for online
clients, and strengthens the Group’s ability to serve clients consistently across
channels while maintaining high presentation and service standards.
The Group is also incorporating AI tools to support both operational efficiency
and the client experience. During FY26, this included enhancements in areas such
as product content creation, trading analysis and fraud detection. Across the
Group, enhancements to fraud detection have improved the client experience by
increasing checkout authorisation rates and reducing friction for genuine clients,
while maintaining strong controls.
In FY27, the Group will continue to test and refine AI-enabled features that
support product discovery and purchasing decisions, including enhancements such
as dynamic merchandising and AI-powered search.
Together, these developments ensure that clients receive a consistently high
standard of service, however they choose to engage with us.
Ecommerce is a core part of our growth strategy for
the Group, supporting an increasingly multi-channel
luxury client journey and playing a critical role in
driving revenue growth and client engagement.
Our digital platforms extend product availability,
strengthen brand presentation and provide
integrated service capabilities, reinforcing our
position as a modern, digitally enabled luxury
retailer. Ecommerce complements our showroom
network and supports every stage of the client
relationship – from discovery and research through
to purchase and after-sales care.
STRATEGIC PILLAR 3:
ECOMMERCE
CASE STUDY:
VIRTUAL BOUTIQUE
The Luxury Watch and Jewellery Virtual Boutique comprises of fully trained
sales professionals who bridge the gap between the showroom experience
and online. Offering real-time expert advice and guidance, our in-house
experts guide clients through their own personalised shopping experience
from the comfort of their own home or office. This includes personalised
pre-owned consultations, after-sales or help with selling pre-owned watches
to the Group.
Our Visiodome experience uses high-definition cameras with studio quality
lighting to enable clients to fully appreciate the intricate mechanisms of a luxury
watch or the fine detail of a high-end piece of jewellery.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
43
OUR STR ATEGY
CONTINUED
FY26 PROGRESS
– Group ecommerce sales were +21% versus prior year (constant currency),
following the investment in US ecommerce
– Re-platforming of select US websites, improving performance, stability and
user experience
– Expansion of the US ecommerce team to support localisation and ongoing
optimisation
– Deployment of AI agents to improve efficiency, including support for AI
generated product descriptions (with appropriate human review) and faster
reporting to spot near real-time trading trends
– Improved UK checkout authorisation rate by around 11% through the use of
AI fraud detection, reducing friction for genuine customers while maintaining
strong controls
– Launch of the upgraded Hodinkee app in April 2026, to drive client loyalty and
allow Hodinkee followers to transact directly with Watches of Switzerland
– Launch of the ‘Curated by Hodinkee’ collection on Watches of Switzerland US
– Ongoing advancement of fulfilment and service capabilities across channels,
including ship from store expansion
FY27 PRIORITIES
– Platform optimisation and resilience: continue to improve site speed, stability
and release discipline across US and UK platforms, with clear performance
KPIs and incident management
– Trading and conversion: deepen merchandising, search and navigation, on-site
content and personalisation to improve conversion and support high-value
journeys, including appointment-led intent and enquiry capture
– Omni channel journeys: strengthen links between online research and
showroom outcomes through improved appointment booking, lead
management, stock visibility and consistent product information across channels
– Data and reporting: improve data quality, product attributes and structured
feeds, while enhancing reporting capability to identify near real-time trading
trends and opportunities and to better connect digital activity with
showroom outcomes
– AI enablement: expand the use of AI agents across teams to improve
efficiency in content production and day-to-day analysis, with appropriate
human review and controls
– Digital capability enhancements (US): enable a range of improvements across the
ecommerce platform, including areas such as dynamic merchandising and search,
as priorities are refined to support trading performance and client engagement
– Future-ready client experiences (UK): enhance our existing virtual try-on tool
through AI-enabled augmented reality features embedded within the product
gallery, alongside the development of onsite tools to support clients through
discovery, comparison and purchase decisions, governed by clear testing and
brand standards
CASE STUDY:
HODINKEE AND DIGITAL ENGAGEMENT
Hodinkee has become the go-to, global destination for luxury watch
enthusiasts offering digital print and video content, and limited edition watch
collaborations alongside watch and jewellery insurance services.
Acquired by the Group in October 2024, Hodinkee attracts a growing,
engaged audience, with 56.1 million views annually and 1.8 million social media
followers. Hodinkee strengthens the Group’s client engagement and broadens
our digital reach. As a well-established editorial platform within the luxury
watch community, Hodinkee provides specialist insight, collector credibility
and a highly engaged audience.
In April 2026, Hodinkee launched an upgraded app for its global community
of watch enthusiasts. The app allows readers to move directly from editorial
content to shopping with Watches of Switzerland, without leaving the app.
This functionality is supported by our ecommerce re-platforming, enabling a
direct connection between editorial content and retail platforms. This provides
a clearer connection between content, discovery and purchase, and creates
a platform to introduce Hodinkee readers to our retail offering over time.
MARKET LEADERSHIP AND GROWTH OPPORTUNITY
In the UK, we are the market leader in multi-brand luxury watch and jewellery
retailing, with ecommerce representing an established and meaningful part of sales.
In the US there is no clear market leader, providing a significant opportunity to
step into that position. Ecommerce currently represents a smaller proportion of
sales in the US, highlighting a significant runway for growth. In order to capitalise
on this opportunity, we have invested in a dedicated ecommerce team within the
US market, expanded our distribution centre capabilities and enhanced our
Roberto Coin US ecommerce site, improving client dwell time and conversion,
with the Watches of Switzerland, Mayors and Betteridge sites to follow.
LINK TO KPIS
1
2
3
4
5
6
7
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
5
9
Read more on pages 64 to 68 and
142 to 147
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
44
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
45
OUR STR ATEGY
CONTINUED
A GROWING OPPORTUNITY
Luxury Branded Jewellery provides a clear opportunity for continued expansion.
We have built a strong jewellery business, and as clients increasingly seek
recognisable, design-led brands, we are well positioned to strengthen our
presence across this category.
To support this, we are investing in enhanced jewellery environments. During FY26,
we opened our first dedicated jewellery-only showroom – the Mappin & Webb
Luxury Jewellery boutique in Manchester. This boutique provides geographical
exclusivity for several luxury jewellery brands and strengthens our ability to elevate
category presentation beyond London.
These developments reinforce our platform for growth in a category where
design, brand identity and product distinction are becoming increasingly
important to clients.
STRENGTHENING OUR BRAND PORTFOLIO
We continue to build our luxury branded jewellery portfolio to support growth
across this category, to capitalise on the shift in consumer demand to branded
product. To meet this demand, we continue to broaden our offering. Recent
additions such as De Beers and two further David Yurman agencies in the UK
strengthen our presence in contemporary and design-led luxury jewellery.
This expanded assortment, together with upgraded showroom formats and
improvements in digital capability, provides a strong foundation for continued growth.
ROBERTO COIN INC.
The acquisition of Roberto Coin Inc. represented a significant milestone in our
jewellery strategy. Roberto Coin is a leading luxury jewellery brand in the US,
with distribution across more than 400 points of sale, providing a meaningful
platform in the world’s largest luxury jewellery market.
The acquisition provides the Group with:
– Exclusive and perpetual distribution rights across the US, Canada, Central
America and the Caribbean
– A high-performing brand aligned with global trends in branded jewellery
– Established relationships with major department stores, jewellery chains
and independents
– Strong brand equity and a product range that complements our showroom
and ecommerce capabilities
Roberto Coin Inc. has performed well since acquisition, supported by positive
sell-out and strong feedback from its retail partners. This momentum has been
supported by increased investment in the Roberto Coin brand globally, including
the appointment of Dakota Johnson as global brand ambassador, alongside
enhancements to brand presentation and alignment across collections.
Roberto Coin Shop-in-Shop Concept
The Roberto Coin brand is available across our Mayors and Betteridge
showrooms in the US and Goldsmiths and Mappin & Webb in the UK. In the US,
we have implemented fully branded shop-in-shop areas for Roberto Coin,
increasing the space and visibility of the brand and product lines. This new concept
has led to a more than doubling of sales for Roberto Coin in these locations.
The next step is to use this proven concept with our wholesale partners in the
US, increasing space and visibility of the brand within their network and in turn
increasing client engagement and sales.
Luxury Branded Jewellery is a core part of our growth strategy for the Group. While
jewellery has long been part of our offering, the market has traditionally been shaped by
family jewellers and unbranded product. Recently, there has been a clear consumer demand
shift towards branded, design-led jewellery, with branded pieces taking an increasing share
of the global market. This shift aligns closely with our strengths in brand partnerships,
showroom presentation and client service.
STRATEGIC PILLAR 4:
LUXURY BR ANDED
JEWELLERY
New shop-in-shop concept for Roberto Coin in Mayors showrooms
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
46
Mayors Aventura, Miami Roberto Coin client event
Roberto Coin mono-brand boutiques
The Group has opened dedicated Roberto Coin mono-brand boutiques within
its showroom network, creating focused environments for the brand’s collections.
These boutiques support deeper client engagement and allow the brand to be
presented in line with its positioning within the wider luxury jewellery market,
reflecting increased investment in brand positioning and presentation globally.
In FY26, the Group opened three Roberto Coin mono-brand boutiques in Hudson
Yards, New York; Forum Shops at Caesars Palace, Las Vegas; and Miami Design
District, Florida. A further boutique in Tampa, Florida is due to open in FY27.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
47
OUR STR ATEGY
CONTINUED
Roberto Coin boutique, Miami Design District, Florida
Roberto Coin boutique, Miami Design District, Florida
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
48
Roberto Coin boutique, Hudson Yards, New York
CASE STUDY:
MAPPIN & WEBB LUXURY JEWELLERY BOUTIQUE
In FY26, the Group opened the Mappin & Webb Luxury Jewellery boutique in Manchester, its first dedicated jewellery-only showroom.
The boutique provides an enhanced setting for branded jewellery and supports stronger presentation of the category in a key regional city.
FY26 PROGRESS
– Implemented a shop-in-shop concept for Roberto Coin in Mayors, leading
to a revenue increase of 186%
– Opened three Roberto Coin mono-brand boutiques
– Re-launch of Roberto Coin ecommerce site and global marketing campaign
with Dakota Johnson as global brand ambassador
– Roberto Coin wholesale revenue +22% at constant currency
– Luxury jewellery retail sales in US +32% and UK +12% vs prior year at
constant currency
– Opening of the Mappin & Webb Luxury Jewellery boutique, Manchester
– Expanding the portfolio of luxury jewellery brands to include David Yurman,
Annoushka and De Beers in the UK
– Introduction of lab-grown diamonds into Goldsmiths
FY27 PRIORITIES
– Opening of the new Roberto Coin mono-brand boutique in Tampa, Florida
– Re-platforming of selected ecommerce sites
– Expanding space with wholesale partners through the application of
dedicated shop-in-shops
– Introduction of lab-grown diamonds into Mappin & Webb and Mayors,
together with range expansion in Goldsmiths
LINK TO KPIS
1
2
3
4
5
6
7
8
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
9
Read more on pages 64 to 68 and
142 to 147
Mappin & Webb Luxury Jewellery boutique, Manchester
Roberto Coin marketing
During FY25 and FY26, there was increased investment in marketing for
Roberto Coin in the US, including a campaign featuring Dakota Johnson as
global brand ambassador. Several client events were also held across the US
to showcase product, and a number of key clients attended the ‘Roberto Coin
Venetian Ball’ in Venice.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
49
US EXPANSION:
OUR STR ATEGY
CONTINUED
Our approach focuses on acquiring showrooms already anchored by our key
luxury watch brand partners, or locations where brand support is confirmed
as part of the acquisition. This provides certainty around sales productivity,
underpins payback and supports a resilient long-term revenue base.
EXECUTING A DISCIPLINED GROWTH STRATEGY
We apply clear and disciplined financial criteria to all acquisitions. Our typical
parameters include:
– Historical payback periods of 4-4.5 years, including associated capital spend
– A defined path to performance improvement, leveraging the Group’s expertise,
resources and systems, enhanced brand mix through strong relationships, an
elevated client experience and the realisation of cost synergies
This disciplined approach supports our long track record of successful acquisitions
and ensures each transaction contributes meaningfully to long-term value creation.
ACCELERATING OUR US PRESENCE
Strategic acquisitions have been central to expanding our presence in the US,
the world’s largest luxury watch market, and one that remains underinvested
and highly fragmented. A significant proportion of the market remains in the
hands of small, independent retailers, while leading brands have continued to
rationalise their retail networks and concentrate product distribution among
fewer, higher-quality partners.
Acquisitions are a core part of our growth strategy
for the Group and play an important role in our
long-term growth. They enable us to expand our
showroom network, strengthen access to leading
luxury watch brands and deepen our presence in
key markets – particularly in the US, where we have
built a substantial footprint through the acquisition
of high-quality, brand-aligned luxury watch and
jewellery retailers.
STRATEGIC PILLAR 5:
ACQUISITIONS
Our US expansion has been shaped by:
– Acquiring multi-brand luxury watch and jewellery retailers with strong
regional reputations
– Delivering improvements in showroom environments and operational
performance
– Deepening collaboration with Rolex, Patek Philippe and other leading brands
across acquired locations
– Maintaining a strong pipeline of opportunities in high-potential markets
2017
MAYORS
WYNN
MINNEAPOLIS
ANALOG:SHIFT
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
50
This strategy has enabled the Group to build a network of Rolex-anchored
showrooms across major US cities – now totalling 24 locations following our
most recent acquisition of a majority stake in Deutsch & Deutsch – reflecting the
ongoing concentration of distribution among fewer, higher-quality retail partners
in the US market.
The chart opposite demonstrates our growth in the US, which reflects a
combination of acquisitions, improvements made to those businesses through
investment and new projects. Since entering the US market just over eight years
ago, the business has surpassed $1 billion in revenue and is now the largest part
of the Group.
2026
BETTERIDGE
HODINKEE
ROBERTO COIN INC.
PLANO
MARLTON
DEUTSCH & DEUTSCH
US REVENUE GROWTH SUPPORTED BY ACQUISITIONS
38%
23%
39%
Acquisitions prior 12 months
Growth post acquisition
New projects & ecommerce
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
51
OUR STR ATEGY
CONTINUED
CASE STUDY:
HODINKEE
The Hodinkee business was acquired
to add specialist digital and editorial
capability alongside the Group’s
retail operations. The business
provides access to a highly engaged
global audience and supports client
engagement beyond the point of
sale. This acquisition reflects the
Group’s disciplined approach to
expanding capability where it
supports long-term strategy.
CASE STUDY:
MAYORS
Acquired in 2017, Mayors provides
a clear example of the Group’s
long-term approach to acquisitions.
Since acquisition, the Group has
invested steadily to upgrade
previously under-invested
showrooms and improve operational
performance. This has strengthened
brand relationships and supported
the development of a high-quality
retail estate across key US markets,
driving sustained revenue
growth through improvements
in showrooms, client service,
brand line up and marketing.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
52
FY26 PROGRESS
Deutsch & Deutsch
In January 2026, the Group announced the acquisition of a majority stake
in Deutsch & Deutsch, a family-owned luxury watch and jewellery retailer
operating four showrooms in Texas: El Paso, Laredo, McAllen and Victoria.
The business is an authorised partner for a strong roster of brands, including
Rolex, Roberto Coin, Cartier, OMEGA, TUDOR, TAG Heuer, Breitling and
IWC Schaffhausen.
Deutsch & Deutsch brings:
– Four luxury showrooms, two of which have recently been expanded
and refurbished
– Strong regional brand equity, with showrooms continuing to trade under
the Deutsch & Deutsch name
– A broad category offering, including luxury jewellery brands such as
Roberto Coin
– Experienced leadership, with Tad and Aladar Deutsch remaining invested
and operational in the business post-acquisition
– The business contributed revenue of £16.4 million from the acquisition date
to 3 May 2026
Initial integration is progressing well, and the acquisition is expected to deliver
returns in line with our established model. There are opportunities to deliver
growth in Deutsch & Deutsch through the expansion of ecommerce and
introduction of Rolex Certified Pre-Owned, along with the expansion and
refurbishment of the remaining two showrooms.
FY27 PRIORITIES
– Leverage acquisition opportunities in the fragmented US market
CASE STUDY:
PLANO, TEXAS
In October 2021, the Group
acquired the Timeless luxury watch
showroom in Plano, Texas. This
showroom had exclusivity for luxury
watches within a highly trafficked
mall, but did not have the authorised
line-up of brands that the Watches
of Switzerland Group would typically
cover. Ahead of acquisition, the
Group leveraged its strong brand
relationships to agree an expansion
of brand line-up with key partners
following an expansion of space. This
is an example of how the Group can
utilise its brand relationships to
improve existing showrooms and
drive additional value.
CASE STUDY:
BETTERIDGE
The Betteridge business was acquired to strengthen the Group’s presence
in affluent regional markets with strong brand support. The business continues
to operate with a local focus, while benefiting from the Group’s systems, scale
and brand relationships. Against this backdrop, strong demand for our key
brands, together with our proven retail model and high standards of service,
continues to create opportunities to bring well-established independent
retailers into the Group and elevate their performance.
Since acquisition, the Group has expanded the Betteridge Greenwich
showroom to include a dedicated Patek Philippe room. During FY27, the
existing space is being renovated, to expand representation for key brands
and to provide the modern, luxurious, hospitality-led environment the Group
is known for. In FY25, the Betteridge Vail, Colorado showroom was expanded,
leaving only Betteridge Aspen, Colorado in its existing space. During FY27,
the Betteridge ecommerce site will be upgraded and re-platformed.
LINK TO KPIS
1
2
3
4
5
6
7
9
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
3
9
10
Read more on pages 64 to 68 and
142 to 147
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
53
CASE STUDY:
CLIENT EVENTS
OUR STR ATEGY
CONTINUED
ELEVATING OUR EXPERIENCE THROUGH XENIA
Xenia is our Group-wide framework for client experience. It provides structure
and consistency across the business through three guiding principles: Know Me,
Wow Me, Remember Me. Xenia helps our teams anticipate client needs, offer
personalised support and deliver a level of service that reflects our luxury
positioning. Not only does this drive financial results but it also enhances client
loyalty and creates passionately engaged clients.
Over the past year, we have strengthened Xenia, introducing an enhanced
approach referred to as Xenia 2.0, using insights from the flagship Rolex boutique
on Old Bond Street. This showroom continues to perform strongly, supported by
a high standard of hospitality, deep product knowledge and personalised service.
These learnings – spanning client engagement, client experience and showroom
layout – have been codified through our in-house bespoke training programmes
and rolled out across 32 UK Rolex agencies, supporting consistent service delivery
across the estate.
A rigorous mystery shop programme continues to support client experience,
with FY26 delivering our strongest results to date across the Group’s showroom
network. In the US we have launched an enhanced client experience evaluation
programme, focusing more deeply on the experiential and emotional drivers of
performance by incorporating behaviour-led measures such as personalisation,
emotional impact and lasting brand impression.
These enhancements reinforce our position as a valued partner to the world’s
leading luxury watch and jewellery brands and ensure that client experience
continues to meet rising expectations.
A CONSISTENT EXPERIENCE ACROSS
CHANNELS
Our approach to client experience extends across
all areas of the business.
In-showroom hospitality
– Luxury environments designed for browsing
and hospitality
– Highly trained client specialists
– Personalised support across luxury watches,
jewellery and pre-owned
– Integrated after-sales advice and care
Online and omni-channel
– Digital platforms that present brands and
craftsmanship clearly
– Tailored online experiences and product
recommendations, including the Luxury Watch
and Jewellery Virtual Boutique consultations that
support personalised client engagement
– Editorial integration through Hodinkee to support
learning and discovery
– Clear correlation between online research
and showroom appointments
Relationship-led clienteling
– Personalised communications, events and previews
– Strong understanding of client preferences
– Long-term client relationships
– Exclusive client events and dinners held across
the US and UK, including at iconic venues, to
strengthen relationships and deepen engagement
Client Experience is a core part of the Group’s strategy and operating
model and shapes how we serve clients across the business. It defines how
we welcome, advise and support clients across showrooms, online channels,
events and after-sales care. Whether a client is purchasing their first luxury
watch or is an established collector, our aim is to deliver a consistent,
high-quality experience that reflects the standards of our brand partners
and our position in the luxury retail market.
Client Experience remains one of our strongest differentiators and underpins
our long-term growth strategy.
STRATEGIC PILLAR 6:
CLIENT EXPERIENCE
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
54
The Group regularly hosts exclusive events for clients in partnership with its brand partners. During the year, this included a Rolex-hosted client event featuring
Roger Federer, providing clients with access to brand ambassadors and reinforcing the strength of the Group’s relationship with one of its most important partners.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
55
OUR STR ATEGY
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
56
FY26 PROGRESS
– Rolex Old Bond Street Net Promoter Score of 94%
– Continued to deliver a strong programme of events, focused on commercial
events, brand hospitality and selected brand experiences
– The US ‘Lasting Impression’ dimension achieved a 91% score from over 400
evaluations spanning three campaigns
– Delivered a flagship leadership summit in partnership with a prestigious brand
partner, centred on elevating client experience and coaching capability. The
two day immersive programme represented a significant investment in
training hours across the leadership population
– At this year’s US Rolex Summit, we worked in partnership with Rolex to
launch a new leadership coaching programme across our Official Rolex
Jewellers in the US, a first for the brand
– Client hospitality has been undertaken in partnership with key brand
partners to provide experiences for VIP clients at exclusive events across
the US and UK
– Manufactures visits continue to be successful in developing our horological
business with visits across many key partner brands. This continues to be
an opportunity to obtain access to one-of-a-kind and rare timepieces of high
value and to build client loyalty
– Formalised engagement with Roberto Coin Brand Ambassadors through
a recurring insights forum, supporting luxury jewellery strategy and
sales performance
FY27 PRIORITIES
– Introduction of a Net Promoter Score programme across US Rolex
showrooms to assess the Registration of Interest, purchase, and after-sales
service experiences and strengthen our ability to capture actionable client
feedback at scale
– Launching initiatives aimed at elevating the client experience
– Roll-out of the Rolex Old Bond Street approach across all remaining UK
Rolex-anchored showrooms
– After-sales providing direct access to watchmakers and reinforcing
best-in-class after-care
– Enhanced data insight and analytics to support more effective clienteling
LINK TO KPIS
1
2
3
4
5
6
7
10
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
6
7
8
9
Read more on pages 64 to 68 and
142 to 147
“Collecting watches is about much more
than purchasing a timepiece – it is about
the experience, the relationships, and the passion
that surrounds the brand.”
Watches of Switzerland and Porsche Design event with Orlando Bloom
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
57
Las Vegas represents a strategically important luxury retail market, combining high-spending
international tourism with a strong base of repeat visitors and a growing position as a global
entertainment and sporting destination. The Group’s presence within the Wynn Resort –
the luxury epicentre of the Las Vegas Strip – provides access to a highly valuable client base,
including a strong proportion of collectors and repeat customers.
STRATEGY IN ACTION
SPOTLIGHT ON
LAS VEGAS
58
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
Las Vegas has continued to evolve, with sustained investment
in major attractions such as the Sphere and AREA15, alongside
global sporting events including Formula 1 and the Super Bowl.
With approximately 38.5 million annual visitors, and a significant
proportion from younger, high-spending demographics, the market
provides an attractive opportunity for long-term growth. This is
reflected in the continued investment into the Wynn Resort, which
is strengthening its position as a leading luxury destination within
the Las Vegas market.
Following the acquisition of two showrooms at the Wynn Resort
in 2017 and the securing of exclusivity for watch retailing within
the resort, the Group has executed a programme of targeted
investment to enhance its presence and fully capitalise on the
opportunity within this market.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
59
STRATEGY IN ACTION
CONTINUED
The Wynn Resort, Las Vegas: Watches of Switzerland multi-brand showroom prior to investment
The Wynn Resort, Las Vegas: Watches of Switzerland multi-brand showroom following investment
AFTER
BEFORE
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
60
SHOWROOM INVESTMENT AND BRAND PRESENTATION
The Group has undertaken significant investment to elevate both its multi-brand
and mono-brand environments. This includes the relocation and expansion of the
multi-brand showroom to improve visibility, flow and product presentation, bringing
the Group’s modern approach to luxury retailing into this high-profile destination.
This has been complemented by the expansion of the Rolex boutique to
approximately 4,000 sq ft, enabling representation of the brand to the highest
standard. The introduction of Rolex Certified Pre-Owned in 2024 has further
strengthened the offer, and since launch, it has become the second-largest
revenue brand within the multi-brand showroom.
Rolex boutique, The Wynn Resort, Las Vegas
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
61
STRATEGY IN ACTION
CONTINUED
BRAND PARTNERSHIPS AND CATEGORY EXPANSION
Through strong brand partnerships and investment in its showroom estate,
the Group has expanded the breadth and quality of its offering in Las Vegas.
Las Vegas has become the centre of the Group’s niche and independent brand
offering in the US, including brands such as Jacob & Co, MB&F and Bovet,
reflecting the high number of collectors travelling to the market. Independent
brand sales are +1,621% compared to the first full year post-acquisition.
The Group has also leveraged its exclusivity within the Wynn Resort to introduce
mono-brand boutiques, including OMEGA and Breitling, the top performing
locations for each brand within the Group’s US network. In FY26, the Group
further expanded its presence in the Las Vegas market with the opening of a
Roberto Coin boutique in The Forum Shops at Caesars Palace, strengthening
its luxury branded jewellery offering.
Within the Wynn Resort, the Group will build on this momentum in FY27 with
the introduction of a Roberto Coin pop-up, expanding its jewellery presence
in this key location.
Watches of Switzerland multi-brand (above), OMEGA and Breitling boutiques (below), the Wynn Resort, Las Vegas
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
62
CLIENT EXPERIENCE AND ENGAGEMENT
Delivering a differentiated client experience is central to the Group’s success in
Las Vegas. The retention of local expertise following acquisition, combined with
the Group’s clienteling capabilities, including Xenia, has enabled strong client
relationships and high levels of repeat engagement.
This is reflected in the continued contribution of key colleagues from the
original acquisition. Michael Ryan, Head of Watches at the Wynn Resort,
joined the business with eight years’ experience and has since spent a further
nine years with the Group. Michael has played a central role in the development
of the Las Vegas business and now manages ten showrooms with the Group,
demonstrating the strength of local expertise and career development
opportunities within the organisation.
Las Vegas is also a key location for client events, reflecting both its global
destination status and a strong base of returning clients. In FY26, the Group
hosted several events for VIP and returning clients, further strengthening
engagement and repeat purchases, demonstrating the effectiveness of the
Group’s relationship-led approach.
Since acquisition, the Wynn Resort and Las Vegas boutiques have consistently
ranked in the top national percentile for overall client experience, including
multiple first-place and top three national placements within the Group’s internal
evaluation programme, reflecting sustained execution and service quality.
FINANCIAL PERFORMANCE AND RETURNS
The Group’s strategy in Las Vegas has delivered strong financial outcomes. Since
acquisition, sales have increased by 341%, with showroom EBITDA up 664%, and
a cash payback period of 3.8 years. FY26 EBITDA represented approximately
120% of the original purchase price.
These results demonstrate the effectiveness of the Group’s approach to capital
allocation, combining showroom investment, brand partnerships, category
expansion and client experience to drive sustainable growth in a strategically
important market. Together, this represents a clear example of the Group’s
strategy in action, delivering strong returns through disciplined investment
and consistent execution across multiple growth pillars.
Client events and hospitality experiences drive engagement and repeat business
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
63
HOW THE GROUP
MEASURES PERFORMANCE
Key Performance Indicators (KPIs) are designed to measure the development, performance and position of the business.
Certain KPIs are Alternative Performance Measures (APMs). The Directors use these measures as they provide
additional useful information and analyses on the underlying trends, performance and position of the Group. The APMs
are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs. These measures
are not intended to be a substitute for, or superior to, IFRS measures.
KEY PERFORMANCE INDICATORS
FINANCIAL PERFORMANCE
REVENUE
PERFORMANCE (£ MILLION)
1,537.9
1,651.5
1,542.8
1,238.0
1,827.9
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Revenue is stated exclusive of sales taxes and is
measured in accordance with IFRS 15 ‘Revenue from
contracts with customers’.
Growing revenue is key to our business strategy.
OPERATING PROFIT
PERFORMANCE (£ MILLION)
178.6
142.1
120.0
113.9
170.0
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Operating profit is presented on the face of the
Consolidated Income Statement representing Profit/
Earnings Before Interest and Taxation.
Growing profit is key to our business strategy.
ADJUSTED EBIT
PERFORMANCE (£ MILLION)
165.1
130.3
134.7
149.7
154.8
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Operating profit before exceptional items and IFRS 16
impact. This is a measure of profitability that excludes
one-off exceptional items and IFRS 16 adjustments to
allow for comparability between years.
This measure is defined as segment profit under
IFRS 8 ‘Operating segments’ and is reconciled to Profit
Before Taxation on an IFRS basis in note 2 to the
Consolidated Financial Statements.
Growing profit is key to our business strategy.
This measure was linked to the performance target
for the Executive Directors’ FY26 annual bonus.
Further detail can be found in the Remuneration
Committee Report on page 184.
£1,827.9
£170.0
£154.8
COMMENTARY
Group revenue increased 13% versus the prior
period in constant currency (+11% reported), with
UK +5%, US retail +25% in constant currency
(+19% reported), and US wholesale +22% in
constant currency (+16% reported).
Further details on the revenue performance in the
year can be found in the Financial Review section
on pages 69 to 74.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
8
9
COMMENTARY
Operating profit increased by 49% in the year,
ahead of revenue growth. The reported number is
after the impact of £8.8 million of exceptional costs
(see note 4 in the Consolidated Financial
Statements for details).
Further details on profit performance in the year
can be found in the Financial Review section on
pages 69 to 74.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
8
9
10
COMMENTARY
Adjusted EBIT increased by 3% versus the prior
year, behind revenue growth.
Further details on profit performance in the year
can be found in the Financial Review section on
pages 69 to 74.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
8
9
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
64
PRINCIPAL RISKS AND UNCERTAINTIES
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
10
Financial and treasury
11
Climate change
1
Business strategy execution and
development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
BASIC EARNINGS PER SHARE
PERFORMANCE (p)
51.2
25.0
22.8
42.6
42.2
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Basic Earnings Per Share (EPS) is a statutory measure
defined by IAS 33. EPS is a direct measure of
profitability per share held in the Group.
Growing Basic EPS is key to our business strategy.
ADJUSTED EARNINGS PER SHARE
PERFORMANCE (p)
52.7
38.0
41.6
41.8
45.2
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Basic EPS adjusted for exceptional items as disclosed
in note 4 to the Consolidated Financial Statements.
This measure is reconciled to statutory measures in
note 9 to the Consolidated Financial Statements.
This is a measure of profit per share held in the Group,
excluding exceptional items and IFRS 16 adjustments.
This presents the Group’s underlying performance
without distortion from one-off or non-trading events
to provide comparability between years.
Growing Adjusted EPS key to our business strategy.
This measure is linked to the Executive performance
target for the LTIP incentives.
Further detail can be found in the Remuneration
Committee Report on page 184.
RETURN ON CAPITAL EMPLOYED
PERFORMANCE (%)
27.9%
19.5%
19.0%
27.4%
18.0%
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Return on Capital Employed (ROCE) is defined as
Adjusted EBIT divided by average capital employed.
Average capital employed is total assets less current
liabilities on a pre-IFRS 16 basis. The calculation for
ROCE is included in the Glossary on page 263, where a
reconciliation to post-IFRS 16 ROCE can also be found.
ROCE demonstrates the efficiency with which
the Group utilises capital, and is key to our
business strategy.
This measure is linked to the Executive Directors’
performance target for the LTIP incentives. Further
detail can be found in the Remuneration Committee
Report on page 185.
42.6
45.2
18.0%
COMMENTARY
Basic EPS has increased from 22.8p to 42.6p in
the year, reflecting the increased profitability in
the year (inclusive of exceptional costs detailed in
note 4 in the Consolidated Financial Statements).
For further detail please refer to note 9 in the
Consolidated Financial Statements.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
8
9
10
COMMENTARY
Adjusted EPS has increased from 41.6p in the
prior year to 45.2p in the current year, reflecting
the increased underlying profitability in FY26.
For further detail please refer to note 9 in the
Consolidated Financial Statements.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3
4
8
9
10
COMMENTARY
ROCE has reduced by 100bps to 18.0% in the
year. Whilst Adjusted EBIT has increased versus
the prior year, the decrease is reflective of the
higher average capital employed to achieve this.
Further details on performance in the year can
be found in the Financial Review section on
pages 69 to 74.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
3 8
10
STRATEGIC PILLARS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
65
FINANCIAL PERFORMANCE
CASH GENERATED FROM
OPERATIONS
PERFORMANCE (£ MILLION)
239.2
225.5
214.1
186.6
277.6
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Cash generated from operations is defined under
IAS 7 ‘Statement of Cash Flows’. This is a direct
measure of cash generation from the operations
of the business excluding financing, investing, tax
and defined benefit pension contributions.
AVERAGE RETAIL SELLING PRICE
PERFORMANCE
Luxury watches
Luxury jewellery
12,456
13,203
6,035
6,675
11,911
13,079
11,432
6,830
5,253
6,099
US ($)
FY26 FY25 FY24 FY23 FY22
KEY PERFORMANCE INDICATORS
CONTINUED
Luxury watches
Luxury jewellery
5,463
5,561
5,902
5,681
1,440
5,021
1,453
1,508
1,318
1,438
UK and Europe (£)
£277.6
COMMENTARY
Cash generated from operations increased by
£63.5 million to £277.6 million in the year.
Further details on cash flow performance in the
year can be found in the Financial Review on pages
69 to 74.
LINK TO STRATEGIC PILLARS
1
2
3
4
5
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
8
10
DEFINITION AND PURPOSE
Average retail selling price (ASP) represents gross
revenue generated in the period from sales of the
category, divided by the total number of units of such
products sold during the period. This metric is a
measure of sales performance.
Luxury watches and luxury jewellery are defined in
the Glossary on page 262, which also details the
change in definition of luxury watches which has been
applied in the current and prior periods.
COMMENTARY
The data reflects the ASP changes seen in the
year as a result of the mix of products sold in
each geography, and the impact of pricing changes.
LINK TO STRATEGIC PILLARS
1
4
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
66
NUMBER OF SHOWROOMS
PERFORMANCE
193
223
208
191
Total
171
FY26 FY25 FY24 FY23 FY22
COLLEAGUE ENGAGEMENT SURVEY
MOST RECENT PERFORMANCE
81%
76%
70%
86%
See commentary
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Strong engagement is an important indicator of
culture, retention, productivity and ultimately
business performance.
The FY25 prior year was the first year that we
partnered with Great Place To Work
®
and
completed the related employee survey.
Comparative survey results are therefore not shown
on a like for like basis.
NON-FINANCIAL PERFORMANCE
146
167
148
126
131
47
56
60
65
40
UK and Europe
US
191
70%
DEFINITION AND PURPOSE
Number of showrooms at the end of the financial
year. This metric demonstrates the Group’s size
and scale.
COMMENTARY
In the US, the Group opened four, acquired four,
and closed three showrooms. In the UK and
Europe, the Group opened one new showroom,
and closed 23 showrooms. The closures have
taken place as we continually assess our
operations to remain as efficient and productive
as possible.
Our 191 showrooms include 81 dedicated
mono-brand boutiques.
LINK TO STRATEGIC PILLARS
1
5
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
1
2
4
11
COMMENTARY
During this period, we have focused on
implementing the actions as a result of our last
Colleague Engagement Survey, supported by
smaller ‘pulse’ surveys in departments. We were
pleased to be recognised in the Great Place To
Work
®
index in the UK Large Employer category
in 2025. This accolade demonstrates our
commitment to create a positive employee
experience and an enjoyable working environment.
We will undertake our next Group-wide
Colleague Engagement Survey in FY27 and the
results will be published at a later date. Further
detail can be found in the Environmental, Social
and Governance section on page 91.
LINK TO STRATEGIC PILLARS
6
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
4
11
PRINCIPAL RISKS AND UNCERTAINTIES
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
10
Financial and treasury
11
Climate change
1
Business strategy execution and
development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
STRATEGIC PILLARS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
67
ESG – CARBON EMISSIONS
PERFORMANCE (tCO
2
e)
0.0025
0.0026
0.0029
Scope 1 and 2 intensity ratio
(tCO
2
e per £'000 revenue)
FY24
FY23
FY
22
FY25
FY26
0.0026
0.0023
ESG – CIRCULARITY
PERFORMANCE (%)
44%
46%
45%
45%
39%
FY24
FY25
FY23
FY
22
FY26
DEFINITION AND PURPOSE
Supporting circularity of luxury watches, measured
by the number of watches repaired, serviced or
resold as a percentage of the number of new watch
sales. This metric aligns to our sustainability pillars.
KEY PERFORMANCE INDICATORS
CONTINUED
NON-FINANCIAL PERFORMANCE
1,848
1,875
2,038
1,723
2,385
1,929
1,855
2,060
UK and Europe
US
2,505
2,203
3,866
4,314
Total
3,598
4,360
4,263
FY26 FY25 FY24 FY23 FY22
39%
DEFINITION AND PURPOSE
The Board has made a commitment to aim to
achieve net-zero emissions by 2050. This KPI
reflects the Group’s near-term commitment to
reduce Scope 1 and 2 carbon emissions by 50%
by 2030. The KPI reported is the total gross
Scope 1 and Scope 2 emissions (tCO
2
e).
In January 2026, the Science-Based Targets
initiative (SBTi) provided external validation
of our near-term emissions reduction target.
COMMENTARY
Combined Scope 1 and 2 carbon emissions have
decreased by 2% in the year. Further details can
be found in the Environmental, Social and
Governance (ESG) section on page 99.
LINK TO STRATEGIC PILLARS
1
2
LINK TO PRINCIPAL RISKS
AND UNCERTAINTIES
7
8
9
11
COMMENTARY
This indicator links to our goal to extend the life
of luxury watches.
The ratio has decreased, despite significant
growth in pre-owned in both the US and UK
in the year, due to the relative increase in new
watch sales and a reduction in repair volumes
in line with market conditions.
LINK TO STRATEGIC PILLARS
2
LINK TO KEY PRINCIPAL RISKS
AND UNCERTAINTIES
8
9
11
PRINCIPAL RISKS AND UNCERTAINTIES
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
10
Financial and treasury
11
Climate change
1
Business strategy execution and
development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
STRATEGIC PILLARS
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
68
ANDERS ROMBERG
CHIEF FINANCIAL OFFICER
An extract of the Group’s Consolidated Income Statement is
shown below which is presented including IFRS 16 ‘Leases’ and
exceptional items.
Income Statement – post-IFRS 16
and exceptional items (£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
Revenue 1,827.9 1,651.5 11%
Operating profit 170.0 113 .9 49%
Net finance cost (36.5) (38.0) 4%
Profit before taxation 133.5 75.9 76%
Taxation (34.5) (22.1) (56)%
Profit for the financial period 99.0 53.8 84%
Basic earnings per share 42.6p 22.8p 87%
Management monitors and assesses the business performance on a pre-IFRS 16
and exceptional items basis, which is shown below. This aligns to the reporting
used to inform business decisions, investment appraisals, incentive schemes and
debt covenants. A full reconciliation between the pre- and post-IFRS 16 results
is shown in the Glossary.
Income Statement – pre-IFRS 16
and exceptional items (£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
Revenue 1,827.9 1,651.5 11%
Net margin
1
651.3 598.6 9%
Net margin % 35.6% 36.3% (70)bps
Showroom costs (313 .7 ) (292.7) (7)%
Overheads (129.4) (106. 5) (22)%
EBITDA
1
208.2 199.4 4%
Showroom opening and closing costs (6.0) (6.9) 12%
Share of result of joint venture and associates – (0.2) - %
Adjusted EBITDA
1
202.2 192.3 5%
Adjusted EBITDA margin % 11.1% 11. 6% (50)bps
Depreciation, amortisation and loss on disposal
of fixed assets
(47.4) (42.6) (11) %
Adjusted EBIT
1
(segment profit) 154.8 149.7 3%
EBIT margin % 8.5% 9.1% (60)bps
Net finance costs (11.4 ) (13.6) 17%
Adjusted profit before taxation 143.4 136.1 5%
Adjusted earnings per share
1
45.2p 41.6p 9%
FINANCIAL REVIEW
1 This is an Alternative Performance Measure and is shown on a pre-IFRS 16 basis. Refer to the Glossary on pages 261 to 265 for definition, purpose and reconciliation to statutory measures where relevant
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
69
FINANCIAL REVIEW
CONTINUED
REVENUE
Revenue by geography and category
53 weeks ended 3 May 2026
(£million)
UK and
Europe
YoY %
Reported US
YoY %
Reported Total
YoY %
Reported Mix
Luxury watches
2 & 3
769.7 4% 737.3 18% 1, 507.0 10% 82%
Luxury jewellery
2 & 3
retail 70.7 12% 50.5 26% 121. 2 17% 7%
Luxury jewellery wholesale – – 126.9 16% 126.9 16% 6%
Eliminations – – (10.2) – (10.2) – –
Services/other
2
60.3 -% 22.7 26% 83.0 6% 5%
Total revenue 900.7 4% 927.2 18% 1,827.9 11% 100%
During the year, a refurbished Mayors multi-brand showroom opened in Lenox,
Atlanta following the opening of the standalone Rolex boutique in FY25 and we
relocated our Mayors showroom in University Town Center, Sarasota, Florida.
In October 2025, we 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. On 22 January 2026,
the Group completed the acquisition of a majority stake in Deutsch & Deutsch,
which comprised four showrooms. The business comprises four Rolex agencies
in Texas and delivered revenue of £16.4 million in the period since acquisition.
We continue to integrate Roberto Coin Inc. into the business in our first full
year of ownership. Wholesale revenue in the period grew by 22% at constant
currency, +16% at reported rates. Updated product ranges and a new advertising
campaign received positive feedback from partners. Within our retail network
the implementation of shop-in-shop displays in our Mayors retail network has
generated strong returns. Three new Roberto Coin mono-brand showrooms
were opened: Hudson Yards, New York and The Forum Shops, Caesars Palace,
Las Vegas both started trading in December 2025; followed by Miami, Design
District, Florida in January 2026.
UK and Europe revenue increased by 4% during the period, +7% when the impact
of showroom closures is reflected. This was a good performance in a challenging
retail environment. Strong momentum was seen across our flagship boutiques,
with Rolex Old Bond Street outperforming expectations. Sales in the UK
continue to be driven by a domestic clientele with ongoing tourist sales
significantly below performance seen when tax free shopping was available.
In September 2025, we opened our new concept Mappin & Webb Luxury
Jewellery boutique in Manchester to strong client feedback. 21 UK 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 FY25, which allowed
us to consolidate our portfolio and drive productivity across our UK estate.
Nine projects were completed in the UK, enhancing our existing estate to further
elevate the partner brands we display in those showrooms and advance our client
experience. These included our first ever Rolex agency on Blackett Street,
Newcastle and rebranding of our Watches of Switzerland showroom in
Birmingham to Mappin & Webb. Our two remaining European showrooms were
divested to brand partners during the period and the Group is no longer trading
in Europe.
2 In the period, the Group has reclassified the sales of certain goods and services between categories to reflect how results are reported to the CODMs. The 52-week period ended 27 April 2025 has been
re-presented to allow for comparison
3 Refer to the Glossary on pages 261 to 265 for definition
4 Ecommerce sales are sales which are transacted online
Group revenue of £1,827.9 million increased by 13% at constant currency, +11% at
reported rates from prior year, driven by a strong performance in our US market.
Excluding the FY26 53rd week, Group revenue was +11% in constant currency
(+8% reported).
Group revenue from luxury watches grew by 10% on the prior year. Demand for
our key brands, particularly products on registration of interest lists, continues to
be strong, with consistent additions and conversions. We remain encouraged by
the performance of our pre-owned business with sales growth of 22% on the
prior year. Rolex Certified Pre-Owned is available across all US agencies, except
the recently acquired Deutsch & Deutsch showrooms, and is present in 30 UK
agencies, with plans for a full roll-out to all agencies. Luxury watches made up 82%
of revenue in line with the prior year.
Luxury jewellery revenue, excluding wholesale, increased by 17% on the prior
year, with growth +12% in the UK and +26% in the US. In addition to Roberto
Coin, the majority of luxury jewellery sold by the Group is retailed under our
house brands of Goldsmiths, Mappin & Webb, Mayors and Betteridge. Our
strategy is to grow our luxury branded jewellery offering where we partner with
other major luxury jewellery brands. Luxury branded jewellery sales continue to
outperform non-branded jewellery. In the second half of the year, we launched a
lab-grown diamonds range within Goldsmiths to complement our existing range.
Services/other revenue, consisting of servicing, repairs, insurance services and
the sale of fashion and classic watches and other non-luxury jewellery, grew
by 6% in the year.
Group ecommerce
4
sales increased by 21% compared to the prior year in constant
currency (+19% reported). Investment in the US drove strong growth including
the successful re-platforming of the Watches of Switzerland and Roberto Coin US
ecommerce sites. We continue to be the market leader in ecommerce for luxury
watches and jewellery in the UK and growth was seen across all product
categories in the year.
US revenue increased by 24% year-on-year in constant currency (+18% reported)
and the US business made up 51% of the Group’s revenue in FY26 (FY25: 48%).
Luxury watch sales remained strong across brands and price points. Several
brands raised prices in the period in response to ongoing cost pressures from
gold and exchange rates, alongside additional tariffs on the landed cost of Swiss
exports. Client demand and interest in the category remained positive
throughout the period.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
70
PROFITABILITY
Group Adjusted EBIT of £154.8 million was +6% vs prior year in constant currency, +3% at reported rates. Adjusted EBIT margin % was 8.5%, a reduction of 60bps
vs prior year due to gross margin rates, product mix and one-off write down of trade receivables. The US was the major growth area and represented 51% of Group
sales and 62% of Group Adjusted EBIT.
US Income Statement – pre-IFRS 16 and exceptional items (£million)
US Retail US Wholesale Eliminations US Tot a l
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
Revenue 810.5 680.7 19% 126.9 109.8 16% (10.2) (4.9) 927.2 785.6 18%
Net margin
1
282.5 242.1 17% 53.5 44.5 20% – – 336.0 286.6 17%
Net margin % 34.9% 35.6% (70)bps 42.2% 40.5% 170bps – – 36.2% 36.5% (30)bps
Adjusted EBIT
1
71.1 61.2 16% 25.0 23.9 5% – – 96.1 85.1 13%
Adjusted EBIT % 8.8% 9.0% (20)bps 19.7% 21.8% (210)bps – – 10.4% 10.8% (40)bps
Adjusted EBIT FY26 was £65.9 million, a reduction of £4.1 million (6%) versus last
year, this equated to an Adjusted EBIT margin % of 7.3%, 80bps adverse to last
year. Net margin % was 35.0% in the period, 100bps adverse to last year, driven
by product mix and reduction in brand margins following gold price increases.
Exceptional items
Exceptional items are defined by the Group as those which are significant in
magnitude or are linked to events which are expected to be infrequent in nature.
Total exceptional items decreased profit by £8.8 million.
Exceptional items (£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
Rolex Old Bond Street – (4.2)
Showroom impairment (6.5) (44.5)
Showroom closures (1.7 ) (6.2)
European showroom divestment 0.4 (0.7)
Business acquisition costs (1.0) (2.1)
Total exceptional items (8.8) (57.7)
Of which impacts:
Operating profit (8.8) (55.5)
Net finance costs – (2.2)
Showroom impairment
The current macroeconomic environment, including higher interest and inflation
rates than at the time of some initial project appraisals, gave rise to indicators of
impairment in the period. Consequently, the Group performed discounted cash
flow impairment testing on relevant Cash-Generating Units (CGUs) with
indicators of impairment. This resulted in a net non-cash impairment charge
of £6.5 million, comprising gross impairment charges of £8.8 million (2025:
£43.6 million), partially offset by impairment reversals of £2.3 million (2025: £nil),
relating to showrooms where revised future cash flow projections support their
carrying value.
Total US Adjusted EBIT for FY26 was up 13% to £96.1 million, with Adjusted EBIT
margin % down 40bps to 10.4%. Within US retail, Adjusted EBIT for FY26 was
£71.1 million, an increase of £9.9 million (+16%) versus last year, this equated to an
Adjusted EBIT margin % of 8.8%, 20bps adverse to last year. Net margin % was
34.9%, down 70bps in the period driven by product mix and reduction in brand
margins following the imposition of US tariffs and higher gold prices. Where
retailer margins were reduced, the offset from RRP increases ensured that retailer
cash margins were maintained or improved.
Fixed cost leverage was gained on the sales increase of 19%, with costs rising at
a slower rate than sales. Cost increases were driven from the annualisation of
associated overheads from the acquisition of the Hodinkee business in FY25,
variable costs from sales growth (predominantly commission and credit card fees),
and investment into ecommerce to support the roll out of the new Watches
of Switzerland and Roberto Coin US websites.
US wholesale Adjusted EBIT of £25.0 million was an increase of £1.1 million (+5%)
versus last year after the one-off write off of a department store debtor, this
equated to an Adjusted EBIT margin % of 19.7% versus 21.8% in the prior year.
Net margin % was up 170bps to 42.2% driven by the benefit of selling through
existing inventory following price increases implemented during the period due
to increases in gold prices. The Group invested into additional marketing in
Roberto Coin, including the Dakota Johnson marketing campaign, which has
supported sales growth during the period.
UK and Europe Income Statement – pre-IFRS 16 and exceptional items
(£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
YoY
variance
Revenue 900.7 865.9 4%
Net margin
1
315.3 312.0 1%
Net margin % 35.0% 36.0% (100)bps
Adjusted EBIT
1
65.9 70.0 (6)%
Adjusted EBIT % 7.3% 8.1% (80)bps
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
71
FINANCIAL REVIEW
CONTINUED
Showroom closure costs
In March 2026, the closure of a number of UK showrooms was announced as the
Group continually assesses its operations to remain as efficient and productive
as possible. The exceptional costs reflect asset write downs, other onerous
contract provisions and redundancy costs.
European showroom divestment
As announced in 2024, the Group’s intention has been to reallocate investment
from Europe into the US and UK. During the period, our two remaining European
showrooms were divested to brand partners.
Business acquisition costs
Professional, legal expenses and integration expenses in relation to business
combinations have been expensed to the Consolidated Income Statement as an
exceptional cost as they are regarded as non-trading, non-underlying costs and
are considered to be material by nature.
Adjusted EBIT and operating profit
As a result of the items noted above, Adjusted EBIT was £154.8 million, an
increase of £5.1 million, +3.4% on the prior year. After accounting for exceptional
losses of £8.8 million and IFRS 16 adjustments of £24.0 million, operating profit as
presented on the face of the Consolidated Income Statement was £170.0 million,
an increase of £56.1 million, +49.3% on the prior year.
Finance costs
Net finance costs (£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
Pre-IFRS 16 net finance costs, excluding exceptionals 11. 4 13.6
IFRS 16 interest on lease liabilities 25.5 22.2
Reversal of pre-IFRS 16 onerous lease interest (0.4) –
Total net finance costs, excluding exceptionals 36.5 35.8
Interest payable on borrowings decreased in the period following a reduction of net
debt and interest rates. The impact was a net decrease in the pre-IFRS 16 interest
charge of £2.2 million to £11.4 million. The IFRS 16 interest on lease liabilities
increased by £3.3 million driven by the annualisation of prior year openings.
Taxation
The pre-IFRS 16 effective tax rate for the period before exceptional items was
26.7%. The statutory (post-IFRS 16 and including exceptionals) effective tax rate
was 25.8%. This is higher than the applicable UK corporation tax rate for the year
of 25.0% as a result of higher chargeable taxes on US profits and the impact of
expenses disallowed for corporation tax. Further detail can be found in note 8
in the Consolidated Financial Statements.
Profit before tax
Group profit before tax increased by 76% year-on-year to £133.5 million, primarily
driven by a £48.9 million reduction in exceptional items and a £5.1 million
improvement in Group Adjusted EBIT.
BALANCE SHEET
Balance Sheet (£million)
3 May
2026
27 April
2025
Goodwill and intangibles 319.7 304.1
Property, plant and equipment 217.0 192.4
Right-of-use assets 338.2 358.6
Investment in joint venture and associates 0.5 0.5
Inventories 458.1 4 47.4
Trade and other receivables 53.0 60.5
Trade and other payables (251.2) (259.5)
Lease liabilities (427.6) (454.6)
Net debt (57.0) (96.2)
Other (22.0) (13.6)
Net assets 628.7 539.6
Goodwill and intangibles increased by £15.6 million as a result of the Deutsch
& Deutsch business acquisition in the year which gave rise to £18.9 million of
goodwill and brand assets, offset by a £3.1 million adverse exchange impact, and
£1.3 million amortisation of brands and agency agreements. A further £3.3 million
of computer software additions were made in the year as part of ongoing IT
investments, offset by amortisation of £2.2 million.
Property, plant and equipment increased by £24.6 million during the period,
primarily reflecting additions of £68.3 million and £6.5 million of assets acquired
through the Deutsch & Deutsch acquisition, offset by depreciation of £43.4 million,
a net impairment charge of £3.5 million, disposals of £1.6 million and adverse
foreign exchange movements of £1.7 million.
Including software costs, which are disclosed as intangibles, capital additions
(including accruals) were £71.6 million in the period, of which £68.6 million was
expansionary capex
3
. In the period, the Group opened four new showrooms
and refurbished 12 showrooms. Investment in our portfolio is paramount to our
strategy, driving sales and returns. The Group follows a disciplined payback policy
when making capital investment decisions, the internal hurdle for showroom
investments is a cash payback of under three years (investment in fixed assets
and inventory divided by showroom EBITDA).
Right-of-use assets decreased by £20.4 million in the period to £338.2 million.
Additions to the lease portfolio along with lease renewals or other lease changes
were £40.6 million. This has been offset by depreciation of £53.9 million and a net
impairment charge of £4.1 million. The remaining movement is a £3.0 million
adverse foreign exchange impact.
Lease liabilities decreased by £27.0 million in the period. The portfolio changes
noted above increased the lease liability by £35.0 million and interest charged on
the lease liability was £25.5 million. Lease payments were £83.9 million and there
was a £3.6 million favourable foreign exchange impact giving a final lease liability
balance of £427.6 million.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
72
Inventory levels increased by £10.7 million (2.4%) compared to FY25.
The increase of inventory relates to the acquisition of Deutsch & Deutsch
(£8.7 million), targeted investment in strategic brand partnerships, and the
introduction of lab-grown diamonds, partially offset through a reduction in
underlying inventory to maintain stock turn at appropriate levels. The inventory
obsolescence risk remains low for the Group.
Trade and other receivables decreased by £7.5 million compared to FY25. The
notable reason for the decrease being £8.2 million of monies held in escrow in
relation to business combinations which has been paid in the period. The balance
represents prepayments, rebate receivables, rent deposits and other ad hoc
receivables such as property contributions.
Trade and other payables decreased by £8.3 million compared to FY25. Notable
reasons for the decrease being: £7.4 million of contingent consideration paid in
relation to acquisitions, in addition to the £2.1 million net working capital true up
payment (see note 25 of the Consolidated Financial Statements) and payment
of £8.2 million of acquisition balances held in third-party escrow accounts as noted
above. This was offset by the recognition of an £8.9 million liability relating to the
purchase commitment for the Deutsch & Deutsch non-controlling interests.
Other includes taxation balances, defined benefit pension and capitalised
finance costs.
Net debt and financing
Net debt on 3 May 2026 was £57.0 million, a decrease of £39.2 million since
27 April 2025. The strong free cash flow of £161.7 million was utilised for
£65.9 million of expansionary capex and £39.3 million in relation to acquisitions.
We completed the £25.0 million share buyback programme in the period, with
the final £13.8 million being paid in the first half of the year. Net debt/EBITDA
leverage ratio
1
was 0.38 at year end.
Net debt post-IFRS 16 was £483.0 million. The value comprises the pre-IFRS 16
net debt of £57.0 million and the £427.6 million lease liability, offset by capitalised
transaction costs of £1.6 million.
The Group’s maximum amount available under its committed facility was
£367.1 million at 3 May 2026.
Facilities held Expiring
Amount
(million)
Multicurrency revolving loan facility – UK SONIA +1.50%
to +2. 575%
May 2028 £275.0
Multicurrency term facility – US SOFR +1.65%
to +2.70%
May 2028 $125.0/
£92.1
£122.1 million of these facilities were drawn down at 3 May 2026. Liquidity
headroom (defined as unrestricted cash plus undrawn available facilities) was
£290.2 million. Further detail with regards to covenant tests and liquidity
headroom can be found within the going concern section of note 1 of the
Consolidated Financial Statements.
CASH FLOW
Cash flow (£million)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
Adjusted EBITDA
1
202.2 192.3
Share-based payment charge 1.8 1.8
Share of result of joint venture and associates – 0.2
Working capital (4.3) (52.2)
Defined benefit pension scheme contributions (0.7) (0.7)
Taxation (23.3) (29.7)
Cash generated from operating activities 175.7 111. 7
Maintenance capex
1
(3.0) (2.8)
Net interest (11. 0 ) (11.1)
Free cash flow
1
161.7 97.8
Free cash flow conversion
1
80% 51%
Expansionary capex
3
(65.9) (72.6)
Acquisitions (inc. contingent consideration) (39.3) (106.9)
Investment in joint venture and associates – (0.7)
Share buyback (13 .8) (11. 3)
Costs directly attributable to raising new loan facility – (1.5)
Disposal of property, plant and equipment 0.4 2.7
Exceptional items – cash (5.0) (8.6)
Cash flow 38.1 (101.1)
Net (repayment)/proceeds of borrowings (71.7) 85.7
Net decrease in cash and cash equivalents (33.6) (15.4)
Free cash flow increased by £63.9 million to £161.7 million in the period to 3 May
2026 and free cash flow conversion was 80% compared to 51% in the prior year,
primarily as a result of a lower working capital outflow in the period through
disciplined inventory management.
Expansionary cash capex of £65.9 million included the opening of four new
showrooms and the refurbishment of 12 showrooms.
£13.8 million of shares were paid for in the period as part of the £25.0 million
share buyback programme.
Exceptional cash items of £5.0 million, includes showroom exit costs and business
acquisition and integration costs, as detailed in note 4 to the Consolidated
Financial Statements.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
73
FINANCIAL REVIEW
CONTINUED
RETURN ON CAPITAL EMPLOYED (ROCE)
1
ROCE (%)
53 weeks
ended
3 May
2026
52 weeks
ended
27 April
2025
Pre-IFRS 16 18.0% 19.0%
Post-IFRS 16 15.4% 15.3%
FY26 Pre-IFRS 16 ROCE is 18.0%, a decrease of 100bps in comparison to the
prior year. Adjusted EBIT increased by 3.4% to £154.8 million, however average
capital employed during this period increased by 8.8% leading to the reduction.
Post-IFRS 16 ROCE for FY26 was 15.4%, an increase of 10bps compared to the
prior year. This reflects EBIT growth of 5.6% to £178.8 million, which exceeded
the 4.8% increase in average capital employed.
CAPITAL ALLOCATION
The Group has a clear framework of capital allocation and is focused on
optimising capital deployment for the benefit of all our stakeholders, with a focus
on long-term sustainable growth in the business. It is also important for the Group
to maintain financial and operational flexibility to be able to react tactically to
opportunities, such as strategic acquisitions, at speed. Our capital allocation
framework is as follows:
1. Showroom investments – given the attractive returns from showroom
investments, this is our key focus area to allocate capital to. In FY26, the
Group spent £65.9 million in expansionary cash capex
2. Strategic acquisitions – this is a key pillar of our growth strategy. Acquisitions
must deliver return on investment in line with our disciplined financial criteria,
within an appropriate timeframe. In FY26, the Group acquired a majority
stake in Deutsch & Deutsch
3. Returns to shareholders – in the event of surplus capital above and beyond
the requirements of the business for investment into showrooms or strategic
acquisitions, we would consider returns to shareholders either through share
buybacks or dividends, with the appropriate mechanism to be decided at the
appropriate time by the Board. During the prior period to 27 April 2025, the
Group announced a £25.0 million share buyback programme. £12.1 million
of shares were purchased in FY25, with an additional £12.9 million purchased
in FY26. The programme completed in June 2025
SHOWROOM PORTFOLIO
As at 3 May 2026, the Group had 191 showrooms. The movement in showroom numbers is included below:
UK multi-brand
showrooms
UK mono-brand
boutiques
Europe
mono-brand
boutiques
Total UK and
Europe
US multi-brand
showrooms
US mono-brand
boutiques Tot a l U S Total Group
27 April 2025 89 57 2 148 25 35 60 208
Openings 1 – – 1 1 3 4 5
Acquisitions – – – – 4 – 4 4
Closures (9) (12) (2) (23) (1) (2) (3) (26)
3 May 2026 81 45 – 126 29 36 65 191
Certain financial data within this section has been rounded. Growth rates are calculated on unrounded numbers.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
74
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
The following table sets out where stakeholders of Watches of Switzerland Group PLC can find relevant non-financial and sustainability
information within this Annual Report and Accounts further to the Financial Reporting Directive requirements contained in Sections
414CA and 414CB of the Companies Act 2006.
This Non-Financial and Sustainability Information Statement highlights information necessary for an understanding of the Company’s
development, performance, position and impact of its activity, and information relating to environmental, colleagues, social matters, respect
for human rights, anti-bribery, corruption and fraud matters. The information listed below is incorporated by cross references to other
areas of the Annual Report and Accounts and the Company website where further information can be found.
ENVIRONMENT
Key matters Relevant policies and procedures which govern our approach Page(s)
Climate-related financial disclosures Task Force on Climate-Related Financial Disclosures report
Analysis of resilience
Risk Management
Companies Act 2006
108 to 125
116 to 119
120 and 121
122
Taking action on climate change Our Supplier Sustainability Standards set out our net-zero GHG emissions goal and the actions we need
to take within our value chain to achieve them
99 to 101
Reducing our impact
on the environment*
Our Environment Policy, Vendor Code of Conduct and Supplier Sustainability Standards promote
the efficient use of resources and energy in our supply chain and ensure a Group-wide commitment
to continual improvement and compliance with environmental legislations and regulations
136 and 137
Providing sustainable solutions* Our Modern Slavery Statement includes key performance indicators 136
COLLEAGUES
Key matters Relevant policies and procedures Page(s)
Encouraging colleagues to raise
matters of concern*
Where colleagues have concerns about suspected wrongdoing, misconduct or malpractice connected
to the Group they can report such concerns on a confidential and anonymous basis, and without fear
of retaliation, using our Whistleblowing Policy and procedures
136 and 137
Investing in our people
and a diverse workforce
Our Diversity & Inclusion Policy ensures that colleagues are treated fairly and equally and that diversity
and inclusion is embraced
188
Providing our colleagues with
a safe working environment
We are committed to maintaining safety standards that comply with legislation and enable colleagues
to be confident that their workplace is safe
137
SOCIAL MATTERS
Key matters Relevant policies and procedures Page(s)
Developing responsible supply chains* Our Vendor Code of Conduct and Supplier Sustainability Standards include measures taken to ensure that
products are sourced responsibly and that adequate standards are maintained throughout our supply chain
134 and 135
Promoting a healthy corporate culture Our Values underline the way we conduct business and recognise we will only continue to be successful if we
grow profitability and conduct our business in a way which impacts all of our stakeholders in a positive way
84
Business standards of behaviour* Our Code of Ethics ensures that all business is conducted in a fair and ethical manner with the highest levels
of integrity and professional standards globally
136
ANTI-BRIBERY, CORRUPTION AND FRAUD
Key matters Relevant policies and procedures Page(s)
Prevention of bribery, corruption
and fraud*
Our Anti-Bribery, Corruption & Fraud Policy outlines the behaviours and principles required of colleagues
to prevent any form of bribery, corruption or fraud
136
Promoting ethical supply chains* Our Vendor Code of Conduct defines the principles and standards we expect suppliers to understand
and adhere to
136
RESPECT FOR HUMAN RIGHTS
Key matters Relevant policies and procedures Page(s)
Approach to human rights
and modern slavery*
Approved annually, by the Board, our Modern Slavery Statement sets out the steps that we take to ensure,
as far as possible, that slavery and trafficking do not exist in our supply chain or in any part of our business
Human Rights Policy
130 and 131
A description of our business model can be found on page 24.
Where principal risks have been identified in relation to any of the matters listed above, these can be found on page 142.
Our non-financial key performance indicators can be found on pages 67 and 68.
* Find out more about our policies in the Governance section on our corporate website thewosgroupplc.com
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
75
SECTION 172(1) STATEMENT
We believe that in order to maximise value and deliver long-term success, it is critical that we understand who
our key stakeholders are. This enables us to build relationships, to engage in proactive and constructive dialogue,
and to ensure we deliver on what is important to them. To that end, engagement with all of our stakeholders
plays a vital role in delivering our Group strategy. The Board has carried out a stakeholder mapping exercise,
which it reviews annually. The stakeholders below have been identified as those most likely to be affected
byitsprincipal decisions.
HOW WE ENGAGE WITH
OUR STAKEHOLDERS
STAKEHOLDER MAPPING
COLLEAGUES
All colleagues work through a network of
showrooms, Support Centres, repair
centres and distribution centres.
CLIENTS
Our clients are a range of
shoppers attracted to luxury
watches and jewellery, who
can become repeat clients
spanning age, income groups
and genders.
BRAND PARTNERS
& OTHER SUPPLIERS
Our brand partners and other suppliers
are comprised of all third-parties who
support the business and provide goods
and services.
INVESTORS
Our shareholders are the owners
of our Company, ranging from
institutional investors toprivate
individuals andcolleagues.
COMMUNITIES
Our communities are made up of
thosewho live in the areas in which
weoperate.
Section 172(1) of the Companies Act 2006 requires that the directors of a company must act in the way they consider, in good faith, would be most likely to
promote the success of the company for the benefit of its members as a whole, having regard to each of its stakeholders and taking into account the factors
listed in Section 172(1) (a) to (f). The Board therefore considers the views of each of its stakeholders as part of the decision-making process. Examples of
Governance In Action can be found on pages 162 and 164.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
76
STAKEHOLDER DESCRIPTIONS
Our Colleagues – The strength of our business is built on the hard work
and dedication of all our colleagues. We give colleagues every reason to join,
grow and stay with our Group through attracting and retaining talent,
building an organisation fit for the future and leveraging our unique culture.
Clients – Our clients remain at the centre of everything we do. By
purchasing our products, our clients ensure our viability as a business. We
strive to meet and exceed our clients’ expectations through our Xenia Client
Experience Programme by providing them with highly creative products of
exceptional quality.
Brand partners and other suppliers – Our brand partners are an integral
part of our business to manufacture and allocate their product to us. Our
other suppliers provide us with the products and services that are essential
tooperate our business.
Investors – All investors are treated fairly and have equal access to both
Company information and our Board of Directors. We also engage with
theinvestment community, advisers and potential shareholders.
Communities – Communities and the wider public expect us to act as
aresponsible company and neighbour. We strive to drive positive change
inour communities through our volunteering programme, supporting
TheWatches of Switzerland Group Foundation and acting as a
responsibleemployer.
Colleagues S172(1) (b) The interests of the company’s employees
Clients S172(1) (c) The need to foster the company’s business
relationships with suppliers, customers and others
S172(1) (e) The desirability of the company maintaining
areputation for high standards of business conduct
Brand partners
andother
suppliers
S172(1) (c) The need to foster the company’s business
relationships with suppliers, customers and others
S172(1) (e) The desirability of the company maintaining
areputation for high standards of business conduct
Investors S172(1) (e) The desirability of the company maintaining
areputation for high standards of business conduct
S172(1) (f) The need to act fairly between members
of the company
Communities S172(1) (e) The desirability of the company maintaining
areputation for high standards of business conduct
S172(1) (d) The impact of the company’s operations
on the community and the environment
S172(1) (a) In each part of the Board’s decision-making it considers likely
consequences in the long-term and not just the short-term.
Below, and on the next pages, we identify why and how the Company actively
engages with our stakeholders, how we measure success and summarise some
ofthe outcomes of our engagement. Further information can be found in the
Corporate Governance Report on pages 152 to 170.
COLLEAGUES
Stakeholder priorities
– Job security, future prospects with learning
anddevelopment opportunities
– Fair compensation and benefits
– Being part of a diverse, equitable and inclusive
workplace
– Regular and relevant communications and
engagement with management
– Meritocracy and equal access to opportunity,
support and development
– Taking a position on the environment, sustainability
and giving back to the community
Why we engage
– To give our colleagues every reason to join, grow
and stay with our Group
– To ensure our colleagues are kept informed about
the business and how any changes may affect them
– To fulfil our commitment to our purpose and values
– To continually develop, attract and retain talented
people
– To develop good business practices to ensure the
wellbeing of our colleagues remains at the forefront
of what we do
How we engage
– Presentations by Executive Directors and Senior
Management, at US and UK Town Halls, providing
business updates with the opportunity for
questions and discussions
– Regular development reviews, performance
discussions and face-to-face training
– Conducted Pulse Engagement Surveys to
understand the progression, development and
actioning of colleague points of view on matters
which affect them
– Regular engagement with the Diversity Council and
Employee Resource Groups including the
development of ‘In Conversation’ with Senior
Leaders and the Designated Non-Executive
Director for Workforce Engagement (DNED)
– Having an innovative, accessible and collaborative
two-way communication platform called
CONNECT
Monitoring the impact of our engagement – outcome
– Continued our focus on high performance culture
including regular talent and succession session
– Received feedback from the DNED and Senior
Management leading to informative discussions
inthe boardroom
– Pulse surveys provided affirmation that
management are implementing plans and doing
theright thing
– Delivery of management principle training to line
managers was completed – an action identified by
the most recent
Great Place To Work
®
survey. This
enables focus on ‘Everyday Leadership’ and the
development of knowledge and skills, setting clear
expectations, motivation and coaching
– Feedback from colleagues led to a review
andsubsequent change to benefit offerings.
Improvements have already been identified
asaresult of the changes
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
77
SECTION 172(1) STATEMENT
CONTINUED
CLIENTS
Stakeholder priorities
– Exceptional client experience through Xenia, the
Group’s Client Experience Programme
– Receive a memorable experience which positively
differs from our peers
– Receive expert knowledge and advice
– Dedicated life-cycle and support service
throughout the life of the product
– To be enabled to make sustainable decisions
Why we engage
– Our clients are central to all we do, building
relationships and understanding clients is key
– Our Purpose is to WOW our clients while caring for
our colleagues, our communities and our planet
– Our Values support this Purpose to create a
seamless and positive client experience
– Placing clients at the heart of our business is key to
deliver on our growth and long-term strategy
– By putting the value we provide to clients at the
forefront we believe we will earn a greater share of
our clients’ spend
– Ensure clients or potential clients are supported from
the very beginning of their lifetime journey with us
How we engage
– Teams liaise directly with clients and potential
clients with the aim of providing a differentiated
client experience
– One-to-one clienteling takes place between
showroom colleagues and clients to engage on
product launches and service
– Through a variety of client surveys, reviews and
mystery shoppers
– Supporting clients with their buying journeys, both
in showrooms and online with the Luxury Watch
and Jewellery Virtual Boutique in the UK
– Engaging through informative and inspiring multiple
marketing channels
– Continuing with strong client event programmes
– If something goes wrong, engaging with our clients,
through our Client Recovery Team
Monitoring the impact of our engagement – outcome
– Discussions at each Board meeting focus on client
behaviour and sentiment and provide insight as to
how clients and future clients can be best
supported
– Continuous improvement of our client experience
training through Xenia measured through a focus
on key performance indicators
– Implementing and integrating common systems
andprocesses throughout the Group. Improve
efficiency and deliver improved lead times and
anenhanced client experience
– As a result of the successful delivery of the client
experience introduced in the flagship Rolex
boutique, Old Bond Street, London, demonstrated
by the client satisfaction statistics, this elevated
programme was rolled out to 32 UK Rolex
boutiques
BRAND PARTNERS AND OTHER SUPPLIERS
Stakeholder priorities
– Relationships are built on mutual trust and respect,
we recognise the responsibility we undertake to
represent the brands and contribute to their
long-term value appreciation
– Working together in a collaborative manner, co-op
marketing activities, incentives and training
opportunities
– Clear and accessible information about our
required specifications, guidance, policies and
standards
– Remaining compliant and vigilant to the risks
relating to modern slavery and human trafficking
Why we engage
– Our brand partners and other suppliers play an
integral role in our ability to deliver product and
experiences to our clients
– Regular engagement ensures relationships are
underpinned by clear and open communication
– Facilitate a two-way understanding of issues that
may arise and the ease with which we can work
together to solve them
– Work closely with our brand partners and
othersuppliers to support them on their
sustainability journey
How we engage
– Regular top-to-top meetings locally and in brand
partner head offices, alongside regional and local
brand partner and supplier events and attendance
of industry fairs
– Ongoing dialogue, including the launch of exclusive
ranges and actively identifying distribution
opportunities
– At a Board meeting in Manchester, spent time with
a key brand partner
– Carry out independent on-site audits of key and
high-risk suppliers, focusing on social, environmental
and ethical conduct, alongside technical and
operational capabilities
– Distribution of, and obtaining acknowledgement of,
our Supplier Sustainability Standards and Vendor
Code of Conduct (or equivalent)
– Collaborating with our brand partners on the
end-to-end go-to-market processes to ensure
product is presented in line with our strategy and
their brand stories
Monitoring the impact of our engagement – outcome
– Ongoing relationships enabled us to explore
opportunities with brand partners to develop
products, including packaging, using innovative and
responsibly sourced raw materials and expanding
our circular business model, including pre-owned
– Efficient and timely flow of product into the
showrooms, including limited editions, exclusives
and first to market products
– 100% of our key watch and jewellery suppliers,
onboarded in FY26, have accepted the terms of the
Vendor Code of Conduct or have an equivalent
standard
– On-site independent audits ensure that where
suppliers do not meet expectations, improvements
are made within a strict timetable, or arrangements
are put in place for supplier agreements to be
terminated
– In-person and on-site meetings with brand partners
enhances an understanding of relationships
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
78
INVESTORS
Stakeholder priorities
– Delivery of the long-term strategy which aligns with
the Group’s purpose and values and culture
– Creation of long-term and sustainable shareholder
value and clear reporting on the Group’s
performance
– A return on investment, a clear and disciplined
capital allocation framework
– Meaningful engagement with the Board and the
upholding of good governance practices
Why we engage
– Understand and value the importance of engaging
with investors’ views, priorities and values
– Build trust and secure ongoing support
– Two-way engagement enables the Board to take into
account investor views within its wide strategic
decision-making
– Ensure current and potential investors understand
our business, long-term strategy and objectives
– Promote a strong and robust corporate governance
framework
How we engage
– Ongoing dialogue between investors, the CEO and
CFO including investor roadshows, plus
engagement between major shareholders and the
Chair
– Hosting investor days with guided showroom tours
in the US and in the UK along with other in-person
events
– Having the opportunity to meet with shareholders,
in person, at the Annual General Meeting
– Regular results and reporting, press releases, results
briefings and participation in investor conferences
– Our corporate brokers attended a number of
Board meetings during the year giving a range of
updates and presentations
– Key stakeholders were given the opportunity to
engage with the Chair of the Remuneration
Committee on the new Remuneration Policy which
was presented for approval at the 2025 AGM
Monitoring the impact of our engagement – outcome
– During FY26, our Chair, CEO, CFO and Group
Finance and Investor Relations Director attended
over 200 meetings with over 250 separate
institutions globally
– 2025 AGM saw all resolutions passed with votes in
favour ranging from 88% to 100%, including the
approval of the new Remuneration Policy
– Direct engagement with shareholders offers our
Directors an ideal opportunity to understand key
areas and common themes of interest, which were
discussed by the Board during FY26
– Investor feedback was considered by the Board
when reviewing investor relations and capital
allocation strategies, including the completion of
the share buyback programme
COMMUNITIES
Stakeholder priorities
– Understand the differing needs and priorities
ofourlocal communities and how we can best
support them
– Provide local employment and investment to help
our local communities thrive
– Create positive environmental and social impact,
enabling a sustainable future
Why we engage
– One of our core values is that we care for our
communities by engaging and actively supporting
those in need
– We make a positive social impact by being a
goodcorporate citizen and paying our taxes to
contribute to society in the countries in which
weoperate
– We understand the importance in recruiting and
retaining diverse talent from our local communities
– Both the Company and our Foundation donate
directly into the local communities in which we
operate to seek to make a difference
How we engage
– Support The Watches of Switzerland Group
Foundation (‘The Foundation’) to drive positive
change
– Consider the social impact of our business
decisions, discussed at the ESG Committee and
theBoard
– Support through promoting payroll charity giving,
volunteering at community projects and other
organisations
– Entering into sponsorships agreements with certain
charitypartners
– Establishing volunteering programmes in our
communities
– Being signatories and members of organisations
who aim to make a difference in the responsible
business network
Monitoring the impact of our engagement – outcome
– Increased participation in charitable activities
through fundraising and increased volunteering
hours and number of locations
– Multiple events held with members of the Senior
Leadership Team (alongside a number of the
Trustees from The Foundation) to support charities
– Raising awareness and funds through sponsorship
of the ‘Change a Girl’s Life’ campaign and
collaboration with a brand partner
– Functional volunteering by colleagues to support
charities introduced by The Foundation
– External Fair Tax Mark accreditation from the
FairTax Foundation, independently certifying
weoperate at the highest levels of responsible
taxconduct
– Foundation activities are shared on internal
channels, LinkedIn and other social media channels
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
79
ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
80
This report covers the Watches of Switzerland Group PLC (the ‘Group’)
for the reporting period from 28 April 2025 to 3 May 2026.
It incorporates activities and operations over which the Group has direct control
or significant influence. This includes all owned and operated showrooms and
service centres in the US and UK, our offices and regional headquarters and
distribution and logistics centres under operational control of the Group.
Performance data and disclosures are reported for all consolidated subsidiaries
within the Group’s financial reporting boundary. Environmental data includes
Scope 1 and Scope 2 emissions across directly controlled locations, and Scope 3
data includes emissions from supply chain logistics and transportation.
Social and governance data includes all directly employed colleagues across
our Group operations.
During the reporting period, the Group announced the acquisition of a majority
stake in Deutsch & Deutsch, a family-owned luxury watch and jewellery retailer,
and as a result, the scope of our reporting has grown to include the
performance of these newly acquired showrooms from the date of acquisition
onward. Historical data from prior periods does not include this business unless
otherwise specified. Any minor updates or methodological adjustments are
noted within the relevant sections of this report.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
81
MAY
The Group began FY26 with eligibility
for a 2025 Equileap Gold Seal,
awarded to top-performing global
companies for their commitment to
gender equality, including pay gap,
leadership balance, andpolicies.
Our net-zero commitment was
approved by the ESG Committee,
who also gave the green light to
extending the roll-out of our Energy
Operating System (EnOS
™
) within an
additional 48 sites across the Group.
SEPTEMBER
We welcomed the Executive Director
of the Watch & Jewellery Initiative
2030 (WJI 2030), Iris Van Der Veken,
as a guest of our ESG Steering Group,
to discuss how this multi-stakeholder
initiative was accelerating the
achievement of United Nations
Sustainable Development Goals
(UNSDGs) across our industry.
During New York Climate Week,
weshowed our support for achieving
the UNSDGs by collaborating with
eco-innovative watch brand, ID Genève,
to hold an event in our US Watches of
Switzerland Soho showroom where we
hosted representatives from the UN
General Assembly, VIP clients, and
other high-profile delegates and
changemakers.
JUNE
For Volunteers Week, we continued to
empower colleagues to help people
who have been adversely impacted
bypoverty through charity partnerships
including Habitat for Humanity in the
US and the Trussell Trust in the UK.
During London Climate Action Week I
joined a panel to discuss how we are
leveraging data and technology to
reduce energy and optimise building
performance – while key colleague
environmental leadsreviewed
progressacross our environmental
actions and targets.
The Group tested the effectiveness
ofgovernance controls to support
futurecompliance, transparency
andaccountability, while aligning
material ESG issues.
As we encourage suppliers to align
with relevant sustainability standards
and certifications, we congratulated the
accessories brand WOLF on achieving
Positive Luxury’s Butterfly Mark and
partnered with jewellery brand,
Annoushka, who are also part of this
certification scheme, which signals high
sustainability standards andethical
business practices.
JULY
After a successful roll-out across our
retail teams, our Everyday Leadership
programme was widened to include
support centre managers with the aim
of creating leaders who can coach,
develop, set goals and ultimately inspire
positive behaviours and action.
Our net-zero commitments were
approved by the Science-based
Targets initiative (SBTi), reinforcing
the credibility and ambition of our
decarbonisation plans, and we
continued to strengthen our
initiatives including a Transition
Planning Workshop, to assess current
climate-related risks and opportunities.
To support our goal to improve product
traceability and sourcing standards,
welaunched the Goldsmiths Signature
Diamond – our first fully traceable
diamond collection, featuring Diamond
Trading Company (DTC), natural
diamonds and Tracr
™
technology.
AUGUST
To promote our burgeoning pre-
owned watch business, an in-person
and online event was held to engage
colleagues with the environmental and
circular economy benefits of this lower
carbon product option.
In line with our responsible sourcing
andhuman rights commitments,
Slave-Free Alliance facilitated a
workshop for key colleagues aimed at
understanding how to spot andreport
modern slavery risks and formalise
escalation processes.
To strengthen oversight and
accountability for our long-term
climatecommitments, our ESG
Steering Group approved our
proposed net-zero targets.
Information to improve client-facing
colleagues’ understanding of responsible
sourcing was also reviewed and updated,
and we launched our first unattended
Robotic Process Automation (RPA) or
‘AI Bot’ to support and accelerate
warranty checks.
2025
Our first fully recyclable packaging for
Goldsmiths was launched – alongside
a fully traceable jewellery range
through a partnership between 886 at
The Royal Mint and Mappin & Webb
to produce products from ‘urban
mined’ precious metals using
recovered and recycledsources.
To help strengthen legal guidance,
education and advocacy across our
valuechain, we became members of
the Jewelers Vigilance Committee –
aUS based, non-profit legal trade
association for the jewellery and
watchsectors.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
SUSTAINABILITY
MOMENTS
“Our underlying value is to do the right thing, always.
This shapes the way we make decisions, how we work
with others and how we run our everyday business.
Looking back across the year, what stands out to me are the
moments that brought this philosophy to life – some significant,
others less visible – but each representing a step towards our
long-term sustainability goals.
The following timeline is my reflection of our progress, our
priorities and our determination to WOW our clients, while
caring for our colleagues, our communities and our planet.”
A look back at the year from our Head of Sustainability and ESG
Kesah Trowell
Head of Sustainability and ESG
participating in the Palace to Palace
cycle ride in October 2025
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
82
OCTOBER
Over 80 colleagues walked or cycled
from Buckingham Palace to Windsor
Castle to fundraise for The King’s Trust
– enhancing their own health and
wellbeing, while raising over £50,000
forprogrammes to support young
people who are facing challenges.
Our net-zero emissions target was
approved by our ESG Committee, along
with our human rights priorities and
colleague incentive criteria – plus I
participated in an expert panel as part of
London Packaging Week to share how
we are transitioning to more sustainable
packaging methods andmaterials.
NOVEMBER
We conducted energy audits and
identified cost effective energy-saving
opportunities to support compliance
with the UK Energy Savings
Opportunities Scheme and tied the
launch of our enhanced Travel and
Expenses Policy to a colleague incentive
to encourage environmentally
responsible travel options when
travelling for work.
During Modern Slavery Week,
colleagues heard about our human
rights initiatives, relevant colleagues
received training and our procurement
analyst attended Slave Free Alliance’s
annual members conference aimed at
building supply chain resilience through
meaningful stakeholder engagement and
strategies to improve ethical practices.
DECEMBER
Engaging with industry bodies and
initiatives helps us to keep pace
withinnovation as well as industry
expectations and challenges. I was
therefore honoured to represent the
Group as a guest at the WJI 2030
Leadership Forum tohear sustainability
insights from our industry, along with
experts, including the Chairman of
Cartier Culture & Philanthropy and
theFounder of the United Nations
Global Compact.
I was also delighted to attend an
induction with the Responsible
Jewellery Council (RJC) Standards
Committee after being appointed
asaGuest of the Committee, to
represent retail and help the RJC
promote trust, transparency and
sustainability by ensuring ethical, social,
and environmentally responsible
practices across the value chain.
JANUARY
It was a happy new year afterthe
Group acquired a majority stake
inTexas-based luxury watch and
jewellery business, Deutsch & Deutsch.
The SBTi verified our net-zero targets
and CDP awarded our climate change
disclosures an A- (followed by an A for
stakeholder engagement in February).
A physical climate risk assessment was
completed across all of our locations
and we aligned cross-functional
stakeholders through our Planet
Working Group to support the
development of a clearer roadmap
towards our sustainability objectives
andtargets.
FEBRUARY
Our business stepped forward to raise
more funds for young people through
The King’s Trust Future Steps challenge,
and we surveyed colleagues across our
Group to understand the sustainability
impact of their commute.
We also completed the UK roll-out of
our new EnOS
™
and switched on our
first solar array at our Carlton Park
Support Centre in Leicester, UK.
MARCH
We celebrated International Women’s
Day with internal and external panel
events and hosted a string of ‘Brilliant
Breakfasts’ as headline sponsors of
TheKing’s Trust’s Change a Girl’s
Lifecampaign.
We also conducted a colleague survey
tounderstand what clients want when
itcomes to sustainability, and joined
apanel as part of the Retail Jeweller
Festival to discuss recycled precious
metals propositions.
To further improve our supply chain
management system, we introduced a
new integrated supplier-invoicing tool
to improve how we manage invoicing
and supplier information.
APRIL
To mark Earth Day, Analog:Shift
partnered with Citizen Watches on
avintage trade-in programme and
exclusive capsule launch at Citizen's
New York flagship store. Guests were
invited to trade in vintage Citizen
timepieces in exchange for a credit
towards a curated collection of
historically significant models – bringing
vintage watches back into circulation
and extending product life cycles.
2026
To further strengthen our integrity
inrelation to evolving industry
requirements, we reviewed and revised
our Supplier Operating Manual to
include the latest sustainability guidance
and practices.
Finally, our responsible approach to
sustainability received the ultimate seal
ofapproval, when the Royal Household
granted our Mappin & Webb business
aRoyal Warrant to Her Majesty
Queen Camilla – ending the year
onahighness!
APRIL (continued)
A tour of Heathrow airport’s recycling
centre was taken to see howwaste is
managed and understand some of the
challenges with measuring waste when
operating within shared facilities.
The Group was recognised by a global
ratings provider as an ESG Industry
Leader and we continued to advocate
for our industry with a feature in Retail
Jeweller magazine’s Sustainability edition.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
83
Our Purpose
WOW our clients while caring
for our colleagues, our communities
and our planet
E
N
H
A
N
C
E
O
U
R
R
E
P
U
T
A
T
I
O
N
A
N
D
R
E
A
S
S
U
R
E
C
L
I
E
N
T
S
C
r
e
a
t
i
n
g
l
a
s
t
i
n
g
v
a
l
u
e
b
y
h
e
l
p
i
n
g
c
l
i
e
n
t
s
m
a
k
e
i
n
f
o
r
m
e
d
p
u
r
c
h
a
s
i
n
g
d
e
c
i
s
i
o
n
s
D
O
T
H
E
R
I
G
H
T
T
H
I
N
G
,
A
L
W
A
Y
S
W
I
T
H
S
T
R
O
N
G
E
N
V
I
R
O
N
M
E
N
T
A
L
,
S
O
C
I
A
L
,
G
O
V
E
R
N
A
N
C
E
P
R
A
C
T
I
C
E
S
D
e
l
i
v
e
r
e
d
b
y
w
e
l
l
t
r
a
i
n
e
d
c
o
l
l
e
a
g
u
e
s
w
h
o
f
e
e
l
v
a
l
u
e
d
Our Purpose is an inextricable part of how we do business.
Environmental, social and governance factors are considered
inourdecision-making processes at every level of our business.
OUR SUSTAINABILITY STRATEGY
With our highly engaged colleagues and brand partners, scale and expertise,
we are uniquely positioned to achieve this.
Our sustainability strategy has evolved to focus on key material issues in line
withbest practice and global reporting frameworks, with input from key
stakeholder groups.
It is underpinned by clear priorities and ambitious targets to safeguard against
environmental, social and governance risk, while leveraging opportunities
to secure a more sustainable future.
Guided by Our Purpose, our strategy is to build
a more sustainable, valuable business.
To WOW our clients while
caring for our colleagues, our
communities and our planet
OUR PURPOSE
OUR VALUES
OUR SUSTAINABILITY STRATEGY
Our Values shape our culture and behaviour, driving performance
and purposeful action. They are the cornerstone of our Code of
Ethics and truly represent who weare.
WE EARN TRUST
& CONFIDENCE
WE TREAT EVERYONE
WITH RESPECT
WE DO THE RIGHT
THING, ALWAYS
WE CARE FOR OUR
COMMUNITIES
WE PROTECT
OUR PLANET
WE ADVOCATE FOR
OUR INDUSTRY
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
84
Colleagues
Clients
Communities
Investors
Brand partners
and other suppliers
Engaging stakeholders
with sustainability goals
Our foundational pillars provide a strategic framework and guiding
principles to help streamline our decision-making and ensure everyone
across our Group works towards common goals.
We WOW clients with the finest selection of luxury watches
and jewellery, together with world-class service.
We provide colleagues with rewarding careers, support a thriving economy
and care for our communities through rigorous ESG standards and The
Watches of Switzerland Group Foundation.
We track our progress holistically, across non-financial
and financial performance.
Our commitment to a more sustainable future is reinforced through the
inclusion of ESG targets in our colleague bonus structure, supported by
financial and non-financial incentives.
In addition, our existing loan facility is linked to the achievement of our
near-term science-based emission reduction targets and circularity goals.
PEOPLE
GOALS
– Give our people every reason to join,
growand stay with our Group, through
attracting and retaining talent, building an
organisation fit for the future and leveraging
our unique culture
– Support our local communities
SUPPORTING UN SDGS
1
PLANET
GOALS
– Achieve net-zero carbon by 2050
– Build climate resilience
– Preserve natural resources
SUPPORTING UN SDGS
1
PRODUCT
GOALS
– Improve our traceability and sourcing
standards and highlight the sustainable
attributes of our watches and jewellery
– Support circularity in watches and jewellery
through repairs, servicing and our
Pre-Owned business
SUPPORTING UN SDGS
1
Our ESG performance is recognised through inclusion in the FTSE4Good
Index series and independent assessments by leading ESG rating
organisations, including MSCI, S&P and ISS ESG.
ISS ESG is the provider of the ISS ESG Corporate Rating and the use
oftheISS ESG Prime badge does not constitute an endorsement,
recommendation or investment advice. FTSE Russell (the trading name
ofFTSE International Limited and Frank Russell Company) confirms that
Watches of Switzerland Group PLC has been independently assessed
according to the FTSE4Good criteria, and has satisfied the requirements
tobecome a constituent of the FTSE4Good Index Series. Created by the
global index provider FTSE Russell, the FTSE4Good Index Series is
designed to measure the performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices. The FTSE4Good
indices are used by a wide variety of market participants to create and
assess responsible investment funds and other products.
1 United Nations Sustainable Development Goals.
OUR SUSTAINABILITY PILLARS DELIVERING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS
DRIVING SUCCESS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
85
BOARD-LEVEL OVERSIGHT
(ESG Committee)
EXECUTIVE ACCOUNTABILITY
(ESG Steering Group and Trading Board)
OPERATIONAL INTEGRATION
(Working Groups)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
The Group operates an ESG Governance framework to ensure the business takes
a long-term perspective, engages with a broad group of stakeholders, considers
impacts beyond traditional financial performance, collaborates cross-functionally
and remains focused on delivering material environmental and social priorities,
including our transition to net-zero emissions by 2050.
With the regulatory landscape continuing to rapidly evolve, in FY26 we further
strengthened our ESG governance as part of a wider programme to enhance
theGroup’s Governance, Risk and Compliance framework. This work has
resultedin an improved approach to how we identify, monitor, escalate and
manage sustainability-related risks and has strengthened the alignment between
our material ESG topics, principal risks, and strategic objectives. This work also
supports the integration of sustainability-related risks and opportunities into
governance, strategy, risk management, and metrics and targets and we
continueto evolve our processes to enhance the consistency, comparability,
anddecision-usefulness of our disclosures for investors and other stakeholders.
APPROACH
Inspired by our Value to ‘do the right thing, always’, we operatearesponsible
andethical business by aspiring to best practice and understanding stakeholder
expectations, then making sure we reflect this inourdecision-making processes.
Our approach is built on three core governance pillars of People, Planet and
Product. Board oversight is supported by our ESG Committee, to ensure ESG
related priorities remain aligned with theGroup’s wider business strategy, brand
values and long-term objectives.
Executive-level accountability occurs through our ESG Steering Group, while
operational integration is driven by our Trading Board and delivered through
dedicated working groups, comprising senior leaders who each represent key
business functions.
Through defined responsibilities, regular reporting and cross-level functional
collaboration, our ESG governance framework ensures risks and opportunities
areidentified, managed and aligned with the Group’s long-term strategy,
regulatory obligations and stakeholder expectations.
We regularly gauge our performance internally through key performance
indicators and peer benchmarking, and externally through ESG rating agencies,
such as MSCI and ISS ESG. We also participate in recognised reporting
frameworks such as the CDP questionnaire on climate change.
FRAMEWORKS
The Group’s business strategy is aligned with the UNSDGs and we support
theprinciples of the UN Global Compact, which aims to prioritise and mobilise
efforts to drive business action to achieve these goals by 2030.
ESG GOVERNANCE
The Group is committed to high standards of environmental and social governance and our Board
Governance Structure can be found on page 159 and page 110 of our TCFD disclosure.
The Board has overall responsibility for oversight of ESG-related risks and opportunities and is supported
by the dedicated ESG Committee, chaired by Baroness (Rosa) Monckton MBE, Non-Executive Director.
Our ESG Committee meets a minimum of three times a year, plus, where appropriate, additional meetings
are held dedicated to training and awareness. The Committee plays an active role in the development and
delivery of the Group’s ESG Strategy by considering best practice, ratifying key decisions, and providing
accountability against KPIs in relation to our three Sustainability Pillars of People, Planet and Product.
The ESG Committee is supported by an ESG Steering Group, which is comprised of members of Senior
Management, each with formal operational responsibility for the management of environmental, social and
governance issues. The ESG Steering Group is chaired by our CFO, Anders Romberg, and driven by our
experienced Head of Sustainability and ESG, Kesah Trowell.
The ESG Steering Group aims to meet monthly and exists primarily to help mitigate risk, and to oversee the
development of a progressive ESG Strategy and ensure its successful delivery across the Group.
ESG GOVERNANCE
People
Planet
Product
We remain members of the UK Government’s All-Party Corporate
ResponsibilityGroup, facilitated by Business in the Community, and the British
Retail Consortium, who provide regulatory guidance and represent our sector’s
interests in policy discussions.
TAX MAT TERS
As part of our commitment to good governance, transparency and responsible
business practices, we are proud to hold the Fair Tax Mark certification, which
demonstrates that we pay the right amount of tax in the right place, at the right
time and that we openly communicate our tax affairs with the relevant authorities.
MATERIALITY ASSESSMENT
With hundreds of ESG indicators potentially impacting our business, we prioritise
the issues that matter most to our stakeholders and long-term success by means
of a materiality assessment.
We conducted our first materiality assessment in FY24, identifying 19 material
ESG topics through comprehensive stakeholder engagement, an internal risk and
impact analysis, and peer and regulatory benchmarking. The outcomes of our
initial assessment were reviewed in FY25 and with all identified issues remaining
relevant, no updates were made.
In FY26, we sought to evolve our approach towards a more consistent,
comparable, and decision-useful governance framework by considering ESG
issuesas part of our Group-wide risk analysis, and integrating key priorities into
our controls framework, including links to Group activities under Provision 29
ofthe UK Corporate Governance Code 2024.
This work included mapping material ESG topics against the Group’s principal
andemerging risks, as well as to key strategic priorities and business objectives.
This alignment included merging or deprioritising certain issues, resulting in a
strengthened ESG and enterprise risk management process as well as improved
oversight by Senior Management and the Board – ensuring material ESG issues
are embedded within core decision-making processes and are subject to more
consistent governance, controls and monitoring.
To enhance the clarity of our disclosures, from these material topics, we have
prioritised six ESG areas for our external reporting which have been reviewed
bykey stakeholders, including our ESG Steering Group and approved by the
ESGCommittee in February 2026.
These six topics reflect the areas of greatest strategic importance and potential
impact on our long-term success. Each priority area is aligned to our principal
risks, strategic objectives, and performance indicators. See ‘Key ESG Priorities’
table on next page.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
86
FY25 Material issue Principle risk Reason for change to ESG materiality FY26 ESG priority FY26
1 Brand and Reputation
Business Strategy Execution
and Development
Broad category considered across all ESG impacts
and managed through risk and material controls framework
– –
2 Data Protection
& Cyber Security
Data Protection
and Cyber Security
Remains a key business priority and managed through risk and material
controls framework
Data Protection
and Cyber Security
2
3 Colleague
Engagement
Colleague Talent and
Capability
A broad people issue considered across all ESG impacts
and managed through risk and material controls framework
Learning and
Development
6
4 Anti-Bribery Corruption
& Fraud
Regulatory and
Compliance
Supported through ESG Governance structure
and managed through risk and material controls framework
Regulatory and
Compliance
3
5 Anti-Money
Laundering
Regulatory and
Compliance
Supported through ESG Governance structure
and managed through risk and material controls framework
Regulatory and
Compliance
3
6 Health, Safety
and Wellbeing
Colleague Talent and
Capability
Managed through risk and material controls framework, with ESG focus
on holistic colleague awareness and compliance training
Learning and
Development
6
7 Climate Action
Climate Change To manage environmental impacts and support decarbonisation
goals and compliance, a holistic approach is required
Climate Transition 5
8 Circularity
(Repairs/Pre-owned)
Business Strategy Execution
and Development
Keeping products in circulation is a key strategic opportunity,
managed through our business strategy. ESG focus extended
to include more lower-carbon products
Lower-Carbon
Products
4
9 Training
& Education
Colleague Talent and
Capability
Training is a key enabler to achieving sustainability goals and is
managed through our risk and material controls framework.
Focus on holistic colleague awareness and compliance training
Learning and
Development
6
10 Energy Management
Climate Change Managing energy in isolation risks missing opportunities
to reduce the overall footprint through coordinated actions
Climate
Transition
5
11 Supply Chain Engagement
Key Suppliers and
Supply Chain
Holistic approach to support traceability, quality and continuity
of supply, while mitigating reputational, legal and operational
risks and meeting stakeholder expectations
Supply Chain
Transparency
1
12 Sustainable Procurement
Key Suppliers and
Supply Chain
Holistic approach to support traceability, quality and continuity
of supply, while mitigating reputational, legal and operational
risks and meeting stakeholder expectations
Supply Chain
Transparency
1
13 Biodiversity
& Nature
Climate Change To manage environmental impacts and support decarbonisation
goals and compliance, a holistic approach is required
Climate
Transition
5
14 Social Impact
Business Strategy Execution
and Development
A positive social impact protects the Group’s ‘licence to operate’
and reputation and is considered across all ESG impacts
– –
15 Diversity
& Inclusion
Colleague Talent and
Capability
Attracting diverse talent and respecting and protecting cultural heritage
in line with human rights principles is a business priority. ESG focus on
colleague awareness and training to support human rights compliance
Learning and
Development
6
16/17 Transparency and
Reporting/Traceability of
Raw Materials
Key Suppliers and
Supply Chain
Holistic approach to support traceability, quality and continuity
of supply, while mitigating reputational, legal and operational
risks and meeting stakeholder expectations
Supply Chain
Transparency
1
18 Whistleblowing &
Grievance Procedures
Regulatory and Compliance Clear escalation processes for any ESG issues arising through the Group’s
established whistleblowing and grievance processes
Regulatory and
Compliance
3
19 Packaging
Business Strategy Execution
and Development
Transition to fully sustainable packaging practices in progress to meet
regulatory requirements and align with stakeholder expectations
Lower-Carbon
Products
4
MAPPING OF FY25 MATERIAL ESG RISKS
Importance to the Group
Low High
Low High
Stakeholder expectations
KEY ESG PRIORITIES
FY26 Material issue More information
1 Supply Chain Transparency
Page 127
2 Data Protection and Cyber Security
Page 137
3 Regulatory and Compliance
Page 136
4 Lower-Carbon Products
Page 128
5 Climate Action
Page 101
6 Learning and Development
Page 91
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
87
COLLEAGUES
FY26
We are committed to building a high
performance,motivated and inclusive culture
where colleagues can thrive. Our sustainability
strategy is directly linked to our Purpose, helping
usto translate environmental and social goals
intomeaningful action.
During the year we engaged colleagues through
avariety of channels and activities, including our
intranet, regular town hall meetings, subject
matterexpert panel briefings, workshops,
workinggroups, surveys, events and community
fundraising activities.
During the year we provided training to support
ESG compliance and create visible opportunities
for colleagues to contribute ideas and actions.
Ourcolleague ESG bonus underpin is linked
toachieving ESG goals.
More information on colleague engagement
isreported on page 77.
Future Plans
– Conduct a Group-wide colleague engagement
survey
– Build on role-specific training and action plans,
with a company-wide colleague engagement
programme, to support climate transition
planning and changes in legislation
– Engage key colleagues with our Modern Slavery
Escalation Process and evolve training
CLIENTS
FY26
As sustainability, ethical sourcing and transparency
become increasingly important in client purchasing
decisions, we are committed to reassuring clients
the products they buy from us are responsibly and
ethically sourced and manufactured.
We help clients reduce their environmental impact
by promoting lower-carbon product options, such
as lab-grown diamonds, pre-owned watches and
jewellery, and by offering repairs, servicing and
designer jewellery refurbishment. We also highlight
innovations in circular design and materials through
our sales channels.
During the year, selected clients were consulted
during a review of our materiality assessment,
weenhanced our training modules for client-facing
colleagues to improve client engagement with our
ESG standards and product knowledge, and
featured recycling information on our new packaging
range to help clients minimise end-of-life impacts.
We consulted, with a number of colleagues, to gain
a better understanding of client expectations when
it comes to sustainability.
More information on client engagement is reported
on page 78.
Future Plans
– Continue to offer clients products that represent
individual values
– Improve insights into client product preferences
BRAND PARTNERS
AND OTHER SUPPLIERS
FY26
Collaboration with product and service suppliers,
including landlords and logistics providers, is key
toachieving our sustainability goals and ensuring
robust traceability mechanisms, reducing emissions
and protecting nature and biodiversity.
Our onboarding process includes collecting and
analysing key ESG data, and all suppliers must
acknowledge our Supplier Sustainability Standards.
We partner with third-party experts, such as
Slave-Free Alliance who support our approach
toupholding human rights.
Suppliers are encouraged to align with relevant,
well-recognised sustainability standards and
certifications, and we participate in industry
eventsand multi-stakeholder initiatives.
We continue to partner with the non-profit
Académie Horlogère Des Créateurs Indépendants
to help preserve traditional watchmaking, support
talented watchmakers and promote quality,
innovation and creativity.
During the year, we updated our Supplier
Operating Manual for product suppliers to include
evolving industry guidance in relation to issues
including green claims and lab-grown diamonds.
More information on brand partners and other
suppliers engagement is reported on page 78.
Future Plans
– Engage UK product suppliers with our revised UK
Supplier Operating Manual and review and
update our US version
– Continue to engage through the Responsible
Jewellery Council Standards Committee and with
the National Association of Jewellers and
Jewelers Vigilance Committee
SUSTAINABILITY GOALS
Guided by our purpose and values to ‘do the right thing, always’, we operate a responsible and ethical
business by aspiring to best practice and understanding stakeholder expectations, then making sure this
is reflected in our business decisions. Through collaboration across our industry and engagement with key
stakeholders, we aim to promote sustainability at every stage of our operations and value chain.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
88
INVESTORS
FY26
We are committed to strengthening investor
confidence in our ability to protect our reputation,
build brand trust and grow a more valuable
business over the long term. We engage with
investors, analysts and ESG rating agencies to
provide balanced insight into our strategy,
governance, sustainability priorities and
operationalperformance.
During the year, we continued to improve
transparency and support comparability by
responding to the CDP questionnaire on climate
change, as well as maintaining strong ESG rating
scores from leading providers.
Regular gap analysis and feedback gathered through
these processes help identify and inform our
material priorities while strengthening our
approach to risk management and meeting
evolvingexpectations.
More information on investors is reported on
page79.
Future Plans
– Continue to with engage investor groups and
improve our disclosures, through regular
benchmarking and gap analysis
– Align our sustainability reporting with best
practice frameworks and prepare for UK SRS 1
and 2 reporting requirements
COMMUNITIES
FY26
We are committed to being a responsible
corporate citizen and building a meaningful
andlasting positive social impact within the
communities we operate in.
As a local employer, we support the long-term
prosperity of local high streets and communities
and participate in local forums, such as the New
West End Company, a not-for-profit organisation
focused on driving growth, safety, and investment
in key London shopping streets, including the
locations of flagship showrooms in Regent Street,
and Old Bond Street.
Through our business and The Watches of
Switzerland Group Foundation, we enjoy
long-standing partnerships with a number of
charities including Habitat for Humanity in the US,
and Crisis and The Trussell Trust in the UK, as well
as The King’s Trust in both the US and UK.
During the year, we continued to support good
causes and community initiatives aligned to our
values and alleviating the impact of poverty,
donating £1.5 million in financial support, and
encouraging colleague participation in a variety
offundraising and volunteering activities.
More information on communities is reported
onpage 79.
Future Plans
– Ongoing engagement with local communities to
better understand local needs, strengthen trust
in our brand and ensure we continue to make a
positive contribution in the areas where we live
and work
– Continued social impact through our charity
partnerships
“70% of retail colleagues told us
clients are willing to spend more
on products with a strong
sustainability story.”
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
89
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
90
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
FY26 PERFORMANCE
OUR COMMITMENT TO CULTURE IS UNDERPINNED BY OUR PURPOSE
AND FOUR CORE VALUES:
GOALS AND STRATEGIES
These values guide behaviours, strengthen decision-making and form the
foundation of our culture.
Colleagues report high levels of meaning, pride and motivation, and the results
ofour most recent Colleague Engagement Survey confirms that 80% of colleagues
are proud to work for us and 74% of colleagues feel that they make a difference.
Our most recent inclusion score of 77% demonstrates our strong foundations.
During this period, we have focused on implementing the actions as a result ofour
most recent Colleague Engagement Survey, supported by smaller ‘pulse’ surveys in
departments. We were pleased to be recognised in the Great Place ToWork
®
index in the UK Large Employer category in 2025. This accolade demonstrates our
commitment to create a positive colleague experience and an enjoyable working
environment. We will undertake our next Group-wide Colleague Engagement
Survey in Autumn 2026 and the results will be published at a later date.
We continue to integrate colleagues from previously acquired businesses and this
year, 63 Deutsch & Deutsch colleagues have been welcomed into our Group.
Our colleagues are at the heart of our success. Their expertise, passion and client focus continue to define our
reputation as the market leader in luxury watch and jewellery retail. We remain committed to creating a
workplace where every colleague can join, grow and stay with our Group, supported by a culture that is
high-performing, inclusive and values-driven.
OUR PEOPLE
52%
OF SHOWROOMS WITH AT LEAST
ONE FEMALE IN LEADERSHIP
(2025:50%)
41%
COLLEAGUES FROM MINORITY
ETHNIC BACKGROUNDS (2025:38%)
26,562
GLOBAL TRAINING HOURS
52%
INCREASE IN VOLUNTEERING
HOURS TO1,726 HOURS
(2025:1,133 HOURS)
20%
GROUP ATTRITION (2025: 20%)
LEVERAGE OUR
UNIQUE CULTURE
BUILD AN
ORGANISATION
FIT FOR THE FUTURE
ATTR ACT AND
RE TAIN TALENT
GOAL
– To give colleagues every reason to join, grow and stay with our Group
STRATEGIES
WE EARN TRUST
& CONFIDENCE
WE TREAT EVERYONE
WITH RESPECT
WE CARE FOR
OUR COMMUNITIES
WE DO THE RIGHT
THING, ALWAYS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
91
TALENT, CAREERS & LEADERSHIP DEVELOPMENT
We continue to invest significantly in talent attraction, development and
progression across all regions. Our talent processes ensure robust leadership
pipelines across retail and support functions.
Highlights:
– 75% completion of UK retail performance reviews
– 30,500 colleague recognitions through VibE platform
– 53% of all new hires in the UK were female
In support of our ongoing commitment to Xenia, we have rolled out 518 hours
ofenhanced client experience training to 32 Rolex showrooms in the UK.
Career pathways have been strengthened through a new channel available
tocolleagues internally which brings together career, training, vacancies and
competencies. Our ‘Brilliant Careers’ communications platform showcases
diversecolleague journeys, inspiring growth and career progression and mobility.
Early careers investment includes increasing UK apprenticeships for 15
colleagues, three new apprenticeship pathways and continued expansion
of USwatchmaker apprenticeships.
Leadership development continues to evolve and we narrowed our focus this
yearto Xenia Client Experience Programmes, US management induction, UK
management principles training and over 11,306 hours of brand and product
training across 41 luxury brands.
We have developed a Roberto Coin e-learning app for our US business
showcasing the rich history of the brand and its extensive range. This was
launched in May 2026.
For the third year, we are proud to have been listed as a top ten employer in the
Women Leaders FTSE 250 index.
We champion meritocracy and representation across all markets. Our Employee
Resource Groups – Cultural Awareness, Gender, LGBTQ+ and Wellbeing &
Disability – continue to deliver impactful campaigns across Pride, Black History
Month, Diwali and employee representation and more. This year, the chairs and
sponsors of our representative groups met to discuss and build our diversity,
inclusion and equal opportunities strategy for the next three years which will
bepublished at a later date.
Our ‘In Conversation With’ series expanded global dialogue on topics such as
financial wellbeing, female leadership, cyber security and strengthening inclusion
across the Group.
External accreditations this year include: rated ‘1’ by ISS ESG Social QualityScore,
ranked #8 by FTSE Women Leaders Review and maintained GOLD status in the
annual Inclusion review.
WE ARE BUILDING A MERITOCRACY DEMONSTRATED BY
Leaders visibly
champion D&I
CARE
Strengthen our
inclusive culture
RESPECT
The power of brands
and our communities
HARNESS
End-to-end policy and
process alignment
EQUIP
DIVERSITY AND INCLUSION PILLARS
INCLUSION GENDER BALANCE REPRESENTATION
77% inclusivity score Leadership teams are representative
of the local community
Leadership teams are gender balanced
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
92
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
A
COMPREHENSIVE
GROUP BENEFITS
PACKAGE
Paid time off including
holiday and sick pay
Discount scheme for luxury
products and brand incentives
Health benefits
Colleague sharesave
schemes
Extra holiday
purchase scheme and
birthday off (UK)
Free 24/7 confidential
Employee Assistance
Programme
Pension contributions
Commission, bonus
opportunity for all
Free wellbeing tools
and support
Recognition scheme
TRUST AND CONFIDENCE: REWARD AND RECOGNITION
We offer a competitive global reward
package covering financial, mental and
physical wellbeing. Benefits include
commission and bonus schemes, health
and wellbeing programmes, sharesave
schemes, pension contributions and
enhanced support across regions.
Significant enhancements and focus
areas in the last year include integrating
US colleagues from Roberto Coin into
the US benefit plans and renewing
private health insurance cover for all
US colleagues.In the UK, the ‘top seller’
commission structure was expanded
further and achieved 96% retention,
and the mean gender pay gap
improved from 16% to 15%. We were
pleased to pay maximum annual bonus
to colleagues across our retail and
support operations in both the US
and UK this year.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
93
ORGANISATION, COMMUNICATIONS AND COMMUNITY
Our organisational development strategy strengthens leadership, operational
clarity and acquisition integration across the US and UK.
We have prioritised investment in IT, ecommerce, data and analytics and AI
andwe also have invested in retail capability in both regions.
In addition, we have hired significant leadership positions in the US including a new
President of North America, new VP Marketing and new VP Finance. In the UK,
we have hired a new UK Retail Director.
We continue to integrate Roberto Coin Inc., the Hodinkee business and the
newly acquired majority stake in Deutsch & Deutsch, with a focus on preserving
culture, strengthening retention and improving cross-functional collaboration.
Communication improvements include the utilisation of CONNECT, increased
town halls, anonymous feedback channels and an enhanced internal
communications strategy. In addition, Baroness (Rosa) Monckton MBE hosted skip
level meetings with colleagues in each region this year and discussed key
engagement themes such as recognition, feedback and culture.
We prioritised colleague relations during the recent showroom rationalisation,
ensuring 47% redeployment of affected UK retail colleagues.
HEALTH & SAFETY AND WELLBEING
We are committed to maintaining safety standards that comply with legislation
and enable colleagues to be confident that their workplace is safe. Our Health &
Safety Policy applies to all business activities and premises to ensure the health,
safety and welfare of our colleagues, clients and visitors. A Health & Safety
Committee comprising senior leaders from our US and UK operations meets
regularly and a rolling review and audit programme is in place. A formal
mechanism for reporting accidents is in place and we work closely with a
third-party provider. Areas completed in FY26 are noted below.
– Annual retail raid training delivered in selected locations and in partnership
withour security partners
– Low colleague accident rate of 5.3 accidents per 200,000 hours globally
including near misses
– Low sickness absence of <2.4% in the UK
– Our EAP in both regions provides access to mental health services and the UK
has enhanced access to counselling services
– 91% of colleagues agree that this is a physically safe place to work in the most
recent Great Place To Work
®
survey
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
94
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
95
96
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
The Foundation brings most of the Group’s charitable activities under one umbrella. Since 2021, the Group has
donated a total of £10.0 million to charitable causes, supporting three pillars: theprevention or relief of poverty;
the advancement of education; and the relief of those in need by reason ofyouth, age, ill-health, disability,
financial hardship or other disadvantage.
Of the £10.0 million donated by the Group to charitable causes since 2021,
£9.3million was contributed to The Watches of Switzerland Group Foundation
(‘The Foundation’). In turn, The Foundation has so far donated a total of
£7.4million to charity partners. In FY26, £1.2 million was donated to UK
partnersand $0.8 million was donated to US partners.
These donations include sponsorship of key events with The King’s Trust such as
Enterprise Challenge in the US and the UK, the Palace to Palace cycling event, and
the Group was headline sponsor of the Change a Girl’s Life campaign for a second
consecutive year. In addition, colleagues have increased volunteering hours by 52%
by spending time supporting food banks, Crisis and Habitat for Humanity,
amongst others. In FY27, we will launch our new Foundation website which will
bring the impact of The Foundation to life in more detail.
Further details can be found on thewosgroup.com.
UK STRATEGIC PARTNERS
– The King’s Trust
– Local food banks and Trussell Trust
– Fuel Bank Foundation
– Crisis
US STRATEGIC PARTNERS
– The King’s Trust
– Habitat for Humanity
– Feeding South Florida
– New York and Las Vegas food banks
THE FOUNDATION – TRUSTEES OF THE BOARD
The Trustees meet at least quarterly and have committed to an engagement calendar with our strategic partners for FY27 which includes inspirational sessions
and judging panels.
Brian Duffy
Watches of
Switzerland Group CEO,
Chair of The Foundation
Ruth Benford
Watches of
Switzerland Group Executive
Director of Marketing
David Gandy
Model and fashion expert
John Hannah
BAFTA-nominated actor
Terence Parris
Sports, brands and
diversity expert
Johnathan Joseph
(also known as DJSpoony)
DJ and radio presenter
FY26
2021
to date
Amount donated by Group to charitable causes £1.5m £10.0m
Donations from The Foundation to charities £1.8m £7.4m
Number of people helped 89,569 294,640
Volunteering hours 1,726 4,423
Other Group donations (including payroll giving
andemployer matching) £17,723 £392,141
OUR COMMUNITY
651,000
MEALS PROVIDED IN FY26
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
97
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
98
OUR PLANET
We continue to work with stakeholders to develop a
climate transition plan that integrates decarbonisation
across our operations and supply chain. This work includes
prioritising energy efficiency, improving data quality and
engaging with suppliers to reduce value chain emissions.
GOAL AND STRATEGIES
We strive to operate to the highest levels of environmental stewardship, while safeguarding against
climate-related risk and supporting a more circular economy, through our after-sales and servicing
and pre-owned businesses.
To support our transition to a low-carbon future, in FY26 our long-term net-zero targets were validated
by the Science-based Targets Initiative (SBTi) and we are beginning to see the benefits from our
investments into improving energy efficiency.
FY26 KEY PERFORMANCE HIGHLIGHTS
– Recognised as a 2025 Low-Carbon Leader by a leading global ratings provider
– Installed our first on-site solar array – which serves as a visible reminder of our
commitment to clean and reliable energy sources while cutting costs and
reducing emissions
A-
SCORE FROM CDP FOR OUR RESPONSE
TO THEIR QUESTIONNAIRE ON
CLIMATE CHANGE
A
LEADERSHIP SCORE FROM CDP ON
CLIMATE ISSUES FOLLOWING THEIR
SUPPLIER ENGAGEMENT ASSESSMENT
-2%
REDUCTION IN COMBINED SCOPE 1
AND 2 LOCATION-BASED EMISSIONS
GOALS
– Achieve net-zero emissions by 2050
– Build climate resilience
– Preserve natural resources
STRATEGIES
WE PROTECT
OUR PLANET
By working with our
industry and other
stakeholders to
minimise our impact
on the environment
WE DO THE RIGHT
THING, ALWAYS
By making the right
decisions for the benefit
of our colleagues,
stakeholders and
wider society
WE ADVOCATE FOR
OUR INDUSTRY
By proactively
promoting the interests
and responsibilities
of the luxury watch
and jewellery sectors
in our markets
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
99
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
Our emissions performance reflected strong business growth, continued progress
in operational emissions management and the ongoing challenge of decarbonising
our value chain.
Group revenue increased by 13% year-on-year at constant currency, driven in part
by 24% growth in the US market on the same basis. Against this backdrop, our total
emissions increased by 14%, reflecting higher sales volumes and associated value
chain activity – as well as increases in emissions factors within key categories such
as Purchased Goods and Services, which remained the overwhelmingly dominant
source of our emissions.
Our absolute Scope 3 emissions increased by 15% year-on-year and we recognise
deep cuts will be required to achieve our near-term science-based targets. See
more information on the following page.
Our operational emissions performance was more positive, with our combined
Scope 1 and Scope 2 emissions reducing by 2% year-on-year. Scope 1 emissions,
however, increased by 82%, largely due to showroom upgrades. Tracking these
emissions is a key area of focus for us in FY27, despite accounting for just 0.17%
of our Group carbon footprint.
NET-ZERO PATHWAY HIERARCHY
HEADLINE PERFORMANCE
GROUP EMISSIONS tCO
2
e
Offset
10%
Driven by legislation and industry bodies
Ongoing engagement with key stakeholders
On-site renewables, grid greening
& reduction in F-gases
Procurement decisions
Purchase of 100% Renewable Energy
Improve controls
Investment in energy efficiency technology
Improve supplier data & transition from spend data
Continued engagement with suppliers
FY24
Baseline
FY25 FY26
Scope 1 & 2
Scope 3
236,924
230,901
265,171
4,2634,3604,314
0.17%
460 tCO
2
e
(Up 82% year-on-year)
1.41%
3,804 tCO
2
e
(Down 7% year-on-year)
Total emissions
269,434 tCO
2
e
Scope 2Scope 1
1. 58%
4,263 tCO
2
e
(Down 2% year-on-year)
98.42%
265,171 tCO
2
e
(Up 15% year-on-year)
Scope 3
Scope 1 & 2 Combined
+14%
See page 122 for our
FY26 emissions table
OVERVIEW
During the year we continued to understand our decarbonisation levers with the aim of strengthening our pathway to
net-zero and enhancing the resilience of our Group to climate-related risks and opportunities.
– Scope 1 emissions represent less than 0.2% of our total Group footprint
– Scope 2 emissions represent 1.4% of our Group footprint
– Our primary focus remains on managing and reducing Scope 3 emissions which
represent 98.4% of our total carbon footprint
Our net-zero pathway hierarchy shows how we are targeting true reductions
in impacts, primarily emissions resulting from ‘Purchased Goods and Services’,
as well as energy consumption, which is a major contributor to emissions from
our direct operations.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
100
CLIMATE ACTION
Engagement with SBTi during the net-zero verification process resulted in a
change of Baseline Year from FY20 to FY24. This change aligns with updated SBTi
guidance and allows us to measure performance relative to the scale of our
current operations and gauge future performance against a higher quality dataset.
Our Scope 1 and Scope 2 emissions targets have been disaggregated to
improve transparency, accountability and alignment with distinct decarbonisation
pathways, with a market-based Scope 2 target to support significant reductions
in energy-related emissions. Pre-owned products are now classified as zero
emissions, reflecting new updates in product classification and further
incentivising our circularity strategy.
OVERALL NET-ZERO TARGET:
The Group is committed to achieving net-zero greenhouse gas (GHG) emissions
across the value chain by 2050.
NEAR-TERM TARGETS:
– Reduce absolute Scope 1 GHG emissions 42% by FY30 from a FY24 base year
– Source 100% renewable electricity through to 2030
– Reduce absolute Scope 3 GHG emissions 42% by FY30 from a FY24 base year
LONG-TERM TARGETS:
– Reduce absolute Scope 1 GHG emissions 90%* by 2050 from a FY24 base year
– Source 100% renewable electricity through to 2050
– Reduce absolute Scope 3 GHG emissions 90%* by 2050 from a FY24 base year
* We will aim to offset the residual 10% of emissions through permanent removal
and storage of carbon.
SCOPE 1 AND 2 EMISSIONS
Within our own operations, Scope 1 and 2 emissions reduced by 97 tCO
2
e overall.
Scope 1 emissions increased by 208 tCO
2
e which was primarily driven by
refrigerants use due to estate change activity and this is a key area of focus for
us in FY27.
Scope 2 emissions decreased by 305 tCO
2
e demonstrating continued progress
through energy sourcing and efficiency initiatives.
SCOPE 3 EMISSIONS
Our reported increase in emissions should be considered in the context of
market-driven price movements. Where spend-based factors are used to
calculate Scope 3 emissions, the cost of tariffs and rising precious metal prices
associated with premium products can result in higher reported emissions.
Consequently, we may report higher emissions for lower volume high-value
product sales, compared with larger volumes of lower-value products – even
where the underlying physical emissions associated with those products are not
directly reflected by the spend-based methodology.
Purchased Goods and Services (Category 1) contributed 231,897 tCO
2
e,
representing 87% of Scope 3 emissions and 86% our total Group footprint.
As a result, supply chain decarbonisation and transparency are the most
important levers in achieving our science-based emissions reductions targets.
During the period we continued to strengthen the quality and coverage of our
supplier emissions’ data – increasing our use of primary data where available to
improve the accuracy and representativeness of our emissions. However, our
emissions profile remains highly concentrated, with an absence of primary data
for two of our highest spend suppliers having a significant impact on our emissions.
Where primary emissions data is not currently available, emissions are estimated
using spend-based methodologies aligned to recognised accounting standards.
In FY26, applicable spend-based emissions factors increased by 19%, which also
contributed to higher Category 1 emissions. This emissions factor adjustment,
combined with strong sales resulted in the steep year-on-year increase in our
Scope 3 emissions.
While the above factors affected our reported emissions performance in FY26,
they also provide greater visibility into our value chain and support more targeted
supplier engagement. Expanding primary data coverage, strengthening supplier
collaboration and the introduction of emissions estimation methodologies in line
with the GHG Reporting Protocol in FY27 should improve the accuracy of our
reporting and support progress towards achieving our science-based targets.
In addition, continued business growth and an increase in emissions factors for
various commodities led to an overall increase in capital goods expenditure,
resulting in an annual 4% increase in Category 2 emissions.
As well as improved controls and supplier engagement, we anticipate ongoing
regulatory developments and the continued maturation of sustainability reporting
frameworks will support greater consistency and transparency across our
supplier base.
The table on page 122 provides a detailed breakdown of our Scope 1, 2 and 3
GHG emissions by activity, calculated with reference to the GHG Protocol.
SCENARIO ANALYSIS
During the year, we refreshed and updated our Climate Scenario Analysis
(CSA) across all Group locations to reflect updated market, policy and
technology assumptions and further strengthened our emissions measurement
methodologies and internal controls.
We also continued to engage relevant stakeholders through workshops and
one-to-one interviews to identify emerging climate-related transition risks
and opportunities.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
101
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
ENVIRONMENTAL IMPACTS AND PERFORMANCE
Activity Impacts Commitment and action
Energy
Management
Direct energy use accounts for the majority of Scope
2 emissions, while energy price volatility can increase
operating costs.
Our retail estate uses the most energy, where
lighting, heating, ventilation, air conditioning, and
payment and security systems are essential to
product presentation, client experience and
asset protection.
We are committed to using energy in an efficient, cost-effective and responsible
way throughout our estate.
Our energy management system includes improving data collection and use,
and implementing energy efficient technologies such as LED lighting and motion
sensors to reduce energy waste. We are also gaining real-time insights through
smart metering and EnOS™ platforms to enhance billing accuracy and
performance, and identify opportunities to generate energy onsite.
Our efforts to conserve energy and reduce GHG emissions are continually
reviewed and supported by colleague awareness initiatives and targeted training.
Refrigerants Use
Refrigerant use was the primary driver of the 82%
increase in Scope 1 emissions during the year.
While Scope 1 emissions represent less than 0.2%
of the Group’s total carbon footprint, effective
management remains important as refrigerants can
have a high global warming potential and even small
leaks can result in disproportionately large emissions.
We are committed to the safe, environmentally responsible and legally
compliant management of refrigerants used in our heating, ventilation and air
conditioning (HVAC) systems.
We invest in lower-GWP (Global Warming Potential) systems across all
new sites and regularly service HVAC systems in line with manufacturers’
specifications. We regulate HVAC temperatures and use R32 refrigerant gas,
while maintaining R410 in existing equipment. We proactively manage recharging
and review reactive repairs case by case, upgrading our equipment where it
makes business sense.
Facilities
Management
Effective property management and strong
relationships with landlords are fundamental to the
smooth running of our properties and achieving
environmental goals.
When searching for new premises and negotiating leases, we prefer properties
with green building certifications, which demonstrate a landlord’s commitment
to environmental performance, including energy efficiency, water use and the
sustainability of raw materials.
Our in-house facilities management teams proactively engage landlords to
ensure properties are well maintained. They also ensure negative environmental
impacts such as HVAC leaks, waste management, disruptions to water supplies
or irregular energy use, are mitigated and managed.
All sites are subject to regular, internal and independent assessments to ensure
conformance with all relevant national and international laws, and our own
health, safety and environmental standards.
Water
As a retailer, our direct water use is relatively low
with an estimated 175,000m³ consumed across our
Group. Potential impacts include rising water costs,
inability to trade due to supply disruptions and
regulatory penalties.
Over the longer term (>10 years), risk of water stress
resulting from extreme heat in some US sites has
been identified.
Water security poses a significant risk in our supply
chain, where refining metals and polishing gemstones
are water intensive.
We are committed to reducing water use, managing local water risk and
improving water stewardship across our operations and supply chain.
We seek to reduce water use wherever possible and leverage available water
meter data to identify sites with excessive water use and resolve issues, such as
leaks. To date, we have not yet aggregated and reported water use for all sites,
due to poor data quality in some locations, for example, where water supply is
billed directly to a landlord.
All suppliers are required to address the prevention, mitigation and control
of serious environmental and health impacts resulting from their operations in
relation to water use. They are also expected to assess exposure to water risks,
monitor consumption, minimise waste and conduct wastewater quality testing
and/or monitoring as required by local law.
Waste
Management
We generate comparatively low waste volumes in
our operations, accounting for less than 1% of Scope
3 emissions.
However, ineffective waste management systems
can expose us to regulatory and reputational risks,
environmental harm and increased costs through
waste collection, recycling and landfill charges.
We are committed to the responsible collection, transportation, monitoring,
disposal and recycling of waste, and have waste management arrangements in
place with landlords and certified waste management companies at all sites.
Where specific site data is unavailable, such as shared waste management
facilities, we continue to record waste volumes on-site, supported by waste
management awareness training.
In addition to minimising waste and promoting circularity, we are working to
more accurately quantify our waste volumes to gain a better understanding
of the types of materials recycled and resources diverted from landfill.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
102
Metrics and targets FY26 developments FY26 performance FY27 actions
– Reduce energy intensity year-on-year
on a like for like basis
– S
ource 100% renewable energy,
backed by guarantees of origin across
our Group
– Rolled out EnOS™ to 45 UK sites
– Compliance with Phase 3 of the UK
Energy Savings Opportunity Scheme
(ESOS)
– First solar array installed in February
2026 generating energy on-site at
our Carlton Park Support Centre
(See page 106 and 107)
– T
otal KWh across the Group
reduced by over 6% year-on-year,
with a 10% increase in the US, largely
due to the opening of three Roberto
Coin showrooms and our acquisition
of four Deutsch & Deutsch
showrooms
– S
ourced 100% renewable energy,
backed by guarantees of origin,
across our Group
– C
omplete roll-out of EnOS™
system across 11 US sites
– Continue to source 100% renewable
energy
– C
onsider wider roll-out of EnOS™
across the Group
– Reduction in fluorinated gases
(F-gases) to align with net-zero
by 2050
– Continued investment in low-GWP
HVAC systems in new and
refurbished showrooms
– Introduced EnOS™ in highest
energy-consuming sites to monitor
HVAC use at an asset level
– 82% increase related to refrigerant
emissions reflecting estate change
activity, including site/showroom
refurbishments, showroom closures
and strip-out works, as well as a
refrigerant leak and recharge event.
Emissions were also influenced by
legacy equipment using higher-GWP
R410A refrigerant
– Formalise Refrigerant
Management Policy
– S
chedule investment in
replacement of low-GWP
HVAC systems by 2050
– All sites reviewed for exposure
to extreme weather events and
appropriate contingency plans in
place until lease expiry
– E
ngage landlords with green building
certifications and standards
– Updated UK internal Health, Safety
and Environment Policy
– 100% sites reviewed for exposure
to extreme weather events
– 8
1% of landlords report holding
green building certifications
– Formalise Showroom Fit Out
and Refurbishment Policy
– U
pdate US internal Health, Safety
and Environment Policy
– Measure freshwater intensity across
all sites by 2030 and monitor usage
– I
mprove transparency and reporting
– Identified UK sites with poor water
data availability
– A
ssessed all Group sites against the
physical risk of water stress over the
short, medium and long term
– Identified suitable Automated Meter
Reading (AMR) technology to
monitor water use, improve data
accuracy and performance
– I
dentified a risk of water stress
in some US sites
– No incidents of non-compliance with
water quality or quantity permits,
standards or regulations reported
– I
nstall AMR technology into 51 UK
locations, monitor and report use
– Understand impact on US sites from
water stress
– C
ontinued supply chain engagement
on water use
– Zero waste to landfill across
our Group by 2030
– R
eport waste streams where data
is available
– Continued engagement with
landlords and waste management
companies
– Visited Heathrow Airport recycling
facility to understand waste
management practices within
shared facilities
– Improved waste management
practices resulted in a 44% decrease
in waste tonnage
– 1% of Group waste was diverted
to landfill
– Ongoing engagement with landlords
and waste management companies
to more accurately record and
monitor waste streams and volumes
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
103
Activity Impacts Commitment and action
Hazardous
Waste
A small amount of hazardous waste, such as
chemicals, metal residues and cleaning agents is
generated in our silver workshop and repair centres.
The overall volume of WEEE we handle is very low
and is predominantly old office technology due to the
mechanical nature of the majority of watches we sell.
We comply with all applicable national and international environmental laws and
regulations, including the collection, treatment and disposal of hazardous waste.
We enable and encourage WEEE recycling and in the US, we recycle all
electronics to the standards of the Environmental Protection Agency (EPA),
Occupational Safety and Health Administration (OSHA), and federal and state
laws. We also partner with licensed contractors who operate an infrastructure
of ISO 9001, ISO 14001 and OSHAs accredited hazardous waste treatment
sites.
Air Pollution
Our direct operations produce minimal air pollution,
with our biggest impact from transport and our
wider supply chain.
We monitor and report relevant emissions such as refrigerant leaks (HFCs) and
transport-related air pollutants where applicable, in line with regulatory
requirements. Fine metal particles are filtered at source and collected for
recycling within our silver workshop.
Packaging
Packaging (together with batteries and leather)
accounts for just 0.011% of Scope 3 ‘End-of-Life’
emissions yet is a highly visible part of our brand
identity – and subject to reputational and legislative
impacts if not produced to a high standard in an
environmentally sustainable way.
It is used for wholesale distribution, retail shopping
bags, and as own brand product presentation boxes.
Many branded watch boxes are considered part of
the product and retained as storage.
We are committed to introducing high-quality, sustainable packaging solutions
where possible, while reducing any excess packaging to help reduce waste,
conserve resources and minimise pollution.
In the UK, our Goldsmiths packaging is now fully recyclable and FSC certified,
with all other Group brands using recyclable materials that must be separated
before disposal. In the US, we continue to work through packaging stocks and
engage packaging suppliers with our sustainability standards to ensure
consistency and leverage the cost benefits of scale.
Our principal packaging suppliers operate to ISO 9001 and ISO 14001 quality
standards, and we are fully compliant with The UK Producer Responsibility
Obligations (Packaging Waste) Regulations 2007, through the registered
compliance scheme.
Biodiversity
and Nature
While our direct impact on nature is very low, there
is a greater risk of negatively impacting natural capital
within our supply chain.
Identified impacts include the extraction of metals
and gemstones, freshwater processing, obtaining
leather for watch straps, and deforestation to provide
paper and wood for packaging and store fixtures.
We are committed to protecting nature and biodiversity and continue to
understand related risks and opportunities within our value chain, to ensure
they are incorporated into our strategic planning, risk management and asset
allocation decisions.
Biodiversity and nature impacts are an important factor when procuring
products and services, as well as in the design and modification of our
showrooms, offices, equipment and processes.
We will not tolerate any harsh or inhumane treatment of animals, and all
suppliers must conform to relevant international laws and have processes in
place to protect endangered species and habitats.
Transportation
Transport accounts for 3% of our Scope 3 emissions
including Upstream Transport and Distribution
(1.1%), Business Travel (0.7%) and Colleague
Commuting (1.4%).
These journeys can take place by road, rail, sea and
air. Our vehicle fleet is operational in the UK only,
with the exception of one lease car within our
Roberto Coin Inc. business.
Within our direct operations, initiatives to reduce road and air travel include
transitioning to a fully electric or alternative fuel vehicle fleet, limiting colleague
air travel, and encouraging car sharing and the use of public transport wherever
practical.
We operate a salary sacrifice car benefit scheme in the UK, offering colleagues
the option of leasing a tax-efficient low emission vehicle. In addition, our cycle to
work scheme allows colleagues the opportunity of purchasing a tax efficient
bicycle and accessories.
Video conferencing capabilities support flexible working and digital meetings,
and our Luxury Watch and Jewellery Virtual Boutique allows clients to interact
with expert sales assistants and purchase products without the need to travel
to showrooms.
Within our supply chain, supplier partners are encouraged to continually improve
the environmental efficiency of their transportation and logistics, such as
committing to EV100, and have mitigations in place should severe weather impact
on our ability to deliver on our clients’ expectations and transport products.
ENVIRONMENTAL IMPACTS AND PERFORMANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
104
Metrics and targets FY26 developments FY26 performance FY27 actions
– Improve reporting of hazardous
waste volumes
– D
onate unwanted office technology
to local causes
– Old office technology was donated
to local causes or salvaged and
resold. No devices were sent
to landfill
– Within the UK, 36 retired laptops
were donated to local charities and
over 400 devices were salvaged and
resold
– Aggregate and report hazardous
waste volumes across the US and
UK
– Coordinate US and UK charitable
donations
– Zero non-conformances with air
pollution regulations and standards
– Zero non-conformances with air
pollution regulations and standards
– Formalise Refrigerant Management
Policy
– Fully recyclable own-brand packaging
across the Group
– First fully recyclable own brand
packaging rolled out across our UK
Goldsmiths business
– Fully recyclable own-brand packaging
rolled out across our UK Goldsmiths
business
– Transition to fully recyclable
packaging in our Mappin & Webb
business
– Progress transition to fully recyclable
packaging in the US
– Alignment with the
recommendations of The Taskforce
on Nature-Related Financial
Disclosures (TNFD) by 2027
– Continued to offer a range of
product options to suit individual
client values
– Incorporated our policy on animal
welfare and the Convention on
International Trade in Endangered
Species (CITES) in the revision of our
Supplier Operating Manual
– Nature and Biodiversity assessed for
materiality
– Formalise Showroom Fit Out and
Refurbishment Policy
– C
ontinue to engage suppliers to
ensure they consider the protection
of nature throughout their operation
and supply chain
– 100% of Group vehicle fleet EV or
hybrid
– Y
ear-on-year increase in home
deliveries by EVs
– 100% of logistics companies with
emissions reductions targets
– N
ew Travel and Expense Policy
requires colleagues to consider more
sustainable travel options
– P
artnered with Trainline for Business
as the preferred method for booking
rail travel and Booking.com for
Business to improve operational
efficiency and sustainability
– 9
5% of Group vehicle fleet EV or
hybrid (98)% in the UK), resulting in
a 39% decrease in related emissions
– 1
1% decrease in emissions from
colleague commuting
– 1 tCO
2
e diverted through low
emission taxis booked via Uber
for Business
– 38% of home deliveries in the UK
made by EVs, marginally increasing
year-on-year and avoiding
approximately 1.9 tCO
2
e
– 100% of logistics companies with
emissions reduction targets
– T
ender for online travel booking tool
to drive operational efficiencies
across the Group and enhance our
emissions reporting
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
105
EV CHARGERS
95% of our Group vehicle fleet is now electric
or hybrid, supported by charging points across
key Support Centre sites on a preferential
tariff for colleagues. We also operate a salary
sacrifice car benefit scheme in the UK,
providing colleagues with the option of
leasing a tax-efficient low emission vehicle.
IMPROVING OUR OPERATING PERFORMANCE
To support our decarbonisation goals and transition to a cleaner, greener business, we continue to invest in
initiatives to reduce our operational impact throughout our estate.
Our Carlton Park Support Centre was identified as one of the most energy intensive buildings in our portfolio and
now benefits from multiple technological enhancements – driving down energy costs and carbon emissions, while
protecting us against energy volatility.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
RENEWABLE ENERGY
All our sites are powered by 100% renewable
energy, backed by guarantees of origin in line with
our science-based Scope 2 target to continue to
source clean energy until 2050.
SOLAR INSTALLATION
Our first solar array will generate approximately
300,000 kWh of renewable electricity on-site
and power over 30% of the building’s energy
every year, while cutting energy costs, reducing
our reliance on grid energy and supporting
energy resilience. The 696 solar panels will
also prevent almost 52,500 kg of CO
2
e from
entering our atmosphere.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
106
MOTION SENSORS
All Group sites are fitted with motion sensor
technology which automatically turns lights on
when they sense activity and off when spaces are
unoccupied. These sensors typically save between
30% and 60% on lighting energy in indoor spaces
and up to 90% in areas with less activity such
as storerooms.
LIGHT-EMITTING DIODES (LEDS)
Across our Group, almost all properties we
control are fitted with LEDs – highly efficient
electrical components that convert electricity
directly into light rather than wasting most of
it as heat.
WASTE
Waste is separated on-site and collected by
waste management companies. During the year,
we reduced our Group waste intensity ratio per
square foot from 0.0005 in FY25 to 0.0004 with
just 1% being diverted to landfill.
ENERGY OPERATING SYSTEM (ENOS™)
An EnOS™ uses intelligent data-driven insights to
reduce energy consumption and related emissions
at an asset level. This system is supporting energy
optimisation through actionable insights and
automated savings across 45 UK sites identified as
having the highest energy consumption. Since our
initial ten site trial in October 2024, the system has
delivered a 19% reduction in energy use, £115,000
of cost savings and avoided approximately
80 tCO
2
e of emissions. 11 US sites will benefit
from this technology early in FY27. We anticipate
achieving estimated energy savings of 8-10% over
a three-year period across our portfolio.
VARIABLE REFRIGERANT FLOW SYSTEM
AND HEAT PUMP
Our Variable Refrigerant Flow (VRF) system
automatically adjusts output to match real-time
building demand, while a heat pump provides
hot water by using electricity to extract existing
thermal energy from the outside air and
transferring it indoors.
CYCLE TO WORK
Changing facilities and cycle parking support
a lower emission commute. We also operate
a tax efficient cycle to work scheme.
PROCUREMENT FUNDS
We leverage energy procurement funds to buy
gas and electricity more efficiently. This enables
us to combine buying power with other businesses
and gain access to wholesale energy prices with
the help of energy experts. These funds shield
us from price increases, while allowing us to take
advantage of market dips and allowing us to
benefit if prices fall. In FY26, we saved over
£220,000 in the UK with this approach.
SMART METERING
Half hourly (HH) smart meters help us gain
real-time insights into energy use – helping
to improve billing accuracy and highlight cost
saving opportunities. To date, over 40%
of properties in the UK record energy
consumption on a half hour basis, with
the remaining 60% planned for FY27.
11%
DECREASE IN EMISSIONS FROM
COLLEAGUE COMMUTING
ACROSS OUR GROUP
2%
REDUCTION IN GROUP
ELECTRICITY, GAS AND FLEET
(KWH)
95%
GROUP VEHICLE FLEET EV
OR HYBRID
44%
LOWER WASTE GENERATED
IN OUR GROUP OPERATION
(TONNES)
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
107
Climate change remains a principal risk and strategic consideration for our
business, our stakeholders and the markets we operate in.
The following disclosure is intended to provide transparent, decision-useful
information to investors and other stakeholders regarding climate-related risks
and opportunities. It has been prepared in alignment with the recommendations
of the Task Force on Climate-Related Financial Disclosures (TCFD), which
underpin the global baseline established by the International Sustainability
Standards Board.
COMPLIANCE STATEMENT
In meeting the requirements of the UK Listing Rules 6.6.6R(8), we conclude we
are fully aligned with the TCFD reporting recommendations for the accounting
period ended 3 May 2026.
In the table below, we set out details of the TCFD reporting recommendations
against the 11 disclosure requirements, along with the UK Government’s ten
Climate-Related Financial Disclosure (CFD) requirements. In doing this, we
referred to the documents in the UK Listing Rules guidance notes, taking into
account the 2021 TCFD all sector guidance.
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
Pillar Disclosure Recommendation/Requirement Aligned Read more
Governance TCFD (1) Describe the Board’s oversight of climate-related risks and opportunities Page 109
CFD (1) Describe the Group’s governance arrangements in relation to assessing and managing climate-
related risks and opportunities
Page 109
TCFD (2) Describe management’s role in assessing and managing climate-related risks and opportunities
Page 109
Risk
Management
TCFD (3) Describe the organisation’s processes for identifying and assessing climate-related risks
P a g e 111
CFD (2) Description of how the Group identifies, assesses, and manages climate-related risks and
opportunities
P a g e 111
TCFD (4) Describe the organisation’s processes for managing climate-related risks
P a g e 111
TCFD (5) Describe how processes for identifying, assessing, and managing climate-related risks are
integrated into the organisation’s overall risk management
P a g e 111
CFD (3) Description of how processes for identifying, assessing, and managing climate-related risks are
integrated into the Group’s overall risk management process
P a g e 111
Strategy TCFD (6) Describe the climate-related risks and opportunities the organisation has identified over the
short, medium, and long term
P a g e 112
CFD (4) Description of 1) the principal climate-related risks and opportunities arising in connection with
the Group’s operations, and 2) the time periods by reference to which those risks and
opportunities are assessed
P a g e 112
TCFD (7) Describe the impact of climate-related risks and opportunities on the organisation’s businesses,
strategy, and financial planning
P a g e 112
CFD (5) Description of the actual and potential impacts of the principal climate-related risks and
opportunities on the Group’s business model and strategy
P a g e 112
TCFD (8) Describe the resilience of the organisation’s strategy, taking into consideration different climate-
related scenarios, including a 2°C or lower scenario
P a g e 112
CFD (6) An analysis of the resilience of the Group’s business model and strategy, taking into consideration
different climate-related scenarios
P a g e 112
Metrics and
Targets
TCFD (9) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in
line with its strategy and risk management process
Page 120
CFD (7) KPIs used to assess progress of targets used to manage climate-related risks and realise climate-
related opportunities and a description of the calculations on which those key performance
indicators are based
Page 120
TCFD (10) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks
Page 120
TC F D (11) Describe the targets used by the organisation to manage climate-related risks and opportunities
and performance against targets
Page 120
CFD (8) Description of the targets used by the Group to manage climate-related risks and to realise
climate-related opportunities and of performance against those targets
Page 120
Key
Yes No
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
108
GOVERNANCE
TCFD (1) Board’s oversight of climate-related risks and opportunities
CFD (1) Governance arrangements in relation to assessing and managing
climate-related risks and opportunities
TCFD (2) Management’s role in assessing and managing climate-related
risks and opportunities
The Board holds overall responsibility for risk management and oversight of
climate-related risks and opportunities, including physical and transition risks.
It meets quarterly and ensures climate-related considerations and goals are
incorporated into the Group’s strategic decision-making, including long-term risk
assessment, enterprise risk management, long-term planning and capital allocation.
Oversight is supported by relevant committees, primarily our Audit & Risk
Committee which monitors environmental stewardship and principal risks as
part of the Group’s broader risk management framework. Our ESG Committee
is where other identified climate-related risks are assessed and monitored.
This approach ensures the Board is kept informed and regularly reviews
climate-related matters, including regulatory requirements and progress
against metrics and targets.
The Group’s annual bonus scheme is based on Adjusted EBIT and includes an ESG
underpin of 10%. For more details see the Directors’ Remuneration Committee
report on page 184. Achievement of our targets is further incentivised through
the Group’s sustainability linked loan facility, which aligns with our net-zero
trajectory through to 2028. The Group’s net-zero target was approved by
the ESG Committee in October 2025, followed by approval of our annual
sustainability performance targets in January 2026. The Group’s governance
structure is illustrated on page 110.
On 19 February 2026, Paul Edgecliffe-Johnson joined the Board as a
Non-Executive Director and, from 1 March 2026, assumed the role of Chair
of the Audit & Risk Committee, bringing extensive experience in climate-
related matters and associated financial disclosures.
As part of our ongoing risk identification and management framework described
on page 111, the Group undertakes regular horizon scanning to assess potential
inherent climate-related risks and opportunities that could impact on our
business and/or wider industry. To properly understand these risks and identify
opportunities, we use qualitative and quantitative CSA considering different
climate-related scenarios, detailed on pages 113 to 115.
Responsibility for judging the severity of the impact of climate-related issues
on our business sits with key Senior Management, who possess practical working
knowledge and key management collaborates as part of a cross-functional Planet
Working Group, which is supported by specialist experts who help conduct
our analysis.
The Planet Working Group regularly interacts and formally meets bi-monthly
to assess, monitor and manage climate-related risks and opportunities across
the Group’s operations and supply chain. Progress updates are reported into
the executive-level ESG Steering Group to ensure climate-related issues
and opportunities are monitored and escalated appropriately, sustainability
considerations are embedded into operational decision-making, and that the
Board maintains oversight of the Group’s exposure to risks and opportunities.
During the year, the Group undertook work to support future reporting under
UK Sustainability Reporting Standards (SRS) S1 & S2 climate-related disclosures,
including enhancements to our climate-related financial impact assessment,
scenario analysis and risk quantification methodologies. Given our operations
in the US, the ESG Committee also assessed the potential applicability of the
California Climate Corporate Data Accountability Act and the California
Climate-Related Financial Risk Act to support compliance where required.
The Group’s climate strategy was found to be aligned with requirements.
Annual performance
FY26 goal Complete Progress update
Set a net-zero science-based target across all Scopes and re-apply
to the SBTi for approval
Targets validated by SBTi in January 2026
Switch from location-based to market-based near-term emissions
reduction targets
New Scope 2 SBT to source 100% renewable electricity across our
Group through to 2050
Renew Climate Scenario Analysis (CSA) of our business
operations including Roberto Coin Inc.
CSA of all US and UK sites completed in December 2025. The four
newly acquired Deutsch & Deutsch showrooms will be included in
our FY27 analysis
Roll out EnOS™ technology in our most energy intensive sites to
improve energy efficiency
EnOS™ technology operational across key locations in the UK and US
Generate on-site renewable energy at our Carlton Park Support
Centre
Generating renewable energy on-site from February 2026
Continue to develop our strategic Climate Transition Plan aligned
with Transition Plan Taskforce (TPT) recommendations
Internal plan drafted in line with key TPT guidance
Maintain or improve on our CDP climate change B score and
continue to identify areas for improvement
Achieved A- for climate change and A for Stakeholder Engagement
in 2025
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
109
Chaired by Ian Carter and attended by Non-Executive Directors, CEO Brian Duffy and CFO Anders Romberg
Overall responsibility for climate-related policy, mitigation of key climate-related risks and leveraging opportunities
BOARD
AUDIT & RISK COMMITTEE
Chaired by Non-Executive Director,
Paul Edgecliffe-Johnson
– Considers climate-related risks
as part of the review of principal
and emerging risks
– Oversees compliance and
progress on reporting
– Reviews internal controls
and provides accountability
TRADING BOARD ESG STEERING GROUP
Chaired by CFO, Anders Romberg
– Defines climate-related goals, targets and KPIs over the short, medium
and long term and monitors progress
– Ensures actions to manage identified climate risks and opportunities are
embedded into Group risk management processes, core business strategy
and financial decision-making
Chaired by CEO, Brian Duffy
– Agrees environmental goals, targets and KPIs
– Embeds actions to manage climate-related risks and opportunities into core
business strategy
PRODUCT WORKING GROUP
ALL COLLEAGUES
Led by Executive Director Global Buying and Merchandising, Jim Crichton
– Supports delivery of actions to meet goals and targets
– Identifies opportunities to collaborate across the value chain to increase
climate resilience and create shared value
– Advocates climate resilience for our industry
– Help achieve goals and feedback areas for improvement
PLANET WORKING GROUP
PEOPLE WORKING GROUP
Led by CFO, Anders Romberg
– Supports delivery of actions to meet goals and targets
– Identifies opportunities to increase climate resilience and leverage
opportunities and assesses how they impact the business and value chain in
the short, medium and long term
– Champions positive behaviour changes
– Embeds climate change culture and mindset
Led by Human Resources Executive Director, Philippa Jackson
– Helps achieve goals and feedback areas for improvement
KEY COLLEAGUE LEADS & EXPERTS
Coordinated by Head of Sustainability and ESG,
Kesah Trowell
– Identifies climate-related risks and opportunities
and assesses how they impact the business and
value chain in the short, medium and long term
– Develops action plans to deliver environmental
targets, and tracks progress against targets
– Establishes and reviews effective mitigation
and controls to manage climate risks
– Day-to-day delivery of climate goals
and management of climate-related risks
and opportunities
REMUNERATION COMMITTEE
Chaired by Non-Executive Director,
Tea Colaianni MBE
– Considers climate-related targets
when determining the ESG
underpin related to the Group
annual bonus
– Ensures incentive framework
motivates colleagues
– Renews and approves
performance measures for
incentive schemes to align with
strategic objectives
ESG COMMITTEE
Chaired by Non-Executive Director,
Baroness (Rosa) Monckton MBE
– Meets at least three times a year,
with an additional meeting for
training where appropriate
– Ensures alignment between the
Group’s Purpose and business
strategy
– Assesses the effectiveness of
sustainability strategy and
governance, including climate-
related issues
– Approves Climate Strategy and
related targets
– Reviews progress against set targets
– Reviews key climate-related risks
and opportunities
– Oversees adaptation and mitigation
strategies
– Ensures appropriate action
to meet goals and KPIs
– Ensures adequate resource
and funding is in place
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
The following governance structure shows the responsibilities of individual Committees and Working Groups as
well as the frequency of discussions to ensure climate governance is embedded within corporate decision-making.
More detailed information about the wider role of the Board and Board Committees can be found on page 159
of these Annual Report and Accounts.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
MEETING FREQUENCY
Q
Quarterly / four times a year
AW
As and when required
W
Weekly
3X
At least three times a year
6X
At least six times a year
W
AW
Q AW
Q AW
Q AW
3X Q3X
6X
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
110
All members of the Audit & Risk Committee and the majority of the ESG
Committee are Non-Executive Directors to ensure an independent perspective
on the governance of climate-related risks and opportunities. More information
about their responsibilities can be found on pages 156 and 157. Details of our risk
management processes and governance can be found on page 138 to 140.
RISK MANAGEMENT
TCFD (3) Processes for identifying and assessing climate-related risks
CFD (2) Identifying, assessing and managing climate-related risks and
opportunities
TCFD (4) Processes for managing climate-related risks
TCFD (5) Processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk
management
CFD (3) Processes for identifying, assessing, and managing climate-related
risks are integrated into the Group’s overall risk management process
The Group considers climate change as a principal risk. As such, our approach to
the identification, assessment, mitigation and management of climate-related risks,
is integrated into our established enterprise risk management framework and
embedded into our core business strategy and operation.
Our principal risk management process is led by the Director of Audit & Risk, with
key risks and mitigations reported to the Audit & Risk Committee. This process is
detailed on the opposite page. We use the TCFD reporting framework to identify
specific climate-related transition risks (political and legal, technology, market and
reputation) and physical risks (acute and chronic), along with opportunities arising
from the transition to a low-carbon economy (resource efficiency, energy source,
products/services, markets and resilience) across our value chain.
All geographies are considered during our climate-related risk identification
process, which includes:
– Ongoing assessments of current and emerging climate-related regulation
– Mapping of critical business functions, such as logistics
– Supplier screening using agentic AI to monitor climate risks and resilience
measures
– Quantitative and qualitative CSA across strategic locations as appropriate
During our climate-related risk management process, we:
– Identify and examine the impact of current and emerging climate-related issues
on our business strategy and operation
– Gather and assess stakeholder insights to define the size and scope of
climate-related risks against the Group’s risk assessment criteria
– Prioritise risks based on materiality (likelihood versus impact) and time horizons
– Register identified risks and assign risk owners and metrics to monitor risk
management progress
– Evaluate the effectiveness of controls on an ongoing basis
– Engage relevant leadership teams and experts (where necessary) for further
insight and accountability
Identified climate-related risks sit within detailed risk classification frameworks
with financial boundaries. The severity of physical and transition climate-related
risks are determined by considering the likelihood of the risk materialising within
a specified time horizon, along with any potential legislative, operational,
reputational and/or financial impacts. The financial impact of a risk includes
potential costs, including risk mitigation and management, as well as any possible
repair or replacement costs or loss of revenue.
This holistic approach provides us with an overall risk severity score from
‘negligible’ to ‘severe’ to allow for the prioritisation of mitigations within our
business strategy, and ensure any necessary funding is assigned and integrated
into our financial planning.
Our Group risk classification scoring is as follows:
Financial impact EBIT impact Likelihood
1 Negligible < 1% of EBIT 1 Rare
2 Minor 1-5% of EBIT 2 Unlikely
3 Moderate 5-10% of EBIT 3 Moderate
4 Major 10-20% of EBIT 4 Likely
5 Severe > 20% of EBIT 5 Almost certain
Climate-related risks are prioritised using impact ratings of Low, Medium or High,
with High risks being escalated to the Board through the Audit & Risk Committee
and ESG Committee, to be governed as principal risks. Key opportunities are
also highlighted.
Low and Medium risks are captured in our ESG risk register, with key
management leads taking responsibility for integrating mitigating actions into
the Group’s business strategy and day-to-day operation to minimise any adverse
exposures and ensure opportunities are fully explored and leveraged.
Risks are mapped to metrics, which are assigned to responsible business owners
to allow for progress to be monitored in line with our risk management process
and business strategy and planning.
Our ESG Steering Group meets at least six times a year to provide Executive-
level oversight, including the consolidation and consideration of insights regarding
current and emerging climate-related risks and opportunities. It provides
transparency of progress against metrics and prioritised actions by reporting key
updates to our Trading Board to ensure alignment with the Group’s financial
planning and business strategy.
Climate-related risks and opportunities are monitored on an ongoing basis,
enabling us to identify changes quickly and respond effectively.
During the year, the Group refreshed and updated its CSA to reflect updated
market, policy, and technology assumptions, and further strengthened our
emissions measurement methodologies and internal controls.
We also continued to engage relevant stakeholders through workshops and
assessments to identify emerging climate-related transition risks and opportunities,
and conducted CSA screening across all Group locations (including all sites of our
Roberto Coin Inc. business) to assess the exposure to all 28 physical climate hazards
listed under the EU taxonomy. Our findings are reported on pages 102 to 105.
In January 2026, the Group completed the acquisition of a majority stake
in Deutsch & Deutsch, a family-owned luxury watch and jewellery business
operating four showrooms across Texas. As part of the integration process,
assets will be assessed under the Group’s TCFD-aligned framework.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
111
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
STRATEGY
TCFD (6) Climate-related risks and opportunities identified over the short, medium, and long term
CFD (4) Principal climate-related risks and opportunities arising in connection with the Group’s operations, and the time periods by reference
to which those risks and opportunities are assessed
TCFD (7) Impact of climate-related risks and opportunities on our businesses, strategy, and financial planning
CFD (5) Actual and potential impacts of the principal climate-related risks and opportunities on the Group’s business model and strategy
TCFD (8) Resilience of our strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario
CFD (6) Analysis of the resilience of our business model and strategy, taking into consideration different climate-related scenarios
The Group operates as a retailer of luxury watches and jewellery, which are high-value, low-volume products designed for longevity. We lease and maintain a network
of 191 showrooms across the US and UK, supported by 12 non-showroom locations. Our supply chain is primarily concentrated in Switzerland, as well as other
international manufacturing locations with strong regulatory compliance and sourcing standards.
Our principal exposure to climate-related risks arises through our upstream value chain, which is responsible for 98% of our Scope 3 emissions, alongside exposure
to physical and transition risks within our retail and distribution network.
We consider climate-related risks and opportunities across the short (<5 years), medium (5-10 years) and long term (>10 years) in alignment with our five-year
business planning cycles. These time horizons were considered according to our sector, the life span of our assets, the type of the climate-related risks and
opportunities we face, and the geographies in which we operate.
Impact time horizon Year from Ye ar to Duration Summary of potential financial impacts
Short-term FY27 FY31 <5 years
Transition risks during this period include evolving regulatory requirements, such as
mandatory energy efficiency and climate disclosures, increased operating costs associated
with energy use and reputational damage arising from unsubstantiated environmental
claims. Physical risks are limited but include acute weather events that may disrupt
showroom operations and logistics. Opportunities include near-term energy efficiency
improvements and cost savings, as well as the sale of low-carbon products.
Medium-term FY31 FY36 5-10 years
Transition risks are expected to increase over the medium to long term, including tighter
environmental regulation, heightened stakeholder expectations regarding sustainability
and transparency. Supply chain risks may arise from climate impacts on the extraction and
processing of raw materials. Opportunities include enhanced brand differentiation through
responsible procurement and promotion of low-carbon products.
Long-term FY37 F Y37+ >10 year s
Acute physical risks, including increased frequency and severity of extreme weather events,
may disrupt global supply chains and distribution networks. Resource scarcity could affect
the availability and pricing of key materials. Strategic opportunities include adapting sourcing
strategies to prioritise lower-carbon products and highlighting the longevity of well-
maintained, certified products.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
112
Identified climate-related risks and opportunities
Reaching net-zero GHG emissions by 2050 and managing emerging risks associated with a changing climate presents both physical and transition risks, as well as
opportunities through adaptation to a low-carbon economy. All identified climate-related risks, opportunities and impacts are captured in our ESG risk register and
reviewed annually as part of our risk management process.
Risk Scope/Function
Time
horizon* Potential business impacts Group mitigations Priority areas Targets
R1
Compliance with
environmental
legislation
Transition risk:
Policy and legislation
Group
– Governance
S / M Emerging climate-related
disclosure laws, such as UK
SRS S1 and S2, and increasing
compliance requirements are
expected to raise the Group’s
reporting, audit, and adaptation
and mitigation implementation
costs. Failure to comply with
these evolving obligations could
lead to fines or penalties, as well
as missed investor opportunities
and reputational impacts.
Operational expenditure
required to ensure awareness
and compliance.
– Internal resource and governance
framework in place to monitor,
report and escalate requirements
and potential impacts
Supported by:
– Digital tools, e.g. Governance Risk
Platform (GRC) and Agentic AI
– External expertise and guidance
– Representation in industry bodies
– Investment in colleague training
Governance
Stakeholder engagement
Full legislative
compliance with no
non-conformance
R2
Energy efficiency
and energy
resilience
Transition risk:
Market
Group – Direct
Operations
S / M Sustained increases in long-term
energy costs and greater volatility
in energy supply.
– Implementation of energy
efficiency technology, smart
metering and energy
management systems
– On-site energy generation
– Securing long-term, fixed price
energy contracts to reduce
exposure to cost increases and
market volatility
– Installation of Uninterruptible
Power Supplies (UPS) at key sites
Energy security
Emissions reduction
Aim to reduce
Scope 1 emissions
by 42% by 2030
from a FY24
baseline
Continue to source
100% renewable
energy across our
Group to 2050
R3
Changing
temperature
Physical risk:
Chronic
Group – Direct
Operations
M / L Increased energy consumption
associated with heating and
cooling, as well as increased risk
of energy blackouts.
– Implementing energy efficiency
technologies, such as LED lighting,
smart metering and energy
management systems
– Adopting on-site energy
generation
– Securing long-term, fixed price
energy contracts to reduce
exposure to cost increases
and market volatility
– UPS installed at key sites
– Ongoing engagement with
landlords to adopt BREEAM
or LEED best practices
Energy security
Energy consumption
reduction
Year-on-year
energy reduction
per square foot
R4
Risk of reputational
damage from
non-compliance or
unsubstantiated
environmental
claims
Transition risk:
Reputation
Group
– Governance
M / L Customers are increasingly
expecting businesses to commit
publicly to sustainability measures.
Any commitments not met or
inaccuracy in claims may lead to
negative reputational impacts.
– Continue development and
implementation of Climate
Transition Plan
– Stakeholder engagement with
decarbonisation goals, green
claims and progress delivering
decarbonisation targets
– Continue to strengthen
procurement practices and
supplier selection and retention
processes
Emissions reduction
Accurate climate-related
disclosures and
commitments
Accurate
climate-related
reporting and
achieving net-zero
targets
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
113
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
Risk Scope/Function
Time
horizon* Potential business impacts Group mitigations Priority areas Targets
R5
Extreme weather
events
Physical risk:
Acute
UK and US –
Supply Chain /
Logistics
S / M / L Our analysis of key third-party
logistics sites under both high-
and low-carbon scenarios
identified potential delivery
disruptions.
For example, precipitation was
identified at two UK supplier sites
while in the US extreme heat was
reported at one third-party site
and cyclones and hurricanes were
reported at one third-party site.
– Ability to switch logistics partners
and delivery locations
– Budget timelines include costs
related to increased insurance
premiums that may occur
– Contractual and legal processes
such as long-term purchase
agreements and limiting minimum
quantity contracts. This ensures
sufficient inventory is kept in
warehouses controlled by
the Group
Supplier engagement Suppliers on
net-zero journey
R6
Extreme weather
events – cyclone,
hurricane, typhoon
Physical risk:
Acute
US – Direct
Operations
S/ M / L In the US (particularly Florida)
hurricanes occur annually, with
potential to disrupt logistics hubs,
product deliveries and client
fulfilment.
– Contingency plans and physical
controls in place within all sites
at risk
– Insurance policies to cover
financial losses, either partially
or fully and are based on
international spread and our
showroom presence
– Suppliers able to send products
directly to showrooms
Stakeholder engagement Annual assessment
of values associated
with the insurance
of all locations
R7
Extreme weather
events disrupting
offices and
distribution centres
Physical risk:
Acute
Group – Direct
Operations
S/ M / L Extreme rainfall could lead to
flash flooding and increased fluvial
flooding at US and UK sites.
– Showrooms not identified as a
‘stranded asset’ due to short
leases <10 years and ability to
relocate site if identified as high
risk
– Risk assessments conducted at
individual sites as leases expire,
with option to relocate where
necessary. Potential new sites also
assessed
– Budget allocated to maintain and
repair any sites impacted by
unexpected weather impacts
Stakeholder engagement Periodic review of
new and existing
sites
R8
Raw material
extraction
Physical risk:
Acute
Supply Chain M / L Raw material extraction
disrupted. For example, through
extreme heat.
– Build climate-related clauses into
relevant contracts, expand
product offering of lower-carbon
products, e.g. pre-owned watches
and jewellery
– Enhanced stakeholder
engagement supporting supply
chain transition to lower-carbon
products
– Strengthened procurement
processes and data capture
improving climate-related
decisions
Supplier engagement Diversification of
suppliers through
improved
procurement
practices
*S = Short-term, M = Medium-term, L = Long-term
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
114
To test the resilience of our business strategy and understand which climate-
related risks and opportunities could have a material financial impact on our
Group, we have conducted qualitative and quantitative CSA across our business
operations. This allows us to highlight specific climate-related risks and
opportunities, test the robustness of our assets and business strategy across
a range of potential temperature outcomes, and understand where and when
our value chain might be impacted.
Our climate scenarios reflect a broad range of possible climate outcomes and
use data from publicly available third-party sources to ensure active and holistic
management of all climate-related risk components. Our emissions reduction
pathways consider both the direct and supply chain impacts on biodiversity,
s well as the effects of a changing climate on our business initiatives.
Scenario
Transition
scenario Physical scenario
1.5ºC
– Rapid transition to a global
low-carbon economy
– Unified regulations and ambitious
climate policies are implemented
immediately and smoothly
NGFS net-zero
GHG emissions by
2050
Not considered*
Below 2ºC
– Steady transition to a global
low-carbon economy
– Required by the TCFD
recommendations
– Aligns with the Group’s net-zero
GHG emissions target
NGFS below 2
degrees
IPCC SSP1-2.6
2-3ºC disorderly transition
– Delayed and disorderly transition
leading to notable transition and
physical impacts
NGFS delayed
transition
IPCC SSP2-4.5
4ºC
– Business-as-usual emissions
– Assumes climate inaction
– No additional policies are implemented
to address the climate agenda and
temperatures rise to 4°C above
pre-industrial levels
NGFS current
policies
IPCC SSP5-8.5
* Below 2°C scenario has been used which is also a low-carbon scenario.
During FY26, we identified emerging climate-related transition risks, including
the potential for sustained increases in long-term energy costs, greater volatility
in energy supply and the risk of reputational damage arising from non-compliance
or unsubstantiated environmental claims.
Our physical climate-related risks were also assessed to make sure they remain
relevant and are managed appropriately. In partnership with environmental
consultants, we deployed SE Advisory’s specialised Climate Risk Platform to
map each of our sites against the 28 physical climate hazards listed by the EU
taxonomy. Each site was screened for exposure to impacts such as flooding,
heatwaves and wildfires.
The results showed that material physical climate risks (hurricanes, flooding,
extreme heat and changing temperature) first identified in FY22, remain
applicable and material to the Group. However, a new risk of water stress
within a number of US sites was flagged as a potential material issue over the
long term (>10 years). Given we have not assessed water stress before, further
investigations will be conducted to establish the full impact on our operations.
All risks identified in FY26 will be subject to further analysis, and any updates
to materiality and financial impacts will be incorporated into future reporting.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
115
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
HIGH CLIMATE-RELATED RISKS RELATED TO OUR DIRECT OPERATIONS
Changes in climate-related risks and opportunities
During the period, we refreshed our assessment of climate-related risks and opportunities in line with evolving guidance, improved data availability and our objective
to provide a more concise, decision-useful report.
As a result, the following risks disclosed in our Annual Report and Accounts 2025 have been updated or are no longer disclosed as principal climate-related risks to
the Group. All identified risks and opportunities continue to be monitored within the Group’s risk management frameworks and will be redisclosed if re-identified
as material in future periods.
Risk Change Reason for change
R1 Cost of non-compliance with environmental
legislation
Compliance with environmental legislation Combined two separate risks to streamline reporting.
R4 Expectations for preparedness and
responsible conduct from stakeholders,
including investors, lenders and clients
Risk of reputational damage from
non-compliance or unsubstantiated
environmental claims
Preparedness is now considered business-as-usual and too
broad to provide meaningful insight. This risk has been
updated to focus specifically on reputational damage from
unsubstantiated claims.
R5 A changing climate and extreme weather
events such as heatwaves have the potential
to affect logistics hubs
Removed Not considered a principal climate risk.
Adaptation measures in place.
Not
material
The Group is liable to pay carbon tax on
energy consumption and direct emissions
(fleet) and indirect emissions (supply chain)
Removed Carbon tax assessment conducted in 2021, with a
subsequent tax workshop in 2024 concluding minimal
impact. Risk of increased energy costs and supply volatility
are now more relevant and material than the carbon tax.
Not
material
Changing consumer preferences Removed It is now captured under risk of reputational damage from
non-compliance or unsubstantiated environmental claims.
Opportunity Change Reason for change
O1 Promoting the prolonged lifetime of watches
and jewellery to encourage clients to retain
and repair watches and jewellery instead of
disposing of them
Lower-carbon products Broadening product range to include lower-carbon
products such as lab-grown diamonds.
O2 Proactive collaboration with suppliers to
reduce energy
Proactive collaboration with suppliers to
reduce emissions
Mitigation measures in place to reduce the cost of energy
contracts. Deep supply chain emissions reductions
necessary to achieve net-zero SBTs.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
116
ACTUAL AND POTENTIAL IMPACT OF HIGH CLIMATE-RELATED RISKS
The following table includes our analysis of current high-rated climate-related risks and opportunities. We recognise more significant impacts will be experienced for
climate-related physical risks under high-carbon scenarios, whereas transition risks impacts will be more significant under low-carbon scenarios.
Risk category Scenario
Time horizon
R1. Group – Governance Short Medium Long
LEGISLATIVE
Compliance with environmental
legislation
Transition
<2°C
Magnitude of impact
post-mitigation:
Negligible
Likelihood of impact
post-mitigation:
Likely
Financial impact
post-mitigation:
<1% EBIT
Risk category Scenario
Time horizon
R2. Group – Direct Operations Short Medium Long
ENERGY COSTS AND SUPPLY
Energy efficiency and energy
resilience
Transition
<2°C
Magnitude of impact
post-mitigation:
Negligible
Likelihood of impact
post-mitigation:
Moderate
Financial impact
post-mitigation:
<1% EBIT
Risk category Scenario
Time horizon
R3. Group – Direct Operations Short Medium Long
CHRONIC PHYSICAL
Changing temperature
Physical
<2°C
4°C
Magnitude of impact
post-mitigation:
Negligible
Likelihood of impact
post-mitigation:
Moderate
Financial impact
post-mitigation:
<1% EBIT
Risk category Scenario
Time horizon
R4. Group – Governance Short Medium Long
REPUTATION
Risk of reputational damage from
non-compliance or unsubstantiated
environmental claims
Transition
<2°C
Magnitude of impact
post-mitigation:
Moderate
Likelihood of impact
post-mitigation:
Negligible
Financial impact
post-mitigation:
1-5% EBIT
Risk category Scenario
Time horizon
R6. Group – Direct Operations Short Medium Long
ACUTE PHYSICAL
Extreme weather events – cyclone,
hurricane, typhoon
Physical
<2°C
4°C
Magnitude of impact
post-mitigation:
Minor
Likelihood of impact
post-mitigation:
Likely
Financial impact
post-mitigation:
1-5% of EBIT
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
117
Risk category Scenario
Time horizon
R7. Group – Direct Operations Short Medium Long
ACUTE PHYSICAL
Extreme weather events disrupting
offices and distribution centres
Physical
<2°C
4°C
Magnitude of impact
post-mitigation:
Minor
Likelihood of impact
post-mitigation:
Likely
Financial impact
post-mitigation:
1-5% of EBIT
Risk category Scenario
Time horizon
R8. Supply Chain Short Medium Long
ACUTE PHYSICAL
Raw material extraction
Physical
<2°C
4°C
Magnitude of impact
post-mitigation:
Minor
Likelihood of impact
post-mitigation:
Likely
Financial impact
post-mitigation:
1-5% of EBIT
ACTUAL AND POTENTIAL IMPACT OF HIGH CLIMATE-RELATED OPPORTUNITIES
Opportunity
category
Possible
impact
Time horizon
O1. Group – Governance Short Medium Long
DOWNSTREAM
Lower-carbon products
Products /
Services
5-10% EBIT
DETAIL
Enhanced brand differentiation
through the sale and promotion of
low-carbon products and responsible
procurement.
Strategy to realise opportunity
– Drive increased sales of pre-owned watches and jewellery through investment
in marketing, enhanced digital channels and in-showroom displays
– Broaden low-carbon product offering, such as lab-grown diamonds
– Improve product traceability and awareness through procurement decisions,
supply chain engagement and industry collaboration
Opportunity
category
Possible
impact
Time horizon
O2. Group – value Chain Short Medium Long
SUPPLY CHAIN
Proactive collaboration with suppliers
to reduce emissions
Products/
Services
<1% EBIT
DETAIL
The Group has an SBT to reduce
Scope 3 emissions by 42% by 2030
from a FY24 baseline. Achievement of
this target will support brand
differentiation and reduce any future
impact of carbon pricing.
Strategy to realise opportunity
– Continuous improvement in supplier data as we improve our reporting and
action internal decarbonisation plans
– Improving upstream and transportation data to transition away from spend
to actual activity data
– Continued engagement with logistics suppliers to include route optimisation,
implementation of sustainable alternative aviation fuel and the future
electrification of transportation fleets
– Improving colleague commuting response data and incentivising more
sustainable commuting methods
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
118
Opportunity
category
Possible
impact
Time horizon
O3. Group – energy efficiency Short Medium Long
DIRECT OPERATIONS
Energy efficiency in showrooms,
offices and distribution centres and
use of renewable energy in
showrooms and offices
Energy source
and resource
efficiency
<1% EBIT
DETAIL
Use of lower-emission sources of
energy. Reduction in energy
consumption.
Strategy to realise opportunity
– Invest in initiatives to reduce our operational impact throughout our US and
UK estate
– 100% of properties powered by renewable electricity backed by guarantees of
origin
– 94% of properties across our Group use LED lighting and this is standard in all
new properties
– EnOS™ system delivered a 19% average reduction in energy consumption
across 45 contracted sites, with 79.8 tCO
2
e reduced and approximately
£115,000 in cost savings delivered across contracted sites
– Solar array on our Carlton Park Support Centre complete and set to generate
renewable energy on-site and reduce energy costs by over £16,500 per annum
Business resilience in summary
As jurisdictions progress toward lower-carbon economies, the Group anticipates
a continued rise in the breadth and complexity of climate-related disclosure rules
and environmental legislation, such as the upcoming UK SRS S1 and S2 disclosures.
These emerging obligations, which increasingly include enhanced reporting
expectations, verification requirements and jurisdiction-specific mandates,
may drive higher internal costs associated with data gathering, assurance, and
compliance activities. Meeting these evolving requirements may require additional
resource investment, new processes, and/or system upgrades. Conversely, any
failure to comply could expose the Group to regulatory sanctions, limit access
to certain investors, or create reputational challenges.
The Group’s Sustainability function, led by an experienced Head of Sustainability
and ESG, is supported by established governance forums, specialist external
advisers, and digital tools to monitor regulatory changes and assess their
implications for the business. Regulatory obligations are actively tracked,
integrated into planning cycles, and supported by structured decision-making
frameworks to ensure the Group responds promptly and appropriately to
new requirements.
AI-enabled platforms assist in identifying relevant legislative changes, assessing
potential compliance gaps, and escalating issues through governance processes for
timely management action. Recent enhancements to our procurement function
and the introduction of an AI-supported supply chain management system, help
ensure our partners are aligned with our Supplier Sustainability Standards, and
broader compliance commitments detailed within our Supplier Operating Manual.
Our operation is not highly energy intensive, reducing our vulnerability to
immediate impacts related to the climate transition impacts and our low direct
emissions profile by (approximately 2%) and asset-light retail model support our
ability to transition to ethically sourced, low-impact products.
Across our portfolio, showrooms are typically located in major global cities with
robust infrastructure, and our logistics operations are resilient due to the ability
to quickly adapt to change. Our assessments also found key suppliers have
well-established climate risk mitigation and adaptation actions in place, which is
supported by findings from our supplier screening capability provided by Agentic
AI technology.
In FY27, we aim to better understand the risk exposure of our key brand partners
to extreme heat in sourcing locations and pass through cost increases resulting
from higher energy costs and carbon pricing, with the aim of fully understanding
our vulnerability and overall risk to these climate hazards.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
119
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
METRICS AND TARGETS
TCFD (9) Metrics to assess climate-related risks and opportunities in line
with strategy and risk management process
CFD (7) KPIs used to assess progress of targets used to manage climate-
related risks and realise climate-related opportunities and a description
of the calculations on which those key performance indicators are based
TCFD (10) Scope 1, Scope 2, and Scope 3 GHG emissions and related risks
TCFD (11) Targets to manage climate-related risks and opportunities
and performance against targets
CFD (8) Targets used to manage climate-related risks and realise
climate-related opportunities and of performance against those targets
We use a range of quantitative and qualitative metrics to assess and manage
climate-related risks and opportunities across our operations and value chain, which
are integrated into our risk management and strategic decision-making processes.
This includes the measurement and reporting of our Scope 1 (direct), Scope 2
(indirect) and Scope 3 (value chain) GHG emissions in accordance with the
GHG Protocol and measuring and monitoring energy use across our portfolio.
In January 2026, the SBTi validated the following net-zero goals aligned
to a 1.5°C trajectory.
OVERALL NET-ZERO TARGET:
The Group is committed to achieving net-zero greenhouse gas emissions
across the value chain by 2050.
NEAR-TERM TARGETS
– Reduce absolute Scope 1 GHG emissions 42% by 2030 from a FY24*
base year
– Source 100% renewable electricity through to 2030
– Reduce absolute Scope 3 GHG emissions 42% by 2030 from a FY24*
base year
LONG-TERM TARGETS
– Reduce absolute Scope 1 GHG emissions 90%** by 2050 from a FY24*
base year
– Source 100% renewable electricity through to 2050
– Reduce absolute Scope 3 GHG emissions 90%** by 2050 from a FY24*
base year
* Engagement with the SBTi during the net-zero verification process resulted in a change of
baseline year from FY20 to FY24. This change aligns with updated SBTi guidance and allows
the Group to measure performance relative to the scale of our current operations and gauge
future performance against a higher quality dataset.
** We will aim to offset the residual 10% of emissions through permanent removal and storage
of carbon.
As part of our strategy to achieve net-zero GHG emissions by 2050, we have
implemented several emission reduction initiatives across our operations and
value chain, including sourcing 100% renewable energy backed by guarantees
of origin across our Group, implementing an energy management system in sites
with the highest energy consumption across the US and UK, transitioning to a
hybrid or electric vehicle fleet, introducing fully recyclable packaging and engaging
suppliers with our goals through improved procurement practices and supply
chain engagement.
Our existing loan facility is aligned with our near-term science-based emission
reduction trajectory and circularity goals, which are supported by the ESG bonus
underpin and colleague incentives. Please see page 184 for additional details on
how sustainability targets influence remuneration.
During FY26, we met our goal to maintain or improve our B rating, achieving an
A- for disclosure and an A for supply chain engagement. We continue to review
our performance and build further areas of improvement into our Climate
Strategy as we strive to achieve net-zero emissions in line with a credible
Climate Transition Plan aligned with the recommendations of the Transition
Planning Taskforce.
Metrics to assess climate-related risks and opportunities
Goals used to manage climate-related risks and opportunities can be found within
the right-hand column of our identified climate-related risks and opportunities
table on pages 113 to 119. The following table summarises key metrics and
performance indicators used to monitor the management of high climate-related
risks and opportunities.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
120
Risk Scope Metrics to monitor risks Targets to monitor risks FY24 FY25 FY26
YoY
trend
R1
Compliance with environmental
legislation
Group Review alignment with climate-related
disclosures and compliance
requirements globally, where applicable
Full legislative compliance with no
non-conformances
Compliant Compliant Compliant
R2
Energy efficiency and energy
resilience
Group Reduce energy consumption (per sq ft)
year-on-year
Transition to 100% renewable energy
wherever possible (including landlord
energy supplies) by 2025
70% 100% 100%
R3
Changing temperature
Group Monitor and regulate HVAC systems
at an asset level
% energy reduction across 45 contracted
sites with EnOS™ from FY25 base year
– Baseline -19%
R4
Risk of reputational damage from
non-compliance or unsubstantiated
environmental claims
Group Deliver training on green claims for all
sourcing, marketing and client-facing
colleagues
All relevant colleagues receive training on
green claims
– – Baseline
R5*
R6
Cyclone, hurricane, typhoon
Group Monitoring the cost of extreme
weather damage across sites on an
annual basis
Annual assessment of value associated
with the insurance of all locations
Complete Complete Complete
R7
Extreme weather events disrupting
offices and distribution centres
Group Strategic sites reviewed annually and
appropriate contingency plans in place
until lease expiry
All properties reviewed annually for
exposure to extreme weather events
50% 100% 100%**
R8
Raw material extraction
Supply
Chain
Engagement with brand partners and
other suppliers to range more
lower-carbon products
Increase sales of lab-grown diamonds
year-on-year from a FY26 baseline
– – Baseline
O1
Lower carbon products
Products Increased sales of lower-carbon
products
Increase sales of pre-owned watches
year-on-year
Baseline +39% +21%
O2
Proactive collaboration with
suppliers to reduce emissions
Supply
Chain
42% reduction in Scope 3 emissions by
2030 from a FY24*** baseline
Annual reduction in Scope 3 intensity
ratio****
Baseline -1% +4%
O3
Energy efficiency in showrooms,
offices and distribution centres
Group Reduce Scope 1 & 2 intensity
ratio****
Scope 1 and 2 intensity ratio**** Baseline +3% -12%
Key
Improved/
Compliant
No change Missed target
* Risk R5 has not been included in the above table as it is no longer considered a principal climate risk as reported on page 116
** Excludes four newly acquired Deutsch & Deutsch showrooms
*** Baseline updated to 2024 in line with net-zero targets
**** tCO
2
e per £’000 revenue
Changes
FY25 metric FY26 change Reason for change
Increased energy requirements:
a) % of electricity from renewable sources
b) Number of properties we control fitted
with LED lighting removed
a) Energy reduction across sites equipped
with EnOS™ technology
Transitioned to 100% renewable energy across our Group in FY25.
New metric measures ROI of energy management systems (EnOS™).
b) Removed LED lighting now standard in properties we control and where
installation is financially and practically viable.
Changing consumer preferences:
a) Number of product repairs, servicing and sales
of pre-owned watches as a % of new watch sales
b) 50% of product suppliers to align with
relevant, well-recognised sustainability standards
or certifications by 2025
a) Increase sales of pre-owned watches
year-on-year from a FY24 baseline
Updated to reflect change in strategy to sell more affordable luxury
watches and align with new ESG bonus underpin target, approved by
the Remuneration Committee in FY26.
b) Removed 67% of suppliers align with well-recognised sustainability standards or
certifications. A new metric to support our goal to offer clients more
lower-carbon products has been introduced.
Raw material extraction disrupted Year-on-year increase in avoided emissions
through increased sales of lower-carbon
products
Updated metric to support changing consumer preferences and
reporting requirements, as well as sales of lower-carbon products
such as verified lab-grown diamonds.
Carbon price introduced Risk of reputational damage from
non-compliance or unsubstantiated
environmental claims
Risk of increased energy costs and supply volatility are now more
relevant and material to the Group than carbon tax.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
121
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
EMISSIONS TABLE
Global GHG emissions data
FY – 2026 FY – 2025 FY – 2024 baseline
UK Europe US Tota l UK Europe US Tot al UK Europe US Tot al
Scope 1: Direct combustion from owned
and controlled sources (tCO
2
e)
321 3 136 460 194 0 59 252 162 – 85 247
Scope 2: Indirect emissions from the
generation of purchased electricity, heat,
steam or cooling (Location-based) (tCO
2
e)
1,875 5 1,924 3,803 2,292 19 1,797 4,108 2,194 29 1,844 4,067
Scope 2: Indirect emissions from the generation of
purchased electricity, heat, steam or cooling
(Market-based) (tCO
2
e)
– – – – – – – – – 33 1,574 1,607
Total Gross Scope 1 and 2 (tCO
2
e)
Location-based
2,195 8 2,060 4,263 2,486 19 1,855 4,360 2,356 29 1,929 4,314
Total Gross Scope 1 and 2 (tCO
2
e) Market-based
321 3 136 460 193 0 59 252 162 34 1,659 1,855
Total KWh (Electricity, gas and fleet)
10,957,851 50,048 5,599,486 16,607,385 11,4 89,198 174,752 5,272,306 16,936,256 11,14 4, 098 264,590 5,285,657 16,694,345
Scope 3 emissions
Category 1 – Purchased Goods and Services
(1)
116 , 537 33 115, 32 7 231,897 103,286 541 97,276 201,103 100,035 988 103,471 204,494
Category 2 – Capital Goods
(2)
9,646 – 14,289 23,935 9,434 – 12,059 21,493 16,734 555 6,147 23,436
Category 3 – Fuel- and energy-related activities
(3)
636 2 480 1,118 684 8 433 1,125 744 16 435 1,195
Category 4 – Upstream Transportation and
Distribution
(4)
321 0 2,473 2,794 423 5 967 1,395 781 10 1,604 2,395
Category 5 – Waste Generated in Operations
(5)
1.31 0.0 0.34 2 5 0 1 6 8 0 2 10
Category 6 – Business Travel
* (6)
1,750 1,654 – – – 2,362
Category 7 – Employee Commuting
(7)
2,565 2 1,052 3,619 3,104 41 933 4,078 1,845 918 121 2,884
Category 11 – Use of Sold of Products
* (8)
26 10 – – – 6
Category 12 – End-of-life treatment of Sold
Products
(9)
23 0 7 30 30 – 7 37 109 32 1 142
Total Gross Scope 3 (tCO
2
e) 265,171 230,901 236,924
Total Gross Emissions (tCO
2
e) Location-based 269,434 236,691 241,238
Total Gross Emissions (tCO
2
e) Market-based
265,631
232,582 238,779
Emission intensities
FY – 2026 FY – 2025 FY – 2024
UK and
Europe US Total
UK and
Europe US Tot a l
UK and
Europe US Total
Revenue (£’000) 900,700 927,200 1,827,90 0 865,874 785,627 1,651,501 846,043 838,360 1,684,403
Scope 1 & 2 Intensity Ratio
(tCO
2
e per £'000 revenue)
0.0024 0.0022 0.0023 0.0029 0.0024 0.0026 0.0028 0.0023 0.0026
Scope 3 Intensity Ratio
(tCO
2
e per £'000 revenue)
*
0.1451 0.1398 0.1407
Scope 3 Intensity Ratio (tCO
2
e per Sqf)
*
0.4233 0.2895 0.3215
Total Emissions Intensity Ratio
(tCO
2
e per £'000 revenue)
0.1474 0.1433 0.1432
Total Emissions Intensity Ratio (tCO
2
e per Sqf) 0.4301 0.2968 0.3274
* Calculated as Group Figure.
Certain FY25 and FY24 Scope 3 comparative figures have been re-stated where required by the methodology detailed on the next page
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
122
Methodology
The Group’s approach to calculating and reporting its Greenhouse Gas (GHG)
emissions follows the WRI.WBCSD GHG Protocol Corporate Accounting and
Reporting Standards (Revised) on how to measure and monitor GHG emissions.
Scope 1 and 2 emissions have been reported above where the Group has
operational control of a property or an asset. This includes properties which
the Group operates but which are not included as leases within the financial
statements on account of the substitution rights the landlords have (as noted
within note 1 of the Consolidated Financial Statements).
The Group uses six external data sources for emissions factors, being:
1. UK Government GHG conversion factors for company reporting (2025
Department for Business, Energy & Industrial Strategy (BEIS) condensed set,
full set and methodology). These are used to convert our car fleet mileage
to kWh and tCO
2
e, and our electricity, gas and refrigerant usage to tCO
2
e.
2. US Environmental Protection Agency (EPA) (eGRID) emissions factors for
greenhouse gas inventories for US electricity generation (eGRID 2025).
3. Manufacturers’ emissions factors for cars, uplifted for the UK real-world factor
(2025 BEIS Government GHG conversion factors for company reporting).
4. European Environment Agency GHG emission intensity for conversion
of electricity kWh to tCO
2
e for Denmark and Germany.
5. CEDA (“Comprehensive Environmental Data Archive”) EEIO
(Environmentally-Extended Input Output) country specific spend-based
emission factors. Where the country the service took place was known,
purchaser price country specific emissions factors were used, and if not, U.S.
based producer price emissions factors were used.
All Scope 3 emission calculations follow the guidelines and methodologies that
are outlined in the Greenhouse Gas Protocol. The Greenhouse Gas Protocol
is the most widely used greenhouse gas accounting standard. It provides a
framework for businesses and governments to measure and report their
greenhouse gas emissions.
See below more information regarding the methodology and data sources that
were used for the Scope 3 calculations.
For Category 1, pre-owned emissions are excluded
1. A combination of supplier-specific data using CDP and Annual Report data,
alongside spend-based emission factors from the Environmentally Extended
Input Output CEDA 2025 version database have been employed for the
emission calculations.
2. Spend-based emission factors from the Environmentally Extended
Input Output CEDA 2025 database have been employed for the
emission calculations.
3. Well-To-Tank and Transmission (WTT) and Distribution (T&D) emissions
have been calculated using the BEIS and IEA emission factors for the Group’s
electricity, natural gas and fuel used in company owned vehicles.
4. A combination of BEIS 2025 freight and Well-To-Tank (WTT) freight
emission factors, alongside CEDA 2025 spend-based emission factors
have been utilised to complete the calculations for Category 4 – Upstream
Transportation & Distribution.
5. Emissions related to the Group’s offices and showrooms’ waste disposal
activity. Emissions calculations have taken into consideration the share of
waste landfilled (1%) and the share of waste diverted from landfill (99%).
BEIS emission factors have been used. Moreover, no waste data was
provided for Roberto Coin; however, it is included in the purchase ledger.
6. Business travel emissions considers the emissions from Hotel Stays, Flights,
Taxi rides as well as Tube/Rail journeys. A combination of both CEDA,
2026 for spend-based and BEIS emission factors, for the distance based
calculations, was used.
7. Home working emissions have been calculated using a mix of assumption-
based calculations for homeworking using EcoAct’s proprietary Homeworking
emissions Whitepaper (https://info.eco-act.com/en/homeworking-emissions-
whitepaper-2020). Employee commuting was calculated using the commuter
survey provided by WOSG, to create estimates per FTEs in each region and
utilising BEIS emissions factors.
8. Emissions related to the energy consumed from the Group’s Quartz, Smart,
and Other watches that require electricity for the charging of their battery.
Total quantity per watch type has been multiplied by emission factors
calculated based on publicly available data and Life Cycle Assessments
9. Emissions relating to the disposal of product packaging. BEIS emission
factors are used for UK operations, while EPA factors have been used for
US operations; these have been applied to packaging quantities. To note
that emissions relating to the disposal of watches and jewellery have been
excluded from the calculation, as these products are high in value and are
either repurposed or resold.
The Scope 1, 2 and 3 emissions and energy consumption data for FY26 and the
restated FY24 emissions have been independently assured through a limited
assurance engagement conducted in accordance with International Standard on
Assurance Engagements (ISAE) 3410 ‘Assurance Engagements on Greenhouse
Gas ‘ by BDO LLP.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
123
The baseline for our metrics is FY24. In line with the Greenhouse Gas Protocol,
to ensure fair comparison over time, the Group will rebaseline previously reported
figures in subsequent annual reporting, when a material change occurs due to:
– Structural changes that affect the inventory boundary (such as mergers,
acquisitions or divestments)
– Changes in calculation methodologies
– Granulation (such as improvements in data quality)
– Scope of emissions boundary changing
– Identification of historical errors
EMISSIONS REBASELINING POLICY
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
The Group defines a material difference, which would trigger a rebaselining
exercise, as one resulting in a variance of greater than or equal to 5% as per best
practice guidance from the SBTi.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
124
FY21
– ESG Committee established
– First qualitative and quantitative CSA
of our operation
– First voluntary TCFD disclosure
FY27 GOALS
– Ongoing monitoring of climate-related risks and opportunities across our Group
– Expand CSA to incorporate recent Deutsch & Deutsch showrooms acquisition
– Investigate the vulnerability of sites to water stress over the longer-term
– Increase the use of primary data to calculate Scope 3 emissions, using activity data where key supplier emissions data is unavailable
– Continue development and implementation of the Group’s Climate Transition Plan to reduce emissions across all Scopes and further prepare the Group
for the impacts of climate change
– Maintain or improve on CDP A- score for climate change
– Better understand risk exposure of key brand partners with the aim of fully understanding our vulnerability and overall risk to extreme heat, carbon pricing
and increased energy costs
FY23
– SBTi approves near-term SBTs aligned with
the Paris Climate Agreement
– Quantitative CSA across our value chain
– Climate-related mitigations and investment
embedded into financial planning process
– First CDP climate change disclosure
(C score)
FY24
– Sustainability Linked Loan linked to SBTs
– Explored carbon pricing mechanisms
– Introduced AI to support supply chain
adaptation
– CDP climate change disclosure (B score)
FY26
– Net-zero SBT approved and verified
by SBTi
– Scope 1 and Scope 2 emissions targets
disaggregated
– CSA to assess physical risks conducted
across all sites
– EnOS™ technology installed in Group sites
with highest energy consumption
– First solar installation at our Carlton Park
Support Centre
– Continued development of Climate
Transition Plan
– CDP climate change disclosure (A- score
for climate change and A for stakeholder
engagement)
FY22
– Climate change classified a principal risk
– Head of Sustainability appointed
– Scope 3 emissions measured for the first
time and all Scopes externally verified
– Public commitment to set near-term SBTs
FY25
– Sourced 100% renewable energy across
our Group
– Key logistics routes assessed for risks and
opportunities in low and high climate
scenarios
– Stakeholder engagement with development
of Climate Transition Plan
– Successfully trialled EnOS™ technology
across 10 UK sites
– Head of Procurement appointed
– Modelled a net-zero target aligned to
market-based factors
– CDP climate change disclosure (B score for
climate change and A for supply chain
engagement)
GOAL AND STRATEGIES
The timeline below summarises progress and key steps taken by the Group to ensure climate-related risks and opportunities are identified and managed
in a structured, transparent and measurable way:
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
125
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
126
Supply chain transparency is a key priority for the Group as it provides us with
the foundation for delivering our sustainability strategy, including our transition
to net-zero and supporting a more circular economy.
Understanding multi-tier supply chains also enables us to identify, assess and
mitigate risks, while supporting compliance with evolving regulatory requirements
and industry standards. In addition, it strengthens product traceability, supplier
accountability and responsible sourcing practices, which are increasingly important
to our stakeholders.
The Group also recognises compliance risks related to service providers we
contract with and takes steps to identify and mitigate them. These suppliers
support our organisation within areas including the cleaning of our showrooms and
support centres, as well as construction, waste management, events and hospitality.
GOALS AND STRATEGIES
Our supply chain is integral to our business, with our long-term success dependent on our ongoing ability to
build trusted supplier relations, source the highest-quality luxury watches and jewellery and delight clients with
reputable products that are verifiably safe, ethical and environmentally sustainable.
OUR PRODUCTS
FY26 KEY PERFORMANCE HIGHLIGHTS
– Continued to strengthen our procurement practices to support sustainability
goals and mitigate against related risks, including a revision of our Supplier
Operating Manual
– Increased sales of lower-carbon products, including lab-grown diamonds and
pre-owned watches
– Mappin & Webb awarded Royal Warrant to Her Majesty Queen Camilla
8%
INCREASE IN NUMBER
OF PRE-OWNED LUXURY
WATCHES SOLD
67%
(
+22%
)
PRODUCT SUPPLIERS OVER
£500K SPEND IN FY26 REPORT
HOLDING AT LEAST ONE
SUSTAINABILITY STANDARD
OR CERTIFICATION
34%
(
+18%
)
PRODUCT SUPPLIERS OVER
£500K SPEND REPORT
CARRYING OUT ETHICAL
OR SOCIAL AUDITS OF THEIR
SUPPLIERS
52%
(
+12%
)
PRODUCT SUPPLIERS OVER
£100K REPORT HAVING A
HUMAN RIGHTS POLICY
GOALS
– Improve our traceability and sourcing standards
– Promote the sustainable attributes of our watches and jewellery
– Increase sales of lower-carbon products year-on-year from a FY24 baseline
STRATEGIES
WE ADVOCATE FOR
OUR INDUSTRY
By proactively
promoting the interests
and responsibilities of
the luxury watch
and jewellery sectors
in our markets
WE EARN TRUST
& CONFIDENCE
By being true to
ourselves and honest
and transparent
with our colleagues,
our clients and our
brand partners
WE TREAT EVERYONE
WITH RESPECT
By working together to
cultivate a secure and
supportive workplace,
with equal
opportunities and
respect
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
127
With society placing a greater value on lower-carbon products, we are helping
to extend the already long lifespan of luxury watches and jewellery by increasing
sales of pre-owned luxury watches and investing in our repairs service.
Pre-owned products remove the need for raw materials, as well as energy and
waste from mining and manufacturing processes and support our strategy to keep
more products in circulation. They also support our decarbonisation strategy,
with pre-owned watch sales (excluding necessary repairs, servicing and any spare
parts) being reclassified as zero emissions by the SBTi during our recent net-zero
verification process, removing related emissions from our Group footprint.
We are realising identified opportunities by continuing to drive sales of pre-
owned watches through dedicated business operations in the US and UK,
resulting in an increase in the number of units sold by 8% year-on-year.
Through these businesses, clients are offered a curated collection of pre-owned
and vintage watches from luxury brands, including Rolex, with the Group being
proud to be a part of a limited network of retailers authorised to sell Rolex
Certified Pre-Owned watches.
LOWER-CARBON PRODUCTS AND CIRCULARITY
We continue to make it easier for clients to make more sustainable choices by
improving colleague knowledge, extending our range of lower-carbon products to
include lab-grown diamond jewellery and supporting a more circular economy through
sales of pre-owned luxury watches.
Our US-based pre-owned watch business, Analog:Shift, specialises in catering
to clients wanting rare, pre-owned and vintage pieces that reflect their individual
style and values. At the same time, engaging digital editorial content available
through Hodinkee presents opportunities to engage global horology enthusiasts
with the enduring value of pre-owned watches.
Pre-owned watches are on display and available to purchase within an increasing
number of showrooms, with an extended collection available to view and buy
online through our ecommerce channels.
Throughout FY26, we elevated our pre-owned watch offering, to attract more
clients and encourage existing clients to expand their collection by utilising prime
window space and dedicating showroom floor areas to showcase the diversity
and long-term value of these products. This activity was supported by a variety
of pre-owned events, with some featuring a watchmaker at work, promoting
the art of watchmaking and importance of regular servicing.
We will continue to support pre-owned growth in FY27, anticipating a further
increase in sales, driven by targeted social media campaigns and visual showroom
enhancements, including shop-in-shop experiences.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
128
REPAIRS AND AFTER-SALES
Every pre-owned watch we sell requires an element of repair and/or servicing
to ensure it is in the best possible condition and works perfectly, and in FY26
approximately a third of our repairs operation was dedicated to supporting the
growth of pre-owned sales.
Our global repairs and servicing operation comprises four main repairs and servicing
centres – Manchester and Leicester in the UK, and Florida and Connecticut in the
US – with on-site technicians a popular feature in key showrooms.
We also operate two Rolex Authorised Service Centres in Birmingham and
Newcastle in the UK and look forward to adding a new workshop within our new
Glasgow Rolex boutique in September 2026, when visiting clients will be able to
see our expert watchmaking team at work from the service lounge.
Client after-sales saw a slight 1% increase in value, however, repairs units dropped
by 5% year-on-year, as we continue to contend with the challenges of an uncertain
economy and higher living costs.
To remind clients of the importance of professionally servicing luxury watches to
ensure they remain at their optimum performance and highest value for as long
as possible, we continue to promote repairs in showrooms and online.
PRE-OWNED AND REFURBISHED JEWELLERY
Our support of a more circular economy is further enhanced in the US by
vendors such as Windsor, our Estate Jewellery offering and our Betteridge
business, which specialises in the restoration of vintage designer jewellery.
Deutsch & Deutsch also has jewellers specialising in jewellery repair.
In FY26, we successfully introduced UK clients to a limited range of branded
pre-owned jewellery from brands including Cartier. For FY27, it is anticipated we
will offer clients a wider range from more designer brands as part of a six-month
trial within selected UK showrooms, including our prestigious Luxury Jewellery
boutique in Manchester, which is part of our Mappin & Webb business and online.
We are proud to employ the Crown Jeweller within our Mappin & Webb
business, where we also hold a Royal Warrant to His Majesty King Charles III,
who is widely recognised for his long-standing advocacy of sustainability and
environmental stewardship. In April 2026, we were delighted and honoured
to receive a Royal Warrant to Her Majesty Queen Camilla after completing
a comprehensive sustainability assessment as part of our application.
Mappin & Webb’s skilled craftsmen and women can restore jewellery and
silverware items of any age, make or design to their original glory, and we offer
clients a range of repair, cleaning, restoration and renovation services, alongside
the latest branded and fine jewellery collections. Items can be skilfully modernised
and customised to complement individual tastes and lifestyles, while reducing the
reliance on raw materials.
In July 2025, we extended the lower-carbon products we offer to include
lab-grown diamonds. Clients were offered a range of lab-grown diamond
jewellery items in 70 selected showrooms and online through our Goldsmiths
brand, with an option to Click & Collect from any location. Sales are supported
by online marketing campaigns, and we work closely with suppliers to ensure any
sustainability claims are verifiable.
While some reports claim lab-grown diamonds can carry up to 90% fewer
emissions than mined diamonds (using methodology based on cradle-to-gate life
cycle assessments), we understand actual emissions reductions depend on the
energy source used to grow them – as well as any materials used for jewellery
settings and packaging.
For FY27, we will offer lab-grown diamonds to our US clients and continue
to engage suppliers and further improve client-facing colleagues’ understanding
of lab-grown diamonds including certification standards, growth methods,
treatments, testing instruments, required markings and type of energy used
in the manufacturing process.
CIRCULAR DESIGN
We range watches designed and manufactured by ID Genève, whose mission it is
to cultivate a new generation of climate solutions that meet the highest standards
of excellence and contribute positively to our planet.
We stock three models from their ‘Circular’ design series, which have a lower-
carbon footprint than the industry average. For example, the carbon footprint
of their surgical grade steel is 165 times lower than standard steel used in the
production of luxury watches.
LAB-GROWN DIAMONDS
70
GOLDSMITHS SHOWROOMS
OFFERING LAB-GROWN
DIAMONDS IN FY26
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
129
Activity Impacts Commitment and action
Procurement
As well as helping to achieve greater value for
money, responsible sourcing strengthens supply
chain due diligence and can encourage
competition and sustainability innovation. It also
protects us against reputational damage,
operational issues, regulatory fines and supply
chain disruptions.
We are committed to working with suppliers who share our values, behave ethically,
apply high standards of company conduct and fully comply with all relevant law.
Our tendering and onboarding process includes comprehensive data capture,
allowing us to screen and verify a supplier’s legal and financial status and prevent any
dealings with politically exposed persons or sanctioned individuals. During this
process, we also assess how well prospective suppliers govern matters including data
protection, human rights and environmental impacts. To uphold our requirements,
relevant colleagues regularly participate in industry working groups and multi-
stakeholder initiatives to further understand and promote sector-wide responsible
sourcing practices.
Compliance with
supply chain
legislation
Full legal compliance protects us against
potential financial penalties and reputational
damage and supports responsible, sustainable
business practices.
We conduct regular horizon scanning and have subscriptions to specialist legal and
advisory services to help identify disclosure and transparency requirements.
We also carry out in-house assessments using an industry recognised end-to-end,
data driven risk and compliance platform that enables us to screen, assess, onboard
and continuously monitor third-parties. In addition, we participate in industry working
groups, consult with subject matter experts and carry out regular policy reviews.
Supply chain
management
We depend on our suppliers to help us operate
ethically, minimise environmental harm and
meet client expectations.
Through ongoing supply chain management, we
ensure suppliers meet regulatory obligations, as
well as operating and sustainability standards.
We are committed to building and maintaining a responsible, resilient and transparent
supply chain that upholds the highest standards of ethics, sustainability and operational
performance from onboarding to beyond order fulfilment.
We use Agentic AI to support transparency and help understand a supplier’s ESG
maturity against our Supplier Sustainability Standards and identify areas for further
engagement and improvement.
Human rights and
modern slavery
The highest risk of human rights violations
occurs in the lowest tiers of our supply chain
and has the potential to impact the Group’s
operations and reputation.
There could also be direct legal implications
under legislation such as the UK Modern
Slavery Act 2015.
We are committed to ensuring nobody involved in the production, distribution or
sale of our products, or delivery of our services, is a victim of any form of modern
slavery or any other form of human rights violation.
We have measures in place to identify, assess and mitigate potential labour and
human rights abuses across our value chain and continue to improve colleague
awareness and understanding through internal engagement platforms and
targeted training.
Identified human rights and modern slavery risks and mitigations within our business
and supply chain are reported in our annual Modern Slavery Transparency Statement,
available at thewosgroupplc.com.
Animal welfare
While we have limited direct exposure to
animal welfare impacts, there is a small indirect
impact through the supply of leather watch
straps and products that may contain leather
or other animal-derived materials.
We recognise increasing regulatory
and stakeholder expectations regarding
ethical sourcing and traceability of animal-
derived materials.
The Group is committed to responsible sourcing and compliance with applicable
animal welfare standards.
We will not tolerate any harsh or inhumane treatment of animals and buy products
through the most reputable manufacturers. All watch and accessories suppliers must
provide written confirmation that any animal skins used are humanely sourced from
farmed and sustainably managed sources, and conform to relevant international laws,
including the Convention on International Trade in Endangered Species (CITES).
We continue to grow our range of more socially and environmentally friendly
product options, including watch straps made from vegan-friendly materials.
PRODUCT IMPACTS AND PERFORMANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
130
Metrics and targets FY26 developments FY26 performance FY27 actions
– All product suppliers engaged with
our operating requirements and
Supplier Sustainability Standards
– Compliance assessments of all
prospective suppliers completed
– C
entral database of signed Vendor
Code of Conducts or evidence of
a publicly available equivalent
– G
lobal Procurement Analyst
appointed
– UK Supplier Operating Manual
updated with full details of our
requirements in line with evolving
industry standards
– D
eveloped digital solution to support
compliance with our Vendor Code of
Conduct and operating standards
– O
ngoing compliance checks and
monitoring
– Engage relevant product suppliers
with updated UK Supplier Operating
Manual
– Review and revise US Supplier
Operating Manual
– D
igitally capture and store signed
Vendor Code of Conducts
– Regular horizon-scanning and annual
review of key policies by ESG
Steering Group
– Partnered with the Jewellers
Vigilance Committee (JVC)
– R
epresentation on the RJC Standards
Committee
– All relevant policies approved by ESG
Committee
– Ongoing horizon scanning
– Gap analysis of UK SRS S1 and S2
reporting standards
– 100% of suppliers periodically
screened against our Supplier
Sustainability Standards
– Product suppliers aligned with
relevant sustainability standards
and certifications
– Zero instances of supply-chain
related non-conformances
– C
ontinued to implement and uphold
effective controls to ensure all
supplier partners adhere to the
highest environment and social
standards
– C
ontinued to cease trade in
diamonds, coloured gemstones and
precious metals such as gold, silver
and platinum from sanctioned
Russian sources
– 1
00% of suppliers screened against
our Supplier Sustainability Standards
– 67% of suppliers over £100k spend in
FY26 aligned with relevant
sustainability standards and
certifications
– N
o reported instances of supply-
chain related non-conformances
detected or reported
– Increase overall audit completion to
12% of jewellery suppliers by
turnover
– Extend supplier audits to include
accessories manufacturers
– A
ssess product range to understand
products with full or part
traceability
– Publish an annual Modern Slavery
Statement on gov.uk
– A
nnual review of our Group Human
Rights Policy
– Modern Slavery training delivered to
100% of colleagues with a
responsibility for sourcing on an
annual basis
– Z
ero human rights violations within
our value chains
– D
eveloped a Modern Slavery and
Human Rights Escalation Policy and
Processes
– U
K Supplier Operating Manual
updated to reinforce our requirements
– Conducted a workshop in
partnership with Slave-Free Alliance
to review our framework for handling
disclosures and strengthen our
escalation process
– Published a Modern Slavery
Statement on gov.uk
– G
roup Human Rights Policy
approved by ESG Committee
– Modern Slavery e-learning available
to all colleagues and enhanced
training for all colleagues with a
responsibility for sourcing
– N
o human rights violations within
our value chain detected or reported
– E
ngage key colleagues with our
modern slavery escalation process
and evolve training
– R
evise US Supplier Operating
Manual to reinforce our human
rights requirements
– Compliance with CITES animal
welfare requirements for relevant
suppliers
– Monitoring of traceability for
animal-derived materials where used
and records kept
– Range vegan friendly product options
to support individual client values
– Z
ero breaches of animal welfare
requirements
– U
K Supplier Operating Manual
updated with full details of our
requirements
– C
onformance with CITES animal
welfare requirements for relevant
suppliers
– M
onitoring of traceability for
animal-derived materials where used
and records kept
– V
egan friendly product options
available to clients
– No breaches of animal welfare
requirements detected or reported
– Continue supplier engagement
to improve transparency and
compliance standards
– Extend audit schedule to accessories
suppliers
– E
ngage UK product suppliers with
the updated UK Supplier Operating
Manual
– R
eview and update US Supplier
Operating Manual
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
131
Activity Impacts Commitment and action
Gold and precious
metals
Verified precious materials present
opportunities for premium positioning, with
reclaimed gold providing a lower-carbon option.
Associated risks include conflict, environmental
damage resulting from mining and processing,
and price volatility affecting margins. There are
also legal requirements related to product
description with penalties for non-compliance,
as well as reputational risks linked to provenance.
We are committed to providing clear client disclosure on precious metal purity,
treatments, and origin where available.
All precious metals supplied to us must demonstrate legal compliance according to
all the provisions of the financial market supervisory authority and be sourced from
verifiable refineries on the London Bullion Market Association Good Delivery List
or the UAE Gold Good Delivery Scheme.
Every product supplied to us must be hallmarked via UK Assay Offices and accurately
described per Federal Trade Commission (FTC) jewellery guides and we continue to
encourage the use of recycled or single origin gold in production processes and
finished products.
Natural diamonds and
gemstones
Clients expect every product they buy from
us to be authentic, ethically sourced and not
to have funded civil wars or rebel groups in
war-torn countries.
In addition to human rights risks, there is a
potential for environmental impacts from
mining as well as regulatory and reputational
risks if provenance or enhancements are
not disclosed.
We are committed to sourcing natural diamonds and gemstones with trusted
provenance and certified quality. All suppliers of natural diamonds, or jewellery
incorporating diamonds, must comply with the Kimberley Process Certification
Scheme (KPCS), as well as all laws in relation to this scheme and the World Diamond
Council System of Warranties Assurance (WDC SoW).
We require suppliers to follow trade association resolutions and mandate training
on government restrictions prohibiting the trade in conflict diamonds.
To support greater transparency, we are introducing natural diamonds with
blockchain technology which provide a traceable and tamper-proof record of
a diamond’s provenance as it progresses from rough to polished to retail.
Our quality control team inspect diamonds following delivery for authenticity using
detection equipment, or through the digital identity if blockchain is used.
Lab-grown diamonds
During the year we introduced the sale of
lab-grown diamond jewellery, providing clients
with a more accessible and sustainable option
to natural diamonds. Lab-grown diamonds
also feature within a small number of luxury
watch faces.
There are potential risks linked to ‘green claims’
and product disclosure, for example, where
high energy use occurs and is not disclosed, as
well as a risk of client confusion or mis-selling
between lab-grown and natural stones. There
may also be a reputational impact if origin,
growth method or treatments are unclear.
We are committed to ensuring every lab-grown diamond we sell is independently
certified, fully disclosed as laboratory created and fully traceable.
All lab-grown diamonds supplied to the Group must be clearly, consistently, and
unambiguously disclosed at every stage in the supply chain and be accompanied by
verifiable documentation that explicitly states their lab-grown origin, growth method
(Chemical Vapour Deposition or High Pressure High Temperature), grading details
and treatment methods.
With the manufacture of lab-grown diamonds requiring electricity for high-pressure,
high-temperature processes, we also source from suppliers who utilise, or are
transitioning to renewable energy sources.
Information about the claims being made, including details to support the verification
of the claims, and the systems in place to achieve them, is available to clients at the
point of sale.
Product disclosure
Sourcing risks related to high-value watches and
jewellery include authenticity, counterfeiting,
and product safety. There is also regulatory
exposure in relation to consumer protection,
hallmarking, FTC Guidance and product safety.
Additionally, reputational risks can occur if
provenance, materials or warranties are unclear,
resulting in financial impacts from returns,
recalls, litigation, and loss of consumer trust.
The Group is committed to ethical marketing and advertising practices, which
includes a clear, accurate and honest representation of our products. All product
suppliers must comply with internationally accepted standards and existing
obligations under consumer protection law and safety legislation.
Before any products are ranged, suppliers must disclose product details as well as
compliance and warranties. Sustainability and provenance claims must be verifiable,
and any health and safety risks must be disclosed, allowing us to help clients make
more informed purchasing decisions and protect them from any negative
consequences or disappointment.
We carry out quality control checks to ensure the specifications declared by the supplier
are accurate and fully compliant with our requirements to ensure clients are provided
with accurate product information, supported by clear pricing and after-sales policies.
Green claims
Tightening regulation as well as complex supply
chains put us at risk of misleading environmental
claims.
Growing client expectations for sustainable
products, credible sustainability differentiation
and reduced life cycle impacts also presents
commercial opportunities.
The Group takes a zero-tolerance approach to misleading product representation.
Claims about the environmental aspects or performance of our products must be
accurate and substantiated using robust and verifiable methods. We require records
on aspects such as product composition, testing and provenance and have systems in
place for verifying environmental claims, such as documentation from certification
schemes.
PRODUCT IMPACTS AND PERFORMANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
132
Metrics and targets FY26 developments FY26 performance FY27 actions
– All gold sourced from UAE Gold
Good Delivery Scheme or LBMA
conformant refiners
– Encourage product suppliers to
consider using recycled metals in the
manufacture of products
– Our requirements are stipulated on
all orders and included in our
General Conditions of Purchase
– Engagement with jewellery industry
to standardise terminology to
describe recycled precious metals
content
– Supplier conformance to source gold
from UAE Gold Good Delivery
Scheme or LBMA-conformant
refiners
– Maintain 100% LBMA-conformant
sourcing
– C
ontinue engagement with
jewellery industry to help
standardise terminology for recycled
precious metals content
– All product suppliers compliant
with KPCS
– T
raceability coverage to country
of origin for all purchased natural
diamonds
– Q
uality control checks on all samples
and every product line containing
natural diamonds in line with
sampling plan
– L
aunched first natural diamond range
incorporating Diamond Trading
Company diamonds and Tracr™
technology
– S
upplier conformance with KPCS
– Q
uality control checks on all samples
and every product line containing
natural diamonds in line with
sampling plan
– E
xtend showroom and online training
on natural diamonds and other
gemstones, including terminology,
treatments and traceability
– All products with explicit lab-grown
disclosure
– A
ll product sustainability claims
supported with documented
evidence
– Lab-grown diamond training
developed and delivered to relevant
colleagues
– Supplier conformance with explicit
lab-grown disclosure
– C
ertification from reputable
gemmological laboratories for all
lab-grown diamonds over 0.50ct+
– Formalise and engage key
stakeholders with lab-grown
diamond policy
– Extend colleague training on
lab-grown diamonds to US
– All product lines checked to ensure
they conform to specifications agreed
with the supplier
– UK Supplier Operating Manual
updated with full details of our
requirements, including lab-grown
diamonds
– All product lines checked to ensure
they conform to specifications agreed
with the supplier
– Engage UK product suppliers with
updated UK Supplier Operating
Manual
– Review and update US Supplier
Operating Manual
– All product sustainability claims
supported with documented
evidence
– Suppliers encouraged to attain
relevant sustainability standards or
certifications
– 67% of suppliers over £500k spend in
FY26 aligned with relevant
sustainability standards and
certifications
– Formalise Responsible Marketing
Policy in line with CMA and FTC
guidance
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
133
56%
<1%
1%
1%
6%
36%
UK
Middle East and Africa
Americas (exc. US)
Asia Pacific
Europe (exc. UK)
United States
2. Construction
1. Administrative
3. Energy & Utilities
4. Logistics
5. Operations
6. Property Management
7. Raw Materials
8. Technology
9. Watches & Jewellery
6%
12%
6%
2%
21%
13%
6%
17%
17%
1
2
3
4
5
6
7
8
9
SUPPLY CHAIN PROFILE
During the year, we transacted with approximately 1,358 product and non-
product suppliers (over £50k annual spend) worldwide, including approximately
200 watch and jewellery brands.
IMPROVING SUPPLIER STANDARDS
Through our Supplier Sustainability Standards, we ask supplier partners to follow
the Organisation for Economic Co-operation and Development (OECD) Due
Diligence Guidance and implement the OECD 5-Step guidance. This risk-based
approach is designed to help organisations avoid contributing to conflict, serious
human rights impacts and financial crime through their operations. The
framework includes embedding strong management systems, identifying risks,
independent third-party audits and transparency.
We also continue to encourage all suppliers to align with relevant, well-recognised
sustainability standards and certifications. For watch and jewellery manufacturers,
we promote membership of the Responsible Jewellery Council (RJC). At the time
of this report, 38% of our watch and jewellery suppliers are accredited members
of the RJC and, as such, are subject to rigorous independent audits to ensure
compliance with their standards.
As part of our onboarding process, suppliers are asked to provide specific
information about their business to help ensure compliance with our terms
and identify any ‘red flags’, including but not limited to, sanctions, politically
exposed persons and negative reputational issues. They are also required to have
appropriate Cyber Security and Data Protection measures and systems in place.
Suppliers must also read and understand relevant Watches of Switzerland Group
policies, which underpin our Code of Ethics and set out the behaviours expected
to help ensure that risks from unethical conduct and illegal business practices are
reduced and eliminated as far as possible.
During the year, we transitioned to a new supply chain management system,
which deploys AI agents to retrieve and assimilate publicly available information
and is customised to assess the level of supplier alignment with our Supplier
Sustainability Standards. Scores relative to the level of performance against
multiple indicators are automatically calculated, and areas for further engagement
and improvement are highlighted.
To monitor our supply chain performance and manage compliance with our
standards, colleagues with a responsibility for sourcing are trained to assess social
and environmental risks and work collaboratively to address areas for improvement.
ON-SITE AUDITS
We want to build strong, long-term relationships with all supplier partners,
and will always collaborate to resolve issues wherever possible. However,
if we find evidence of a serious breach of our terms, we will not hesitate
to terminate our contract and, if necessary, notify the relevant authorities.
Suppliers considered ‘High Risk’ in our screening will be asked to present evidence
to support compliance with our terms. This can include a valid third-party audit
report, supported by any completed corrective action plans.
If this evidence is unavailable or considered unsatisfactory, we will conduct our
own on-site audit. On-site audits are carried out by specialist, independent,
third-party auditors who hold an ISO 17020 certification for social audit services
and have expert knowledge of local laws and practices.
Historically, jewellery suppliers present a higher risk profile, therefore, during the
year, we audited 10.4% of our jewellery suppliers by turnover and implemented
5 corrective action plans. In FY27, we will increase the number of factory audits
to 12% and expand our audit schedule to include accessories suppliers.
Factory Audits and Corrective Actions
Facilities
audited
After corrective
action
Total factories audited 6 6
Low risk 1 4
Intermediate risk 3 0
High risk 1 Corrective actions in progress
Critical risk 1 Corrective actions in progress
Corrective action plans completed 3
Corrective plans in progress 2
Delisted/not approved 0 0
During the reporting period, our auditors identified one high risk finding, and one
critical risk finding, requiring corrective action.
The high risk finding related to incomplete environmental and product disclosure
information. A corrective action plan is in progress, including enhanced supplier
engagement and ongoing data collection to improve the completeness, quality
and transparency of disclosure.
The critical finding related to labour law compliance and health and safety
practices. A corrective action plan has been initiated with the supplier, focused
on strengthening compliance controls, improving health and safety management
practices, and increasing visibility and traceability of sourcing documentation to
support effective remediation.
Progress against both corrective action plans is being actively monitored through
ongoing supplier engagement and follow-up review processes.
SUPPLY CHAIN DUE DILIGENCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
SUPPLIERS BY TYPESUPPLY CHAIN BY REGION
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
134
PRODUCT INNOVATION
The year 2026 marked two major milestones for Ulysse Nardin:
180 years of legacy and 25 years of the Freak.
To celebrate these milestones, the manufacture unveiled
a year marked by Freak novelties and continued innovation,
including a complete re-engineering of the Freak X. More
compact in design, more advanced in engineering, and
enhanced in finishing, the new Freak X combines high
horology with high technology, with both case and
integrated metal bracelet crafted from 80% recycled
steel sourced from production waste. Rubber straps
and ethically sourced leather options are also available
to suit individual client preferences.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
135
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
CONTINUED
As the laws and regulations governing businesses become ever more complex
we need to ensure the judgements and decisions we make are taken with both
the knowledge and application of the highest ethical principles.
The Corporate Governance Report that begins on page 151 sets out how the
Board and its Committees operate and apply the provisions and principles of the
UK Corporate Governance Code 2024 and other regulation and best practices.
The Watches of Switzerland Group has in place a number of policies and
procedures to ensure risks from unethical conduct and illegal business practice
are reduced and eliminated as far as possible. These underpin our Code of Ethics,
which together with our Vendor Code of Conduct and Supplier Sustainability
Standards, set out the behaviours expected of our colleagues and third-parties
we do business with.
The Environmental, Social and Governance section which starts on page 80
provides information regarding the management of ESG issues, specifically our
approach to climate and transition planning, health and safety, data protection,
human rights and sustainable business practices, whilst reinforcing accountability
and long-term value creation for our stakeholders and includes key performance
data as well as our full TCFD disclosures.
HUMAN RIGHTS AND MODERN SLAVERY
We remain committed to ensuring nobody involved in the production,
distribution or sale of our products, or delivery of our services, is a victim of any
form of modern slavery or any other form of human rights violation, and have
measures in place to identify, assess and mitigate potential labour and human
rights abuses across our value chain. This includes a commitment to protect
women’s rights across our operations and supply chain.
Our Human Rights Policy was reviewed and approved by the Board in October
2025, and applies to all global business activities and everyone who works for us,
and everyone we do business with.
Our Vendor Code of Conduct includes specific requirements founded on the
conventions of the ILO, which are guided by international human rights principles
and encompassed by the Universal Declaration of Human Rights.
We continue to partner with Slave-Free Alliance (SFA), who provide expert
support by reviewing and assisting in the development of our policies, processes
and practices, which include forced labour risk assessments and specialist training.
In line with the requirements of the UK Modern Slavery Act 2015, the Group is
committed to continuous review of human rights and modern slavery mitigations
within our business and supply chain and our mitigations are reported in our
annual Modern Slavery Transparency Statement, available at thewosgroupplc.com
Oversight of the operation of the Group’s key policies in this area is the
responsibility of the Board. Where requested by the Board, the Audit & Risk
Committee or ESG Committee will review the adequacy and security of the
arrangements in place.
CODE OF ETHICS
Our governance framework is underpinned by our Code of Ethics which is
comprised of a number of additional standalone policies covering bribery and
corruption, fraud, competition law and data protection, information security and
cyber security protection. Taken together these policies ensure that we operate
in an open, fair and honest manner in all of our business dealings.
During the year, the Board reviewed and approved the Code of Ethics, which can
be found on the corporate website thewosgroupplc.com.
ANTI-BRIBERY, CORRUPTION & FRAUD
The Company maintains a zero-tolerance approach to all forms of corruption,
including, but not limited to, bribery and fraud. The Board has overall responsibility
for the Anti-Bribery, Corruption & Fraud Policy, which is regularly reviewed by Senior
Management and the Audit & Risk Committee. The Policy reinforces the Board’s
commitment to conducting the Group’s business affairs to ensure that it does not
engage in or facilitate any form of corruption. The aim of the Policy is to ensure
compliance with applicable anti-bribery and corruption legislation and regulations
and to ensure colleagues act responsibly and ethically at all times when conducting
business. The Policy sets out the Group’s protocols in relation to hospitality and gifts.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
136
GOVERNANCE AND
COMPLIANCE
The Group’s Company Secretary and General Counsel has day-to-day
responsibility for the Policy and reports to the Chair of the Audit & Risk
Committee and to the Board as required. Colleagues are required to complete
mandatory e-learning covering anti-bribery, corruption and fraud risks annually.
High risk locations undertake additional face-to-face training on an annual basis.
During the year, the Policy was reviewed and approved by the Board and
amended to provide additional clarity and reinforcement of the Company’s
aversion to and strict protocols regarding fraud and the receiving and giving
of gifts and hospitality.
ANTI-MONEY LAUNDERING AND SANCTIONS
The Company has rigorous processes and procedures which operate alongside
n Anti-Money Laundering (AML) Policy which was reviewed by the Board during
the year. The Policy enforces a strict regime in the prevention of money
laundering. The Group Policy is supported by internal operational and local
territory specific business policies.
TAX TRANSPARENCY
We seek to build strong, transparent, and constructive working relationships with
all tax authorities. The Group has held the Fair Tax Mark since February 2022, and
achieved recertification from the Fair Tax
®
Foundation in March 2025. The Fair
Tax Mark is the gold standard of responsible tax conduct and demonstrates that
the Group pays the right amount of corporate income tax at the right time and
in the right place. The Group pays corporation tax on all operations and does not
utilise any tax havens for the purposes of tax evasion or financial secrecy. It also
does not engage in aggressive tax planning or use any tax avoidance schemes.
The Board renamed the Corporate Criminal Offence Policy to Anti-Facilitation
of Tax Evasion Policy, which was felt to better reflect its purpose. The updated
policy, which sets out the Group’s zero-tolerance approach to tax evasion was
reviewed and approved by the Board during the year. The policy sets out the
relevant legal framework, and outlines how the Group identifies potential tax
evasion risks.
During the year, anti-facilitation of tax evasion training was delivered to relevant
colleagues, including those in support and retail, and the Directors were provided
with awareness documentation, as it is recognised this is an important part of the
legislation and HMRC expectations. Further information on our Tax Strategy, our
Fair Tax Mark Statement and Anti-Facilitation of Tax Evasion Policy can be found
at thewosgroupplc.com.
PAYMENT PRACTICES
We understand the importance of maintaining good relationships with suppliers
and have transparent payment terms and payment procedures to ensure prompt
payment. It is Group policy to agree appropriate terms and conditions for
transactions with suppliers (ranging from standard written terms to individually
negotiated contracts) and for payments to be made in accordance with these
terms, provided the vendor has complied with its obligations.
Our payment practices report is available at check-payment-practices.service.gov.uk/
search, which showed the Group took on average 26 days to pay in the six-month
period to the end of FY26.
RETAIL RETURNS POLICY
The business operates a standard, client-facing Retail Returns Policy. The
manufacturer’s warranty for product varies by brand and style, however, most
warranties are usually valid for two years from the date of purchase, with three
years of extended warranty for certain watch brands. If a product malfunctions,
or is not ‘fit for purpose’, we will, at our discretion, repair or replace as appropriate.
DATA PROTECTION, INFORMATION SECURITY AND CYBER SECURITY
The Group has a responsibility to protect client and colleague personal data, and
use it fairly and appropriately in line with the applicable law and regulation in each
country in which we operate. We have a Group Data Protection Officer with
oversight of all data protection matters, and a Cyber Security Team responsible
for security measures across our networks and systems. The two work closely
together to ensure a joined-up, risk-based approach.
The Group’s data protection framework continues to mature to meet the needs
of a growing global business and evolving legal landscape. We have in place a
broad range of measures designed to meet our data protection and security
obligations, including policies and processes, governance and oversight measures,
and mandatory annual training. Alongside this, we employ a suite of technical
controls to detect and protect against known and emerging security threats.
Further information on how we govern associated risks can be found on page 145.
The Group has not experienced any reportable personal data breaches over the
last three years.
The Company is continually improving its cyber security and significant
improvements have been made during the year, including enhanced controls
around passwords and access requests, increased penetration testing and social
engineering simulations to minimise the risk of access exploitation.
HEALTH AND SAFETY
The Company has a Group Health & Safety Statement and governance processes
in place to ensure the Board is updated regularly on health and safety activities
and on any accidents or incidents that occur.
During the year, the Group reviewed and made a number of changes to the
Statement to ensure it remained up to date and relevant. The Board approved
the Statement which can be found at thewosgroupplc.com. Alongside the Group
Statement each territory operates within local policies which provide additional
information on day-to-day management in this area.
Further information on the Company’s health and safety activities can be found
on page 94.
The Group complies with relevant legislation regarding product safety and legislation.
We continually review legislation and requirements and work with our brand
partners to ensure early and ongoing compliance.
WHISTLEBLOWING
It is important for the business to have an open and transparent work culture. We
aim to conduct our business with the highest standards of honesty and integrity
every day. The Board has overall responsibility for this policy and the Director of
Internal Audit & Risk has day-to-day operational responsibility. The Chair of the
Audit & Risk Committee receives a summary of all protected whistleblowing
reports for communication to the Board.
Under the Policy, whilst colleagues are encouraged to report any concerns or
complaints, without fear of recrimination, the Board acknowledges there may be
circumstances where internal reporting lines may not be suitable or may discourage
colleagues from speaking out. We use a third-party to provide an independent
reporting system. This is a global facility for colleagues to raise concerns
confidentially, with the option of maintaining anonymity. Colleagues are required
to complete mandatory e-learning training on whistleblowing protocols annually.
The Company has a number of other Group policies, all of which can be found
on its corporate website, thewosgroupplc.com.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
137
The Watches of Switzerland Group defines risk as uncertainty around the
organisation’s ability to achieve its objectives and execute its strategy effectively.
Risks can be positive (opportunities) and negative (threats) and are a combination
of the likelihood of an event and the impact of the consequence.
Risk is inherent in both the Group’s operations and strategic decision-making.
Risks and uncertainties could impact the delivery of strategic and operational
objectives. Effective risk management helps support the successful delivery of the
Group’s objectives. The Board’s role is central to understanding and providing
oversight into how risks are being managed and addressed. The Board has
established a framework of prudent and effective controls which enable risk to be
assessed and managed. The Board takes responsibility for the management of risk
and internal control systems throughout the business. This includes determining
the nature and extent of the principal risks the Board is willing to take in achieving
strategic objectives (the Board’s risk appetite), and challenging management’s
implementation of effective systems of risk identification, assessment,
prioritisation and management.
The Audit & Risk Committee, on behalf of the Board, has responsibility for
maintaining oversight of the Group’s framework for risk management. Whilst
ultimate responsibility for the oversight of risk management rests with the Board,
the effective day-to-day management of risk is embedded within the business
through a layered assurance approach.
The Board recognises that risk management is a fundamental part of good
corporate governance and management practice and to be effective, should be
embedded within the organisation’s culture. The Board is, therefore, committed to
ensuring that risk management forms an integral part of its philosophy, practices and
business plans rather than being viewed or practised as a separate programme and
that responsibility for implementation is accepted at all levels of the organisation.
During the year, the Board reviewed the effectiveness of the Group’s risk
management and internal controls systems and began implementing a monitoring
programme aligned to the requirements of Provision 29 of the UK Corporate
Governance Code 2024 (the ‘Code’). This review included the discussion and
review of risk registers and the internal controls across all business functions as
part of an annual exercise facilitated by the Internal Audit team.
RECOGNISING EFFECTIVE
RISK MANAGEMENT
“Effective risk management enables us to act with confidence,
protect what matters most, and deliver sustainable growth.”
BRIAN DUFFY
CEO
RISK MANAGEMENT
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
138
GROUP RISK REGISTER
WHAT WE MONITOR
Summary of the key risks facing the Group, prepared through review of departmental risks identified through the bottom-up risk
identification process, and the Group-level risks identified and owned by the Trading Board senior leaders.
OUR RISK LANDSCAPE
Current risks: risks we are managing
now that could stop us from achieving our
strategic objectives.
Emerging risks: risks with a future
potential impact from external or internal
opportunities or threats.
WHAT WE ASSESS
– Risk ownership: each risk has a named
owner
– Likelihood and impact: globally applied
scoring scale
– Gross risk: before mitigating controls
– Mitigating controls: subject to Internal
Audit review
– Net risk: after mitigating controls applied
– Risk movement: any change in risk score
since previous assessment
– Risk appetite: defined at subcategory level
– Target risk: overall target risk score
– Actions: for further mitigation, if required
OUR IDENTIFIED RISKS
Risks are categorised into one of six
categories:
– Financial
– Operational
– Client
– People
– Regulatory
– ESG
DEPARTMENTAL RISK REGISTERS
Owned by individual departments and teams across the Group. These identify specific risks and mitigating controls arising from day-to-day operations.
RISK MANAGEMENT PROCESS
IDENTIFY
– Risk registers are completed by each
business function, identifying the risks
in their areas of control
– The Audit & Risk Committee and
Board identify key risks within the
Group’s strategic priorities
– Horizon scanning takes place
periodically with Senior Management
ASSESS
– The likelihood of risk occurrence and
the potential impact of the risk are
assessed. This assessment takes place
before and after consideration of
mitigating controls
– The risks are reviewed to determine
their categorisation, including
financial, operational, client,
regulatory and reputational
– Appetite for each key risk is assessed
with a target risk position agreed to
reflect the level of risk that the
business is willing to accept
MANAGE
– Controls and mitigation plans are
implemented to manage the risks
– Consideration is given to the Board’s
risk appetite to help determine the
appropriate risk management strategy
– Actions are agreed to further
manage the identified risks, in line
with risk appetite and according
to risk strategy
MONITOR
– Continued oversight and tracking of
identified risks. These are presented
to the Trading Board, the Audit & Risk
Committee and the Board
– The Internal Audit Teams review the
effectiveness of controls and identify
gaps in control, requiring further action
– Risk incidents are reviewed, and the
lessons learned drive further mitigation
2
3
4
1
The Group’s established framework for managing risks has continued to be in place across the business throughout this financial year, with
responsibility to implement the Board’s policies on risk management and internal control sitting with management.
1
4
3
2
Identify
Assess
Manage
Monitor
The Group’s risk management framework helps
identify, assess, manage and monitor risks to
within the risk appetite set by the Board, whilst
taking advantage of opportunities as they are
presented. Senior Management is responsible for
minimising adverse exposures across the Group
and its stakeholders.
Climate-related risks follow the same framework
as all other risks impacting the business.
Additional information relating to the Group’s
TCFD disclosures, including risk management
compliance, governance, strategy and
TCFD-related risks, can be found on page 108.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
139
Set out below are the key responsibilities and key activities of the various functions of the Group in relation to risk management:
– Oversees the adoption of appropriate risk management systems that
identify emerging and established risks facing the Group and its
stakeholders
– Determines the nature and extent of the principal and emerging risks faced
by the Group and those risks which the business is willing to take in
achieving its strategic objectives (determining its risk appetite)
– Conducts reviews of the risk register and principal risks
– Members have responsibility for managing risk within their areas
of responsibility
– Identifies new and emerging risks
– Maintains the business function risk registers
– Identifies and assesses risk within business functions and implements
actions to reduce risk exposure to an acceptable target level
– Embeds and manages internal controls and risk management processes
as part of business-as-usual operations
– Assists the Board to fulfil its corporate governance responsibilities in relation
to financial reporting, internal controls and the risk management framework
– Conducts formal reviews of the principal and emerging risks twice a year, one
of which is in connection with the consideration of the Viability Statement
– Reviews and oversees the Group risk register and risk management
framework and assesses their effectiveness in mitigating Group-level risks
– Reviews key risk areas with relevant management to understand the nature
of the risks and adequacy of the mitigations and controls in place
– Annually reviews and approves the Group Risk Management Policy
HOW WE MONITOR
BOARD
Collective responsibility for the management of risk throughout the business
TRADING BOARD
Managing the risk management process
on a day-to-day basis
OPERATIONAL MANAGEMENT
Identifying and managing risks on a day-to-day basis
AUDIT & RISK COMMITTEE
Oversees risk management systems and process,
under delegation from the Board
– Provides an objective compliance and monitoring overview – Identifies non-compliance with key business processes
OPERATIONAL AUDIT, LOSS PREVENTION AND SECURITY TEAM
Reviews compliance with certain key internal procedures in showrooms and at other locations
– Ensures that principal risk topics are scheduled for regular review
– Facilitates updates to the corporate and business function risk registers
in partnership with operational management
– Presents the outcome of the risk review to the Trading Board and the
Audit & Risk Committee
– Shares risk management information and best practice across the Group
INTERNAL AUDIT TEAM
Provides assurance to the Audit & Risk Committee through independent reviews of agreed risk areas
– Agrees how the principal risks should be managed or mitigated and
over what timeframe to reduce the likelihood of their incidence or
the magnitude of their impact
– Establishes clear internal and external communication channels
on the identification of risk factors
– Determines the monitoring and review process
RISK MANAGEMENT
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
140
RISK APPETITE
Risk appetite is an expression of the amount and types of risk that the Group is willing to take to achieve its strategic and
operational objectives. The Group accepts that it cannot achieve its long-term strategic objectives without being exposed
to an element of risk.
Understanding current and emerging risk is therefore integral to the Group’s decision-making process. The Board
determines the amount of risk the Group is willing to accept in the pursuit of the Group’s strategic objectives, dependent
on the type of risk. In exploring risks and opportunities, we prioritise the interests and safety of our clients and colleagues
and seek to protect the long-term value and reputation of the brand and the brands we partner with, while maximising
commercial benefits to support responsible and sustained growth.
The Group assesses the level of risk exposure against its associated risk appetite to ensure that we appropriately prioritise
our resources to manage risks within our risk appetite. Where the residual risk remains outside the Board’s risk tolerance,
additional actions are identified to further mitigate the risk down to an acceptable target level. The Group’s risk appetite
and tolerance levels were considered and approved by the Board and are reviewed annually. These are used to set
tolerance limits and target risks for each of the principal risks and refine mitigation plans where appropriate.
THE UK CORPORATE GOVERNANCE CODE
2024 REQUIRES COMPANIES TO
DETERMINE THEIR RISK APPETITE
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
141
Low
Low
High
High
Likelihood
Impact
1
7
10
11
93
6
4
2 5 8
The Board is responsible for determining the nature and extent of the principal
risks it is willing to take in achieving its strategic objectives and maintains sound
risk management and internal control systems. With the implementation of
Provision 29 of the UK Corporate Governance Code 2024 (the ‘Code’) the
Board will also be responsible for assessing the effectiveness of the Group’s
material controls over its principal risks and disclosing their effectiveness
from F Y27.
In preparation for the disclosure, the Group continues to build on good progress,
bringing together a cohesive Risk & Material Controls framework that structures
controls and mitigations across its key risks and activities. As part of this process
the Board has completed its assessment of the Group’s risk landscape and has
identified the most significant risks and uncertainties and related material controls.
The Group recognises that the profile of risks constantly changes, and additional
risks not presently known, or that may be currently deemed immaterial, may also
impact the Group’s business objectives (as detailed on page 35) and performance.
The Risk & Material Controls framework is therefore designed to manage rather
than eliminate the risk of failure to achieve business objectives, and, as such, can
only provide reasonable and not absolute assurance against these principal
uncertainties impacting business performance.
The Board confirms that it has carried out a robust assessment of the principal
risks facing the Group, including those that would threaten its business model,
future success, solvency or liquidity.
EMERGING RISKS
As part of the ongoing risk management framework described above, the Group
identifies emerging risks and determines their potential impact on the business.
The Group undertakes horizon scanning to monitor any potential risks that could
change our industry and/or our business, looking at both the inherent risk and
opportunity. Emerging risks are new and evolving, and thus their full potential
impact is still uncertain. The Group defines emerging risks as newly developing
risks that are often difficult to quantify but may materially affect our business.
Emerging risks are usually highly uncertain risks which are external to the Group,
and we take a proactive approach to the emerging risk management processes,
with the objective of enabling us to:
– Identify, manage and monitor a broad range of potential emerging risks
– Mitigate the impact of emerging risks which could impact the delivery of the
Group’s strategy
– Record each emerging risk within an Emerging Risk Register
The Board’s assessment of the principal risks and uncertainties facing the Group
and the mitigations in place are set out opposite.
IDENTIFICATION, EVALUATION AND
MANAGEMENT OF THE GROUP’S RISKS
PRINCIPAL RISKS AND UNCERTAINTIES
HEAT MAP (POST-MITIGATION)
Risk
1
Business strategy execution and development
1
2
Key suppliers and supply chain
2
3
Client experience and market risks
3
4
Colleague talent and capability
4
5
Data protection and cyber security
5
6
Business interruption
6
7
Regulatory and compliance
7
8
Economic and political
8
9
Brand and reputational damage
9
10
Financial and treasury
10
11
Climate change
11
Indicates increasing risk
To support our assessment of risk, the heat map above shows the relative
likelihood and impact of the Group’s principal risks post-mitigation i.e. after the
effects of our control activities. The graph also indicates those risks that have seen
significant movement during the year. A more detailed assessment of each
principal risk is provided over the following pages.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
142
1. BUSINESS STRATEGY EXECUTION AND DEVELOPMENT
Principal risk description
If the Board adopts the wrong strategy or does not implement
its strategy effectively, the business may suffer. The Group’s
growth strategy exposes it to risks and the Group may
encounter setbacks in its ongoing expansion in the US and UK.
The Group’s significant investments in its showroom portfolio,
IT systems, colleagues and marketing may be unsuccessful in
growing the Group’s business as planned. As the Group
continues to make acquisitions, these may prove unsuccessful
or divert its resources. Further growth through acquisition is
dependent upon the Group’s ability to identify suitable targets,
conduct effective due diligence, negotiate transactions on
favourable terms, complete such transactions and successfully
integrate the acquired businesses. The Group may fail to respond
to the pressures of an increasingly changing retail environment
effectively and rapidly. The re-evaluation of priorities and their
delivery, including the consideration of initiatives to respond to
permanent changes in client behaviours or to change working
practices, is paramount in the current environment.
How we manage or mitigate the risk
– The Board reviews its business strategy on a regular basis to
determine how sales and profit can be maximised, and business
operations can be made more efficient
– The Board has significant relevant experience, including in the
international retail and luxury markets
– The CEO provides updates to the Board on key development
opportunities and initiatives
– Expansion of the property portfolio or potential acquisitions are
subject to strict payback criteria. Return on investment is
monitored closely
– Key management information is provided to the Board on a regular
basis to help inform strategic decision-making
– The Group has adapted its strategy to take advantage of online
trading and client appointments and, maintains the Luxury Watch
and Jewellery Virtual Boutique to maximise sales
– The Group has diversified its operations through expansion into
wholesale, ecommerce platforms and enhanced luxury branded
jewellery offers. There is international market diversification
reducing reliance on one territory
Change in risk
No change
Links to strategic
pillars
1
2
3
4
5
6
Links to KPIs
1
2
3
4
5
6
7
8
9
10
11
12
2. KEY SUPPLIERS AND SUPPLY CHAIN
Principal risk description
The manufacture of key luxury watch brands is highly
concentrated among a limited number of brand partners and
the production of luxury watches is limited by the small number
of master watchmakers and the availability of artisanal skills.
Owners of luxury watch brands control distribution through
strict Selective Distribution Agreements.
Consequently, the relationship with owners of luxury watch
brands is crucial to the Group’s success. Some of the Group’s
distribution agreements with luxury watch brands provide
owners of such brands with a right to terminate the agreement
in the event of a change of control and/or management of the
Group. The Group is subject to the risk that owners of luxury
watch brands may decide to terminate these contracts or
otherwise not to renew them upon expiry, or to reduce the
number of agencies they grant to the Group. The Group’s
distribution agreements with suppliers do not guarantee a
steady supply of merchandise. The Group’s business model
may also come under significant pressure should the owners
of luxury watch and jewellery brands choose to distribute their
own watches, increasingly or entirely by-passing third-party
retailers such as the Group.
How we manage or mitigate the risk
– The Group fosters strong relationships with brand partners and
other suppliers, many of which have been held for a significant
length of time
– Supplier distribution contracts are closely monitored to ensure
continued compliance with contractual obligations
– The Group works collaboratively with brand partners to identify
product trends and forward demand
– Continued focus on providing exceptional client experience,
representing the brands in the best possible way
– Client experience is further elevated through new, larger
showrooms that are supported by the brands
– In-depth training for showroom colleagues is provided, including
specific training provided by the brand partners
– The Group strives to ensure a broad-based sales mix, with less
reliance on individual brands to drive success
– Review opportunities to extend our expertise into complementary
business and service models
Change in risk
No change
Links to strategic
pillars
1
3
4
6
Links to KPIs
1
2
6
8
9
10
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
STRATEGIC PILLARS
1
Revenue
2
Operating Profit
3
Adjusted EBIT
4
Basic Earnings Per Share
5
Adjusted Earnings Per Share
6
Return on Capital Employed
LINKS TO KPIS
7
Cash Generated from
Operations
8
Average Retail Selling Price
9
Number of Showrooms
10
Colleague Engagement
Survey
11
ESC Carbon Emissions
12
ESG Circularity
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
143
3. CLIENT EXPERIENCE AND MARKET RISKS
Principal risk description
An inability to maintain a consistent high-quality experience
for the Group’s clients across the sales channels, particularly
within the showroom network, could adversely affect business.
The increased number of registration of interest (ROI) watches
could adversely impact the perceived client experience. The
Group faces competition and any failure by the Group to
compete effectively could result in a loss of market share or the
ability to retain supplier agencies. Long-term consumer attitudes
to diamonds, gold and other precious metals and gemstones
could be affected by a variety of issues, including concern over
the source of raw materials, the impact of mining and refining
of minerals on the environment, labour conditions in the supply
chain, and the availability and perception of substitute products,
such as cubic zirconia. Equally, longer-term consumer attitudes
to more technologically advanced watches, such as ‘smart
watches’, could reduce consumer demand for luxury watches.
How we manage or mitigate the risk
– The Group provides the ultimate luxury environment for its clients
to feel welcome, appreciated and supported
– Our Xenia Client Experience Programme further elevates and
differentiates our client experience proposition
– Our brand partners audit and assess our client experience enabling
us to independently benchmark and evaluate our performance
– Exceptional training is provided for our showroom colleagues, and
other client-facing colleagues, to allow them to provide the best
client service, along with in-depth product knowledge
– The CRM database allows the Group to engage with the client
on their journey from potential to loyal client
– The Group continues to invest in and develop its product offering
to improve the value offered to consumers, retailers and
manufacturers
– Competitor activity is monitored in detail, enabling strategic
decision-making on key market positions
– Our Luxury Watch and Jewellery Virtual Boutique experience is
a unique differentiator and recognised as a competitive advantage,
as is the Group’s scale and technological capabilities
– Consumer trends are monitored to ensure product ranges remain
aligned to client demand
Change in risk
No change
Links to strategic
pillars
1
2
3
4
5
6
Links to KPIs
1
2
6
8
9
10
11
12
4. COLLEAGUE TALENT AND CAPABILITY
Principal risk description
The Group depends on the services of key talent to manage its
business, and the departure of such colleagues or the failure to
recruit and retain suitable personnel could adversely affect the
Group’s business. Client experience is an essential element in
the success of the Group’s business, where many clients prefer
a more personal face-to-face experience and have established
strong relationships with the Group’s retail colleagues. An
inability to recruit and retain suitably qualified colleagues,
especially with specialised knowledge of luxury watches and
jewellery, would have a material impact on the Group.
How we manage or mitigate the risk
– The Nomination Committee considers succession planning
for the Board, and Senior Management
– The Trading Board considers the development of Senior
Management to ensure there are opportunities for career
development, promotion and appropriate succession
– Company recognition programmes are in place to incentivise
and motivate colleagues
– A wide range of training and development programmes are
available to colleagues
– The remuneration and benefits packages for all colleagues are
annually reviewed
– We utilise CONNECT, a two-way, engaging, global platform
to underpin Group communications to colleagues
Change in risk
No change
Links to strategic
pillars
6
Links to KPIs
1
2
4
5
10
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
144
5. DATA PROTECTION AND CYBER SECURITY
Principal risk description
The increasing sophistication and frequency of cyber-attacks,
coupled with data protection laws, highlight the escalating
information security risk facing all businesses. As the Group
operates in the US and UK markets, the regulatory environment
surrounding these areas is considered more complex. Security
breaches and failures in the Group’s IT infrastructure and
networks, or those of third-parties, could compromise sensitive
and confidential information and affect the Group’s reputation.
Theft or loss of Company or client data or potential damage to
any systems from viruses, ransomware or other malware could
result in fines and reputational damage to the business that
could negatively impact on our sales.
How we manage or mitigate the risk
– Significant investment in systems development and security
programmes
– Systems vulnerability and penetration testing is carried out regularly
– The Group’s Data, Cyber and AI Steering Group meets regularly
to review related processes and emerging risks
– Continuous and dynamic training, and enhanced anti-phishing
awareness campaigns are rolled out to all colleagues
– Enhanced multi-factor authentication is enforced across the key
Group entities
– Next generation email security system implemented
– A 24/7 security operations centre is in place
– Reporting capabilities allow all colleagues to promptly report any
suspicious content or activity they encounter
– External maturity assessment framework is used to validate
continuous security improvement programme
Change in risk
No change
Links to strategic
pillars
3
Links to KPIs
1
2
3
6
7
9
10
6. BUSINESS INTERRUPTION
Principal risk description
Adverse weather conditions, travel disruption, natural disasters,
terrorism, acts of war, pandemics or other external events could
adversely affect consumer discretionary spending or cause a
disruption to the Group’s operations. The inability of the Group
to be able to operate showrooms or a significant reduction in
available colleagues to operate the business, such as during a
material pandemic, would significantly impact the operations
of the business. The Group offers flexible delivery options
(home delivery or Click & Collect in showroom) and its online
operations rely on third-party carriers and transportation
providers. The Group’s shipments are subject to various risks,
including labour strikes and adverse weather. The Group may
experience significant theft of products from its showrooms,
distribution centres or during the transportation of goods. Loss
of high-value low-availability pieces could damage our reputation
and our clients may become less inclined to visit our showrooms.
Disruptions to, or failures in, the Group’s IT infrastructure and
networks, or those of third-parties, could disrupt the Group’s
operations, especially during periods of increased reliance on
these systems such as those experienced during the pandemic
lockdowns. The Group relies on IT networks and systems, some
of which are managed by third-parties, to process, encrypt and
transmit electronic information, and to manage or support a
variety of business processes and activities, including sales, supply
chain, merchandise distribution, client invoicing and collection
of payments.
How we manage or mitigate the risk
– The Group has a framework of operational procedures and business
continuity plans that are regularly reviewed, updated and tested
– The multi-channel model allows clients to continue their relationship
with us and to purchase in the event of disruption to any single
channel
– Robust security arrangements are in place across our showroom
network to deter and prevent crime and, in the event of an incident,
protect people and products
– A comprehensive insurance programme is in place to offset the
financial consequences of insured events
– A detailed IT development and security roadmap is in place, aligned
to our strategy
– Reliable and reputable third-party logistic partners have been
engaged to ensure the secure transportation of goods
– The Group has in place action plans to effectively deal with
the impact of a pandemic on business operations
– A Group-wide crisis response programme is in place and
is tested regularly
Change in risk
No change
Links to strategic
pillars
6
Links to KPIs
1
2
3
4
5
6
7
8
9
10
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
STRATEGIC PILLARS
1
Revenue
2
Operating Profit
3
Adjusted EBIT
4
Basic Earnings Per Share
5
Adjusted Earnings Per Share
6
Return on Capital Employed
LINKS TO KPIS
7
Cash Generated from
Operations
8
Average Retail Selling Price
9
Number of Showrooms
10
Colleague Engagement
Survey
11
ESC Carbon Emissions
12
ESG Circularity
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
145
7. REGULATORY AND COMPLIANCE
Principal risk description
Fines, litigation and reputational damage could arise if the Group
fails to comply with legislative or regulatory requirements
including, but not limited to, consumer law, health and safety,
employment law, data protection, anti-bribery and corruption,
competition law, anti-money laundering and supply chain
regulations. As the Group continues its US expansion and trades
in increasing state jurisdictions, there is a risk the business lacks
the detailed knowledge of local US laws and regulations resulting
in a breach, significant fine and reputational impact.
How we manage or mitigate the risk
– The Group actively monitors regulatory developments in the US
and UK as well as reviewing compliance with existing obligations
– Experienced in-house legal team supplemented with external
expertise as needed, including when operating in new jurisdictions
– Clear Group policies and procedures are in place, including, but not
limited to, anti-bribery, corruption and fraud, whistleblowing, data
protection and information security
– Mandatory induction briefings and training for all colleagues on
appropriate regulations and associated compliance
– The established culture and values foster open, honest communication
– Regulatory compliance reviews form part of the rolling Internal
Audit plan
Change in risk
No change
Links to strategic
pillars
6
Links to KPIs
1
2
3
4
5
7
8
9
10
11
12
8. ECONOMIC AND POLITICAL
Principal risk description
The Group’s business is geographically concentrated in the US
and UK. Any significant disruption, sustained stagnation or
deterioration in the luxury watch or jewellery markets or
decline in consumer spending in these markets could have a
material adverse impact on the Group’s business. The Group or
its suppliers may not be able to anticipate, identify and respond
to changing consumer preferences in a timely manner, and the
Group may not manage its inventory in line with client demand.
Established geopolitical trading relationships and structures may
shift resulting in unforeseen barriers to free trade and
movement of goods that significantly impact Group costs and
consumer demand. Ongoing legal, political and economic
uncertainty in the US, UK and international markets could give
rise to significant currency fluctuations, interest rate increases,
adverse taxation arrangements or affect current trading and
supply arrangements.
How we manage or mitigate the risk
– Regular monitoring of economic and political events
– Focus on exceptional client service to attract and retain clients
– Fostering brand loyalty and exclusivity
– The Group updates internal return on investment hurdles and
criteria to reflect changing market environments
– Detailed sales and inventory data is analysed to anticipate future
trends and demand, taking into consideration the current
economic environment
– Regular review of supply chain and sourcing options
– Through continued expansion in the US, the Group is not wholly
dependent on the economic or political environment in one
single territory
Change in risk
Instability in the Middle
East is impacting global
supply chains, energy and
commodity prices and
consumer confidence
across our markets and
those of our suppliers
Links to strategic
pillars
6
Links to KPIs
1
2
3
4
5
6
7
8
9
11
12
9. BRAND AND REPUTATIONAL DAMAGE
Principal risk description
The Watches of Switzerland Group’s trading brands and its
corporate brand are an important asset, and failure to protect
the Group’s reputation and brand could lead to a loss of trust
and confidence. This could result in a decline in the client base,
affect the ability to recruit and retain the best people, and
damage our reputation with our brand partners, suppliers
and investors.
How we manage or mitigate the risk
– The Group has a clear and open culture with a focus on trust
and transparency
– Excellent client experience is a key priority of the Group and
subject to independent scrutiny by our major brand partners
through mystery shopping programmes
– The Group undertakes regular client engagement to understand
and adapt the product, offer and showroom environment
– The use of impactful, digital-led marketing, along with an in-depth
knowledge of products, makes the Group an authority in the
markets in which it operates
– Training and monitoring of adherence by colleagues to Group
policies and procedures
– Ongoing monitoring of social media and digital channels for abuse
of Group copyright and disreputable content
– The Group has conducted a materiality assessment to understand
the priorities and focus areas of its stakeholders, including colleagues,
brand partners and other suppliers, investors and community groups
Change in risk
No change
Links to strategic
pillars
1
2
3
4
5
6
Links to KPIs
1
2
3
4
5
6
7
8
9
10
11
12
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
146
10. FINANCIAL AND TREASURY
Principal risk description
The Group’s ability to meet its financial obligations and
to support the operations and expansion of the business is
dependent on having sufficient funding over the short, medium
and long term. The Group is reliant on the availability of
adequate financing from banks and capital markets to meet
its liquidity needs. The Group’s level of indebtedness could
adversely affect its ability to react to changes in the business and
may limit the commercial and financial flexibility to operate the
business. The Group is exposed to foreign exchange risk and
profits may be adversely impacted by unforeseen movements
in foreign exchange rates. Significantly reduced trading over an
extended period could impact the Group’s ability to operate
within committed credit facilities.
How we manage or mitigate the risk
– The Group had a total of £367.1 million in available committed
facilities at 3 May 2026 with facilities due to expire in May 2028
– The Group’s net cash position and available funding is actively
managed through a Group Treasury policy and cash flow
projections are regularly monitored by management and the Board
– Exchange and interest rates are regularly reviewed to determine
if hedging should be put in place
– A three-year strategic cash flow is prepared and stress-tested,
including the impact on covenant calculations
Change in risk
No change
Links to strategic
pillars
5
Links to KPIs
1
2
3
4
5
6
7
8
9
11
12
11. CLIMATE CHANGE
Principal risk description
The increased frequency of extreme weather events may lead
to the significant disruption of retail showrooms, offices and
distribution centres, through flooding and strong winds. The
supply chain may also be impacted through transporting goods
to showrooms and directly to our clients. In a changing climate,
there is the potential for higher insurance premiums across
business operations, especially those taking place in geographies
particularly impacted by extreme weather events. The
increasing cost of energy and potential regulatory mechanisms
on direct carbon emissions may impact business financials and
profit if the Group cannot transition to a low-carbon business
model. The Group’s reliance on premium raw materials, which
are a finite resource, increases its exposure to resource scarcity,
and the potential increased cost of obtaining these resources in
a challenging and competitive supply chain environment. The
Group may fail to implement its mitigation strategy to reduce its
impact on the climate and manage the risk appropriately, leading
to increased scrutiny from stakeholders and investors, resulting
in reputational damage.
How we manage or mitigate the risk
– The ESG Committee monitors and challenges the Group on
progress against climate-related goals and targets
– Key climate-related risks and opportunities are governed via our
Audit & Risk Committee along with the accuracy of and compliance
with ESG-related disclosures, including TCFD
– To respond to the rapidly evolving ESG agenda, annual training for
Board members is maintained to ensure that they have sufficient
knowledge for effective decision-making
– The Group has a dedicated Head of Sustainability and ESG, who
has significant experience in relation to climate change and its
impact on supply chain and retail markets
– The ESG Steering Group is responsible for assessing and managing
climate-related risks and opportunities against KPIs aligned to our
Sustainability pillars of People, Planet and Product to ensure
operational matters in respect of our ESG Strategy are fully
embedded into our business strategy and operation, including
an underpin to Group bonus arrangements (refer to page 184)
– The Group undergoes numerous external assessments on climate
and sustainability activities
Change in risk
No change
Links to strategic
pillars
1
2
Links to KPIs
1
2
3
6
7
8
9
10
11
12
1
Showroom Investment
2
Pre-Owned
3
Ecommerce
4
Luxury Branded Jewellery
5
Acquisitions
6
Client Experience
STRATEGIC PILLARS
1
Revenue
2
Operating Profit
3
Adjusted EBIT
4
Basic Earnings Per Share
5
Adjusted Earnings Per Share
6
Return on Capital Employed
LINKS TO KPIS
7
Cash Generated from
Operations
8
Average Retail Selling Price
9
Number of Showrooms
10
Colleague Engagement
Survey
11
ESC Carbon Emissions
12
ESG Circularity
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
147
The Directors consider that the Group has, at the time of approving the Group
Consolidated Financial Statements, adequate resources to remain in operation for
the foreseeable future and have therefore continued to adopt the going concern
basis in preparing the consolidated information.
At the balance sheet date, the Group had a total of £367.1 million in available
committed facilities, of which £122.1 million was drawn down. Net debt at this
date was £57.0 million. Liquidity headroom (defined as unrestricted cash plus
undrawn available facilities) was £290.2 million. All bank facilities run
coterminously and are due to expire in May 2028. Further detail with regards
to covenant tests can be found in borrowings note 19 within the Group
Consolidated Financial Statements.
The key covenant tests attached to all Group facilities are a measure of net debt
to EBITDA, and the Fixed Charge Cover Ratio (FCCR) at each April and October.
The facility covenants are on a pre-IFRS 16 basis and exclude share-based
payment costs. Net debt to EBITDA is defined as the ratio of total net debt at
the reporting date to the last 12-month Adjusted EBITDA. This ratio must not
exceed 3. The FCCR is the ratio of Adjusted EBITDA plus rent to the total finance
charge and rent for the 12 months to the reporting date. This ratio must exceed
1.6. At 3 May 2026 the Group comfortably satisfied the covenant tests with net
debt to EBITDA being less than 3 and the FCCR exceeding 1.6.
In assessing whether the going concern basis of accounting is appropriate, the
Directors have reviewed various trading scenarios for the period to 31 October
2027 from the date of this report. These included:
(i) The FY27 base case budget which aligns to Guidance given on page 9, plus
a further six-month period which for the purpose of this test assumes no
additional sales or profit uplift. These included the following key assumptions:
– A continued strong luxury watch and jewellery market in the US and UK
– Revenue forecast supported by expected luxury watch supply
– Impact of all known US tariffs as at the date of this report
– Increased cost base in line with macroeconomic environment, employment
taxes and environmental targets
GOING CONCERN
Under the base case forecast, the Group has significant liquidity and complies
with all covenant tests to 31 October 2027. The forecast reflects current visibility
of supply from key brands and confirmed showroom refurbishments, openings
and closures, and excludes uncommitted capital projects and acquisitions which
would only occur if expected to be incremental to the business.
(ii) Severe but plausible scenarios of:
– 10% reduction in sales against the base case forecast as a result of consumer
confidence, macroeconomic and governmental factors. This scenario did not
include cost mitigations which are given below
– The realisation of material risks detailed within Principal Risks and
Uncertainties on pages 142 to 147 (including regulatory and compliance,
business interruption, and data protection and cyber security), and also
environmental risks highlighted on pages 113 to 121
Under these scenarios the net debt to EBITDA and the FCCR covenants would
be complied with.
(iii) Reverse stress-testing of cash flows during the going concern period was
performed. This determined what level of reduced EBITDA and worst-case
cash flows would result in a breach of the liquidity or covenant tests. The
likelihood of this level of reduced EBITDA is considered remote taking into
account liquidity and covenant headroom, as well as mitigating actions within
management’s control (as noted below) and that this would represent a
significant reduction in sales and margin from prior financial years.
Should trading be worse than the outlined severe but plausible scenarios, the
Group has the following mitigating actions within management’s control:
– Reduction of marketing spend
– Reduction in the level of inventory holding and purchases
– Rationalisation of the business with headcount and showroom operations savings
– Redundancies and pay freezes
– Reducing the level of planned capex
The Directors also considered whether there were any events or conditions
occurring just outside the going concern period that should be considered in their
assessment, including whether the going concern period needed to be extended.
None were noted.
As a result of the above analysis, including potential severe but plausible scenarios
and the reverse stress test, the Board believes that the Group and Company are
able to adequately manage its financing and principal risks, and that the Group and
Company will be able to operate within the level of its facilities and meet the
required covenants for the period to 31 October 2027. For this reason, the Board
considers it appropriate for the Group and Company to adopt the going concern
basis in preparing the Consolidated Financial Statements.
GOING CONCERN AND VIABILITY STATEMENT
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
148
In accordance with UK Corporate Governance Code 2024 (the ‘Code’), the
Directors are required to issue a Viability Statement declaring whether the
Directors believe the Group is able to continue to operate and meet its liabilities
over a period greater than 12 months, taking into account its current position and
principal risks.
ASSESSMENT OF PROSPECTS
The Directors have assessed the prospects of the Group by reference to its
current financial position, its recent and historical financial performance, its
forecasts for future performance, its business model (pages 24 and 25), strategy
(pages 34 to 35) and its principal risks and mitigating factors (pages 142 to 147).
In addition, the Board regularly reviews the financial position of the Group, its
liquidity and financial forecasts.
The base case budget for FY27 aligns to Guidance given on page 9, and the other
two years have prudently assumed no further sales or profit uplift for the
purposes of our viability assessment.
ASSESSMENT PERIOD
The Directors have assessed the prospects of the Group over a three-year
period to April 2029. This period is considered an appropriate timeframe to
assess the Group’s prospects and is consistent with the Group’s business model,
strategic planning period, management incentive schemes and medium-term
financing considerations.
The strategic planning process reviewed by the Board is over a three-year period.
In determining the appropriate assessment period, the Board considered the
uncertainty regarding a number of global economic events, including the level
of inflation and the impact of US tariffs, geopolitical tensions, and a number
of environmental matters.
CURRENT FINANCING
At the balance sheet date, the Group had a total of £367.1 million in available
committed facilities, of which £122.1 million was drawn down. Net debt at this
date was £57.0 million. Liquidity headroom (defined as unrestricted cash plus
undrawn available facilities) was £290.2 million. All bank facilities run
coterminously and are due to expire in May 2028. Further detail with regards
to covenant tests can be found in borrowings note 19 within the Group
Consolidated Financial Statements.
The key covenant tests attached to all Group facilities are a measure of net debt
to EBITDA, and the Fixed Charge Cover Ratio (FCCR) at each April and October.
The facility covenants are on a pre-IFRS 16 basis and exclude share-based
payment costs. Net debt to EBITDA is defined as the ratio of total net debt at the
reporting date to the last 12-month Adjusted EBITDA. This ratio must not exceed
3. The FCCR is the ratio of Adjusted EBITDA plus rent to the total finance charge
and rent for the 12 months to the reporting date. This ratio must exceed 1.6. At
3 May 2026 the Group comfortably satisfied the covenant tests with net debt to
EBITDA being less than 3 and the FCCR exceeding 1.6.
During the three-year viability period, the Group anticipates that it will
comfortably comply with the net debt to EBITDA and FCCR covenants at each
six-month interval.
The Directors have considered the Group’s committed funding arrangements
and associated maturity profile as part of the viability assessment. While certain
facilities fall due for renewal in May 2028 within the viability period, the Directors
have a reasonable expectation that such facilities would be renewed or refinanced
on a timely basis. This expectation is supported by the Group’s strong banking
relationships, historical track record of successful refinancing, and the Group’s
forecast financial performance and credit rating.
VIABILITY STATEMENT
ASSESSMENT OF VIABILITY
During the normal cycle of strategic planning, budgets and forecasts are approved
by the Board at the start of each financial year.
In making the Viability Statement, the Board carried out a robust assessment
of the principal risks and uncertainties facing Group as described on pages 142
to 147. In addition to the uncertainties noted above, the key risks identified that
would have a material impact on the long-term viability of the Group were the
loss of a key supplier and the impact of a potential penalty for statutory breaches.
The scenarios assessed in relation to viability were:
– Severe but plausible scenarios of:
– 10% reduction in sales against the base case forecast. This scenario did not
include cost mitigations which are given below
– The realisation of material risks detailed within the Principal Risks and
Uncertainties on pages 142 to 147 and environmental risks highlighted
on pages 113 to 121
These scenarios would still result in the net debt to EBITDA and the FCCR
covenants all being complied with.
– Reverse stress-testing of this plan to determine what level of reduced EBITDA
and other possible cash outflows would result in a breach of the lending
requirements during the three-year period. This level of reduced EBITDA
and other possible cash outflows is considered to be remote
– The loss of a key supplier to the business. Whilst this scenario would have
a significant adverse impact on the Group, management consider that the
strength of the current supplier relationship combined with the historic
showroom investment and revenue growth achieved means that this scenario
is not plausible, and therefore would not result in a covenant breach during the
viability assessment period
– The severe impact of any statutory non-compliance has been evaluated and
would not result in a breach of the facility covenants
Whilst global economic factors could impact the Group, the long-term strategy
for value creation in the US and UK remains unchanged. The advantages of the
Group’s multi-channel operating model coupled with its scale and technological
expertise should enable the business to outperform the market, take market
share and capitalise on the material growth opportunities in the US.
The financial impact of actions being taken by the Group to achieve its climate
change commitment have been included in future cash flows and stress testing.
CONCLUSION
Based upon this assessment, the Directors confirm that they have a reasonable
expectation that the Group will be able to continue in operation to meet its
liabilities as they fall due over the three-year assessment period.
APPROVAL OF STRATEGIC REPORT
Approved by the Board and signed on its behalf:
BRIAN DUFFY
CHIEF EXECUTIVE OFFICER
13 July 2026
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
149
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
150
152 Corporate Governance at a Glance
154 Chair’s Introduction
156 Board of Directors
158 Corporate Governance Statement
171 Board Performance Review
172 Nomination Committee Report
175 Audit & Risk Committee Report
181 ESG Committee Report
184 Remuneration Committee Report
189 Directors’ Remuneration Report
198 Directors’ Report
CORPORATE
GOVERNANCE REPORT
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
151
CORPORATE GOVERNANCE
AT A GLANCE
2
5
Executive
Directors
Non-Executive
Directors
Culture and Stakeholders
IT, data and cyber
PLC including governance
Strategy
People
Environment incl. health and safety
Transactions – acquisitions
Finance
Internal Audit & Risk
Executive leadership
PLC experience
Luxury retail
International incl. US experience
1
3
3
More than
6 years
Up to 3 years
3-6 years
3
4
Female
Male
Mixed/Multi-ethnic
background
White
1
6
BOARD MEMBERS BY GENDER
BOARD MEMBERS BY ETHNICITY
BALANCE OF THE BOARD
DIRECTOR TENURE
1
BOARD SKILLS MATRIX
CORPORATE GOVERNANCE REPORT
1 As at the date of this report.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
152
BOARD AND COMMITTEE ATTENDANCE
Director
Board Audit & Risk Remuneration Nomination ESG
Held Attended Held Attended Held Attended Held Attended Held Attended
Ian Carter 6 6 n/a n/a 3 3 3 3 3 3
Brian Duffy 6 6 n/a n/a n/a n/a n/a n/a 3 3
Anders Romberg 6 6 n/a n/a n/a n/a n/a n/a n/a n/a
Tea Colaianni MBE 6 6 4 4 3 3 3 3 3 3
Paul Edgecliffe-Johnson
1
1 1 1 1 – – 1 1 1 1
Baroness (Rosa) Monckton MBE 6 6 4 4 3 3 3 3 3 3
Chabi Nouri 6 6 4 4 n/a n/a n/a n/a 3 3
Robert Moorhead
2
4 4 2 2 2 2 1 1 2 2
1 Appointed 19 February 2026
2 Resigned 19 November 2025
MATTERS RESERVED FOR THE BOARD
Below is a summary of the key matters reserved for the Board. The full document can be viewed on the corporate website thewosgroupplc.com
STRATEGY AND MANAGEMENT
FINANCIAL REPORTING, RISK AND CONTROL
STAKEHOLDER ENGAGEMENT
CAPITAL ALLOCATION AND STRUCTURE
CORPORATE GOVERNANCE
PEOPLE AND LEADERSHIP
– Overall leadership of the Group and its subsidiaries
– Annual budgets and business plans
– Establish, promote and articulate the Group’s culture and assess and
monitor how the desired culture has been embedded into the Group
– Extension of the activities into new areas or territories and cessation of
operations of material parts
– Ensure necessary resources, policies and practices are in place to meet
the Group’s objectives and measure performance against them
– Financial results and announcements relating thereto
– Policies and procedures to ensure independence and effectiveness
of internal and external audit functions
– External Auditor appointment or removal
– Establish and maintain an effective risk and internal control framework
– Monitor and review at least annually the Group’s risk management
and internal control systems including financial, operational and
compliance controls
– Approve matters requiring shareholder approval
– Review circulars and significant shareholder communications
– Ensure effective engagement and participation from stakeholders
– Ensure the Annual Report and Accounts describe how stakeholders’
interests and the matters set out in Section 172 of the Companies Act
2006 are considered in Board discussions and decision-making
– Changes relating to the Group’s capital or material corporate structure
– Major capital projects or property leases
– Significant acquisitions or disposals
– Changes to the Group’s management and control structure
– Dividend Policy, dividend payment recommendations and share
buyback decisions
– Delegation of authorities, including the division of responsibilities
between the Chair of the Board and the CEO and Delegated Levels
of Authority
– Policies and practices to ensure consistency with the Company’s
purpose, values and strategy
– Material Group policies and statements and any major changes
– Review of the Group’s overall corporate governance arrangements
– Board and Committee constitutions and Committee Terms of Reference
– Annual Board Performance Review facilitation
– Appointment or removal of Directors and the Company Secretary
– Non-Executive Director fees
– Ensure the Board and its Committees have a combination of skills,
experience and knowledge
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
153
CHAIR’S INTRODUCTION
Welcome to the Corporate Governance Report, which I am pleased to
present on behalf of the Board for the financial year ended 3 May 2026.
This Report, in conjunction with the other Committee reports, provides a clear
and transparent overview of the Board’s oversight, including details of our robust
governance and risk management and our effective engagement with stakeholders
and compliance with the principles and provisions of the UK Corporate
Governance Code 2024 (the ‘Code’).
Strong governance is essential to sustaining our reputation and delivering
long-term sustainable success. This year, we have continued to evolve our
governance framework in line with the Code, with particular focus on culture
and the effectiveness of our material controls.
The luxury watches and jewellery market demands exceptional standards of
integrity, authenticity and client service. These expectations shape not only how
we operate but also how we govern the business. The Board remains committed
to ensuring that our governance practices reflect the business we operate within,
and the responsibilities that come with it.
Throughout the year, the Board and its Committees have been highly engaged
and played a key role in overseeing and shaping the strategic direction of the
Group and supporting management. The Board aims to ensure the business
remains sustainable over the long term and is ready to respond to external factors
which may affect it. With the continuing challenging macroeconomic environment,
the Board has focused on supporting the business to mitigate the ongoing impact
of the economic environment whilst delivering its strategy. The business continues
to be resilient and agile and the Board believes our strategy remains the right one
for its long-term success and that the right team is in place to deliver it. To achieve
this, it is essential for the Board to ensure appropriate governance is in place to act
as a framework for business growth.
CULTURE AND THE BOARD’S RESPONSIBILITIES
The updated Code places greater emphasis on the Board’s responsibility for
overseeing and assessing corporate culture. As such during the year, the Board
has strengthened its oversight of culture through:
– Approving and publishing, on our internal communication platform
CONNECT, our Board Culture Statement which reinforces the values
of our Board and our business
– Enhancing our oversight and monitoring of culture, drawing on insights
from colleague engagement, client satisfaction metrics, mystery shopping
programmes and whistleblowing data
– Embedding cultural alignment in leadership, with the Nomination
Committee ensuring that any senior appointments and succession plans reflect
the behaviours and leadership style required in a luxury retail environment
– Continuing workforce engagement, including visits to a number of
showrooms. We also redefined the way our Designated Non-Executive
Director for Workforce Engagement engages with colleagues across the
business. Further information can be found on page 187.
The Board is satisfied that our culture remains strong and aligned with our
strategic pillars.
IAN CARTER
CHAIR
“The Board recognises the importance
of culture – the tone we set as a Board
shapes Group expectations
and behaviours”
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
154
NEW PROVISION 29 – MATERIAL CONTROLS
Mandatory risk management and internal control framework reporting will start
from FY27. The Board will be required to provide its first declaration of the
effectiveness of the Group’s material controls.
Our control framework has always been of paramount importance as a luxury
retailer – where inventory is high value, supply chains are tightly controlled, and
brand reputation is paramount – maintaining robust and effective material
controls is essential.
During the year, the Board oversaw the development of a structured and
comprehensive programme to document those controls that are material
to managing our risks, including:
– Clear definition of material controls linked to the Group’s Principal Risks
as reported on page 142 to 147
– Formalisation of the internal Provision 29 controls assurance process with
updated documentation, clear ownership and testing methodologies
– Reporting on these material controls, enabling the Audit & Risk Committee
to receive more granular insights into control performance
– Embedding accountability, ensuring all Senior Management, regional leaders
and functional heads understand their responsibilities for maintaining and
reporting on effective controls
– Developing control enhancements where gaps have been identified,
and remediation monitoring in Board and Audit & Risk Committee updates
This remains an area of ongoing focus, and we will continue to refine our
approach to ensure our control environment remains robust, proportionate
and aligned with the expectations of all our stakeholders.
BOARD EFFECTIVENESS AND OVERSIGHT
Beyond culture and material controls, the Board has continued to focus on
long-term value creation. During the year we:
– Completed an internal Board Performance Review, which confirmed strong
Board effectiveness and identified opportunities to further enhance strategic
oversight. Further information can be found on page 171
– Oversaw the continued development of our leadership pipeline
– Strengthened our approach to risk management, including cyber security,
and the protection of client data
COMMITMENT TO STAKEHOLDERS
Our stakeholders – clients, colleagues, brand partners and other suppliers,
and communities – are central to our success, and we take our responsibilities
to them very seriously, continuing to strengthen our understanding of the
Company’s different key stakeholder groups and ensuring their views, whether
complementary or diverging, are understood and embedded into Board
discussions and decision-making. We also consider the impact of the Group’s
activities on the communities within which it operates, the environment and
the Group’s reputation for high standards of business conduct.
Relationships with our key stakeholders are reviewed at each Board meeting
and updates provided of activities undertaken. During FY26, the Board held one
of its meetings in Manchester, which was the perfect opportunity to meet with
our colleagues and a key brand partner. Further information on this visit can be
found on page 163.
Baroness (Rosa) Monckton MBE, continues as our Designated Non-Executive
Director for Workforce Engagement, providing information to the Board on
areas of interest and concern from our colleagues. Rosa’s attendance at the
new Skip-level meetings, both in the US and the UK, ensures the Board remains
increasingly visible amongst our colleagues. After each meeting, Rosa reports back
to the Board on her findings.
Rosa’s feedback, along with Colleague Engagement Surveys, helps ensure our
colleague perspectives are considered by the Board and Committees during their
decision-making processes.
More information on the Board’s decision-making, engaging with stakeholders, as
well as the interests of each of its stakeholders, can be found on pages 76 to 79.
PEOPLE CHANGES
Robert Moorhead resigned from the Board in November 2025. Tea Colaianni
MBE assumed the role of Interim Chair of the Audit & Risk Committee until
a permanent successor was found.
The Nomination Committee undertook a thorough search using an executive
search firm and we were pleased to report the appointment of Paul Edgecliffe-
Johnson in February 2026. Paul brings extensive experience in both the luxury
consumer segment and the US market. Paul’s breadth and wealth of experience
constitutes a valuable addition to the Board. Paul was appointed as the Chair of
the Audit & Risk Committee, effective from 1 March 2026, and has significant
recent and relevant financial experience. Further information on Paul’s experience
can found on page 157 and information on his appointment and induction can be
found in the Nomination Committee Report on page 174.
During the year, the Nomination Committee held a dedicated session on Senior
Management succession and talent mapping in order to strengthen and promote
key positions as appropriate.
Further information on the role of the Nomination Committee and its activities
can be found on pages 172 and 173.
Given the growth of the organisation, in the US, a new role was created,
President North America, and Jack Gaffaney was appointed in January 2026.
This enables the Deputy CEO to focus on Group operations and best practice
alongside mergers and acquisition project work and support the CEO in this role.
Both individuals are flourishing in their new roles and changes made to the
organisation’s structure have proved to be effective.
AGM
I look forward to engaging with you at the forthcoming AGM which is scheduled
to take place on 3 September 2026, commencing at 2.30pm, and will be held at
36 North Row, London W1K 6DH. Full details including the resolutions to be
proposed to our shareholders can be found in the Notice of AGM, which will
be communicated to shareholders and made available on our corporate website
thewosgroupplc.com.
FOCUS FOR FY27
The Board is confident that the Company is well positioned for the future and will
continue to evolve our governance practices in line with regulatory expectations
and the unique demands of the luxury retail sector. Culture, strategy execution
and material controls will remain central pillars of our oversight as we continue
to protect and enhance the reputation of our brand.
On behalf of the Board, I would like to thank our colleagues for their dedication
and professionalism. Their commitment to excellence is the foundation of our
culture and our continued success.
IAN CARTER
CHAIR
13 July 2026
STRATEGIC REPORT FINANCIAL STATEMENTS
155
GOVERNANCE REPORT
EXPERIENCED LEADERS GUIDING
OUR FUTURE
Yes No No
APPOINTED
BRIAN DUFFY
Chief Executive Officer
Executive Director
ANDERS ROMBERG
Chief Financial Officer
Executive Director
12 May 20237 May 20191 November 2020
Ian brings over 30 years of international
and retail experience, having held a
number of senior positions at
consumer-facing and luxury companies.
Ian currently serves as a non-executive
director with Servpro Industries, LLC,
owned by Blackstone, where he is the
Chair of the Audit Committee, and is
Chair of Eataly USA LLC. Ian joined
Hilton International as CEO in London
in 2005, becoming an integral part of
the team that took Hilton Worldwide
private and then public in 2013. Prior to
joining Hilton, Ian served as an Officer
and President of Black & Decker
Corporation. Ian has significant
experience as a non-executive director
having served on a number of boards in
the UK and the US, including Burberry
Group PLC and Chair of the Del Frisco
Restaurant Group Inc., listed in the US.
Brian has served on several boards
across the fashion, retail and sports
sectors and has been the CEO of the
Group since 2014. Brian has previously
served on the boards of several
subsidiaries of Ralph Lauren, as well as
on the board of Celtic PLC. Brian is an
ICAS Chartered Accountant and holds
an Honorary Doctorate from Glasgow
Caledonian University.
Brian is the Chair of The Watches of
Switzerland Group Foundation and
previously the Chair of The King’s
Trust Retail, Leisure and Hospitality
Fundraising Leadership Group,
stepping down in December 2024.
Anders was reappointed to the Board in
2023 as Chief Financial Officer. Anders
was previously the CFO at the Watches
of Switzerland Group from 2014 to
2022, transforming the business globally
and taking the Company from private
to public. Before this, Anders was with
Ralph Lauren serving as Chief Financial
Officer and Chief Operating Officer for
Europe, Middle East and Africa, and
Chief Operating Officer for Asia Pacific.
Anders has previously held senior finance
roles at Gillette and Duracell.
– Nomination
(Chair)
– Remuneration
– ESG
– ESG
Servpro Industries, LLC
Eataly USA LLC
The Watches of Switzerland Group
Foundation
None
COMMITTEE MEMBERSHIP
INDEPENDENT
PRINCIPAL EXTERNAL
APPOINTMENTS
Ian brings to the Board a wealth of
international and retail experience and a
deep understanding of the global luxury
industry. Ian has considerable experience
in the understanding of matters of a
strategic nature and significant
experience as a non-executive director.
Brian brings to the Board significant
retail and international experience,
financial acumen and in-depth
understanding of the global luxury watch
and jewellery sector. Brian’s corporate
experience is relevant to the governance
of a listed company and includes culture
and stakeholder considerations.
Anders brings to the Board extensive
experience at Senior Management level
of accounting and operational matters,
including IT and cyber, and has extensive
experience in the international luxury
retail sector.
RELEVANT SKILLS
AND EXPERIENCE
IAN CARTER
Chair
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
156
BOARD OF DIRECTORS
Yes Yes Yes Yes
TEA COLAIANNI MBE
Senior Independent Director
Non-Executive Director
BARONESS (ROSA)
MONCKTON MBE
Independent Designated
Non-Executive Director for
Workforce Engagement
PAUL EDGECLIFFE-
JOHNSON
Independent Non-Executive
Director
CHABI NOURI
Independent Non-Executive
Director
Tea has more than 30 years’ experience
in international human resource positions,
within consumer-facing industries, and
served as a non-executive director on
multiple boards including DWF Group Plc,
Bounty Brands and Mothercare Plc, and
also as the Chair of the Remuneration
Committees. Tea is currently serving
on the board of SD Worx NV as an
Executive, and has held senior roles
at Merlin Entertainments and Hilton
Hotels Corporation.
Tea is the Founder and Chair of WiHTL –
Diversity in Hospitality, Travel and Leisure
and Diversity in Retail (DiR) and was
awarded an MBE for services to inclusion
across hospitality, travel, leisure and retail
in the 2026 New Year Honours List.
Tea is a qualified lawyer.
Rosa has over 20 years’ experience in
the luxury jewellery and watch sectors.
Rosa’s experience includes setting up
Tiffany & Co in the UK, and serving as
Chief Executive Officer and then Chair
of Asprey & Garrard. Rosa also has
experience in the charity sector, and
campaigns on behalf of disabled children
and adults, through her role as Chair
and Founder of Team Domenica.
Rosa is a member of the House of Lords
having been granted peerage in January
2024 for her work as a charity founder
and advocate for inclusion and equal
opportunity for people with special
educational needs.
Paul was appointed as a Non-Executive
Director and Chair of the Audit & Risk
Committee in February 2026 and is
currently the Chief Financial Officer
of Rentokil Initial plc (Rentokil). Prior
to joining Rentokil, Paul served as Chief
Financial Officer of Flutter Entertainment
plc, which now has its primary listing on
the New York Stock Exchange.
Previously Paul was the Chief Financial
Officer and Group Head of Strategy at
InterContinental Hotels Group plc, and
also an Associate Director in Corporate
Finance at HSBC Holdings plc.
Chabi has over 20 years’ experience in
the luxury jewellery and watch sectors
and was appointed as a Non-Executive
Director in 2022. Chabi has particular
experience in the jewellery sector for
marketing and merchandising, being
responsible for Cartier’s creative and
fine jewellery collections and in watches,
serving as the Chief Marketing Officer of
Piaget, before being appointed as Chief
Executive Officer of the company in
2017. Chabi is currently non-executive
director of Lucid Group, Inc., an
automotive and luxury consumer
goods business listed on the US Stock
Exchange., and a non-executive director
of Gens Aurea SpA. Previously, Chabi
was the Global CEO of Bonhams and
a Private Equity Partner with Mirabaud
Asset Management.
– Audit & Risk
– ESG
– Nomination
– Remuneration
(Chair)
– Audit & Risk
– ESG (Chair)
– Nomination
– Remuneration
– Audit & Risk
(Chair)
– ESG
– Nomination
– Remuneration
– Audit & Risk
– ESG
SD Worx NV
Team Domenica
Rentokil Initial plc Lucid Group, Inc.
Paul brings to the Board over 30 years of
financial and commercial experience in
both the luxury consumer segment and
the US market. Paul’s recent, relevant
and up-to-date financial experience
enables him to carry out his role as Chair
of the Audit & Risk Committee. Paul
brings significant experience as a director
on listed plc boards. Paul is a qualified
chartered accountant and a member of
the Association of Corporate Treasurers.
Chabi brings to the Board significant
international experience of the luxury
watches and jewellery retail industry.
Chabi has relevant experience and
acumen in strategic matters.
Tea brings to the Board a wealth of
experience in HR strategy governance
and consumer-facing industries as well as
extensive DEI expertise. Tea’s significant
experience as a non-executive director,
including extensive and current
experience of all remuneration matters,
enables her to carry out her role as Chair
of the Remuneration Committee.
Rosa brings to the Board significant
experience of the luxury jewellery and
watch industry. Rosa’s environmental,
social and governance (ESG) experience
includes diversity and inclusion initiatives
and a deep understanding of the charity
sector, which enables her to carry out
her role as Chair of the ESG Committee.
19 February 2026 1 May 20227 May 20197 May 2019
STRATEGIC REPORT FINANCIAL STATEMENTS
157
GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT
CONTINUED
This Corporate Governance Statement explains key features of the Group’s
governance structure and how the Group measures itself against the
standards set out in the UK Corporate Governance Code 2024 (the ‘Code’),
as required by the Listing Rules of the Financial Conduct Authority, the
accepted standard of good governance practice in the UK. A copy of the
Code can be found on the Financial Reporting Council’s website at frc.org.uk.
We believe that good governance provides the framework for stronger value
creation and lower risk for shareholders. It is the Board’s responsibility to instil
and maintain a culture of openness, integrity and transparency throughout
the business, through our actions and conduct, policies and communications.
We apply corporate governance guidelines in a way that is relevant and
meaningful to our business and consistent with our culture and values. If we
decide that the interests of the Company and its shareholders can be better
served by doing things in a different way, we will explain the reasons why.
CORPORATE GOVERNANCE STATEMENT
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE 2024
The Board confirms that, throughout the year, and as at the date of this Report,
the Company has complied with the provisions set out in the Code issued by
the FRC in July 2024, except for provisions 24 and 32 during the period from
19 November 2025 to 19 February 2026. We have provided a full explanation
for these below.
The requirements under Provision 29 took effect for the Group from 4 May 2026.
This means the Board will provide its first declaration on the effectiveness of
material controls in our Annual Report and Accounts 2027. The Audit & Risk
Committee has received regular updates on the Company’s readiness for the new
Provision 29, including the internal controls assurance work underway to support
the future declaration. These updates have been conveyed to the Board after
each Audit & Risk Committee meeting. The Company has taken steps to ensure
it is well positioned for these requirements, reflecting the existing internal control
and assurance arrangements that have been previously established to meet its
regulatory obligations.
On 19 November 2025, Robert Moorhead stepped down from his role as Chair
of the Audit & Risk Committee with immediate effect. The Board commenced
a search for his replacement. In the interim period, while a new permanent head
of the Audit & Risk Committee was being appointed, Tea Colaianni MBE, the
Senior Independent Director, chaired the Audit & Risk Committee, having been
a member of this Committee for the last seven years. At all times, Tea worked
closely with the Watches of Switzerland Group’s finance, legal, IT and internal
audit teams, and took advice from external professional firms as required.
Discussions were also held with the External Audit partner.
During this period, one Audit & Risk Committee meeting was held, it was
the Board’s opinion that there were sufficient channels in place to ensure that
the Audit & Risk Committee operated as per its Terms of Reference and was
chaired effectively through appropriate challenge and oversight, albeit that from
19 November 2025 to 19 February 2026 no member had recent and relevant
financial experience as per the Code.
Paul Edgecliffe-Johnson has since been appointed as a Non-Executive Director and
member of the Committee on 19 February 2026 and as Chair of the Audit & Risk
Committee on 1 March 2026, bringing recent and relevant financial experience.
Additionally, during the period from 19 November 2025 to 19 February 2026
the Remuneration Committee operated with three members, as per its Terms
of Reference. However, given the departure of Robert Moorhead the Committee
operated with only two independent directors for the purposes of the Code.
One Remuneration Committee was held during this time. Since Paul Edgecliffe-
Johnson’s appointment on 19 February 2026 the Remuneration Committee has
included three independent non-executive directors.
The information set out in the Corporate Governance Statement (on pages 159
to 197) and the Directors’ Report on pages 198 to 203, including the various
Board Committee Reports (on pages 172 to 197), is intended to provide an
explanation of how the Code’s principles were applied practically throughout
the year.
STATUTORY INFORMATION
Disclosures required by the Disclosure Guidance and Transparency Rules DTR 7.2.6
with regard to share capital are presented in the Directors’ Report on page 200.
Disclosures required by DTR 7.2.8A relating to our Diversity & Inclusion Policy
are presented in the Nomination Committee Report on page 173. Information
concerning diversity, including gender and ethnicity, as required under UK Listing
Rule UKLR 16.3.29R(2) can be found on page 169 and in the Nomination
Committee Report on page 173.
Statutory information Section of report Page
Internal control and risk management Risk Management 138
Securities carrying special rights with regard
to the control of the Company
Directors’ Report 200
Restrictions on voting rights Directors’ Report 200
Appointment and replacement of Directors
and amendments to the Company’s Articles
Directors’ Report 198
Powers of the Company’s Directors relating to
transactions in own shares
Directors’ Report 199
Purpose, values and culture Environmental, Social and
Governance
84
BOARD APPROVAL FOR THE CORPORATE GOVERNANCE STATEMENT 2026
This Corporate Governance Statement is approved by the Board and signed on
behalf of the Board by the Chair and by the Company Secretary.
IAN CARTER LAURA BATTLEY
CHAIR COMPANY SECRETARY
13 July 2026 13 July 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
158
GOVERNANCE FRAMEWORK
The Board facilitates the operation of an open and straight-forward governance framework without complex hierarchy
or over-delegation of responsibilities.
NOMINATION COMMITTEE
Page 172
Ensures the membership and
composition of the Board,
including the combination of skills,
experience and diversity, remains
appropriate.
Regularly reviews the talent
pipeline and succession planning
of Executive Directors and
Senior Management.
KEY STEERING GROUPS, SUB-COMMITTEES AND WORKING GROUPS
Underneath the Leadership Teams, there are a number of key steering groups made up of Senior Management and other colleagues, who are tasked with
delivering key projects or ensuring compliance and the monitoring of risks within important business areas including ESG, data, AI and cyber; regulatory
business, and health & safety. There are also a number of functional working groups which support the Steering Groups. For further information on the ESG
Governance Framework see page 86.
REMUNERATION COMMITTEE
Page 184
Determines the policy for
remuneration, bonuses, long-term
incentive arrangements, contract
terms and other benefits in respect
of the Executive Directors, the
Chair, the Company Secretary and
General Counsel and Senior
Management. Reviews workforce
remuneration, incentive plans and
related policies.
EXECUTIVE DIRECTORS
The Executive Directors are the CEO and the CFO, who are responsible for the day-to-day operational running of the business.
Further information on their respective roles and responsibilities can be found on page 165.
US AND UK SENIOR LEADERSHIP TEAMS
The Company has a UK Senior Leadership Team and a US Leadership Team made up of colleagues within their respective businesses.
The UK Senior Leadership Teams meets at least monthly.
The US Senior Leadership Team meets at least weekly.
TRADING BOARD
The CEO has delegated authority for the day-to-day management of the business to operational management comprising the CFO, the Company Secretary
and General Counsel and members of Senior Leadership Team, in the US and the UK, who have responsibility for their respective functions.
The Trading Board meets weekly and considers key business matters including weekly trading, capital expenditure and business reviews whilst also focusing
on risk management of the business areas, client experience, people matters, strategy preparation and implementation, merchandising and specific areas of
training, such as competition compliance.
SHAREHOLDERS
ESG COMMITTEE
Page 181
Provides oversight on behalf
of the Board in relation to the
Group’s ESG Strategy and
activities, oversees any ESG
strategic goals, targets and
Key Performance Indicators.
AUDIT & RISK COMMITTEE
Page 175
Reviews and reports to the
Board on the Group’s financial
reporting, internal control and
risk management systems and the
independence and effectiveness
of the External Auditor. Reviews
and approves the responsibilities
of the Internal Audit function and
ensures the necessary resources
and access to information are
in place.
BOARD COMMITTEES
BOARD
The Board of Directors
is led by the Chair.
The Terms of Reference for each Committee are documented and approved by the Board. They are reviewed
annually and where necessary updated. They are available on the corporate website thewosgroupplc.com.
The key responsibilities of each Committee are set out below.
The Board is collectively responsible for the long-term success of the Company and the Group. The business of the
Group is managed by the Board who may exercise all the powers of the Company. The Board delegates certain
matters to the Board Committees, and delegates the detailed implementation of matters approved by the Board
and the day-to-day operational aspects of the business to the Executive Directors and other members of Senior
Management. There is a schedule of matters specifically reserved for the Board which is available on the corporate
website thewosgroupplc.com.
Top-down approachBottom-up approach
STRATEGIC REPORT FINANCIAL STATEMENTS
159
GOVERNANCE REPORT
PRINCIPAL AREAS OF BOARD FOCUS
CORPORATE GOVERNANCE REPORT
CONTINUED
BOARD MEETINGS THROUGHOUT THE YEAR
The Board has an annual calendar and agenda. Items
are curated to ensure the Board reviews progress
against financial and non-financial KPIs and progress
on strategic initiatives, whilst regularly considering
all key stakeholders either annually, bi-annually, or
as and when required. The standing agenda items for
each meeting include updates from the CEO, CFO
and business reviews, as well as progress against
strategic initiatives.
The Board receives updates from Committee Chairs
after each Committee meeting.
Other regular presentations include, Investor
Relations, People & Culture, Cyber and Legal and
Regulatory updates and horizon scanning.
The Executive Director HR presented an overview
of how artificial intelligence (AI) is being used across
the organisation, together with a roadmap for further
capability development. AI is being explored across
the Group to drive sales growth and enhance
operational effectiveness, including improved
personalisation, optimisation, and applications within
procurement. The CFO is the executive sponsor for
the Group’s AI strategy and operation and regular
updates will be presented to the Board going forward.
As well as the Group’s principal external advisers,
other external presenters join Board meetings, to
ensure the Board benefits from their perspectives.
MAY 2025
LONDON SUPPORT CENTRE
AREAS OF BOARD FOCUS
– Colleague engagement – update on new
method of engagement going forward
– Hodinkee integration
– Jewellery Strategy
– Board composition, including diversity
demographics skills and tenure
– Board responsibility for culture – UK
Corporate Governance Code 2024
changes
– Cyber security, and awareness and
insurance coverage
– UK business structure and rationalisation
of support and retail functions
KEY APPROVALS
– Trading Update Q4 FY24
– Committee Terms of Reference
– Key corporate investor facing policies
JULY 2025
LONDON SUPPORT CENTRE
AREAS OF BOARD FOCUS
– Reviewed preliminary FY26 Budget
assumptions
– Considered the share buyback
programme impact
– Designated Non-Executive Director for
Workforce Engagement feedback and
future areas of focus
– Board Performance Review FY25,
recommendations and proposed actions
– Diversity Council and Employee Resource
Group
– 12-month post-investment review
of acquisition of Roberto Coin Inc.
KEY APPROVALS
– Preliminary announcement FY25
– Annual Report and Accounts 2025
– AGM Notice of Meeting 2025
– Annual assessment of internal controls
NOVEMBER 2025
VIDEO CONFERENCE (VC)
KEY APPROVALS
– Trading Update Q2 FY26
DECEMBER 2025
KNIGHTSBRIDGE SHOWROOM, LONDON
AREAS OF BOARD FOCUS
– Community activity and key partners
of The Foundation
– 12-month post-investment review of the
acquisition of the Hodinkee business
– People Strategy
– Oversight of the Group’s culture
– Governance review including financial
controls
KEY APPROVALS
– FY26 Half Year Results
– Board Culture Statement
– The Watches of Switzerland Group
Foundation Memorandum of
Understanding
– Key corporate policies
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
160
REGULAR REPORTS
CEO Review which includes:
– Update on trading
– Update on key brand partnerships,
relationships and priorities
– P
rogress on strategy
– C
onsideration and progress of acquisitions
– O
rganisation and People update
– C
ommunities, including The Watches
of Switzerland Group Foundation
– Other topics presented:
– Economic, macroeconomic and
geopolitical backdrop
– H
odinkee initiatives
– R
oberto Coin Inc.
– L
ab-grown diamonds
– U
S ecommerce
CFO Review which includes:
– Financial and non-financial KPIs
– Investor Relations updates including share
price and market feedback
– C
apex approvals
– A
nnual acquisition and major project
reviews
US Review
– Trading performance and initiatives
UK Reviews
– Trading performance and initiatives
Key legal and regulatory updates and
horizon scanning
Key corporate policies
– Board Diversity & Inclusion
– Whistleblowing
– Human Rights
– Anti-Money Laundering
– Group Health & Safety Statement
– Share Dealing Code
– Anti-Bribery, Corruption and Fraud
– Code of Ethics
– Environmental
– Anti-Trust and Competition
– Data Protection and Information Security
– Anti-Facilitation of Tax Evasion Policy
Copies of all external policies can be
found on the website thewosgroup.com
OCTOBER 2025
MANCHESTER SHOWROOMS
AREAS OF BOARD FOCUS
– Deutsch & Deutsch acquisition, key terms
and structure
– E
xternal advisors appointment
– C
ompanies House new verification
procedures
– Change in role for the Deputy CEO
KEY APPROVALS
– Modern Slavery Statement 2025
– Key corporate investor facing policies
JANUARY 2026
SUPPORT CENTRES, LONDON, CARLTON PARK,
LEICESTER & VC
AREAS OF BOARD FOCUS
– Discussion of Holiday Season trading
– Notification of appointment of new
President North America
KEY APPROVALS
– Acquisition of a majority stake in
Deutsch & Deutsch business
FEBRUARY 2026
SUPPORT CENTRE, LONDON
AREAS OF BOARD FOCUS
– Separate strategy session
– DEI network highlights
– 24-month post-investment review of
acquisition of 15 Ernest Jones showrooms
– I
nvestor Relations – insight from corporate
brokers
– Corporate training including effective
governance and current themes by
external law firm
– Risk management and risk appetite
KEY APPROVALS
– Appointment of Paul Edgecliffe-Johnson
as Non-Executive Director and Chair of
the Audit & Risk Committee
– Trading Update Q3 FY26
– UK showroom capital expenditure
– Tax Str ateg y
– Key corporate policies
SEPTEMBER 2025
LONDON SUPPORT CENTRE
AREAS OF BOARD FOCUS
– Annual General Meeting
– Group’s insurance programme renewal
– Investor Relations update by brokers
– Marketing strategy update, including
social media
– I
ntroduction of culture dashboard
– B
oard format, agenda and papers
following Board Performance Review
feedback
– K
ey brand partner meetings in the US
– U
pdate by UK President on UK meetings
with key brand partners
KEY APPROVALS
– Budget FY26
– Trading Update Q1 FY25
– Non-Executive Director fee increase
– Levels of Group insurance cover and
policies including Directors and Officers
Liability Insurance
– Key corporate investor facing policies
STRATEGIC REPORT FINANCIAL STATEMENTS
161
GOVERNANCE REPORT
CORPORATE GOVERNANCE REPORT
CONTINUED
GOVERNANCE IN ACTION
DEUTSCH & DEUTSCH ACQUISITION – JANUARY 2026
The Watches of Switzerland Group’s priorities include growing revenue, profit
and return on capital employed (ROCE).
The Board considers the views of all of its stakeholders when reviewing the
acquisition opportunities that it believes will contribute towards achieving
its strategy.
During FY26, the Board considered and approved the acquisition four
showrooms located in Texas, trading under the name of Deutsch & Deutsch.
The assets and liabilities of the showrooms were purchased. The previous
owners will continue to play a key role in leading these showrooms. The
showrooms increase the Group’s existing presence in Texas and will continue
to trade under the Deutsch & Deutsch name, reflecting the local strength of
the brand as it approaches its centenary.
Acquisitions are a key pillar of the Group’s growth strategy and capital allocation
framework. The addition of the Deutsch & Deutsch showrooms is expected to
deliver attractive financial returns, in line with the Group’s successful track record
of previous showroom acquisitions.
The acquisition of Deutsch & Deutsch will contribute to the Group’s growth
through expanding the business’s geographical scope and particularly its brand
partner distribution network leading to increased shareholder returns and
delivering profitable sales growth. This value-accretive acquisition will be an
excellent complement to the existing US showroom network, strengthening
a leading position in the luxury watch and jewellery market in the US and
introducing further access to other luxury watch and jewellery brands sold
by the Watches of Switzerland Group.
The Board received regular updates on the acquisition, from initial discussions
through to signing and completion. The Board considered the location of the
showrooms and that they are expansionary to the Group’s existing presence
in Texas. The Board discussed the benefits, challenges and integration, including
lessons learnt from previous acquisitions.
Following acquisition, the Board continues to receive updates from management
on the integration of the business and colleagues into the Group.
In FY27, the Board will receive a full financial review, integration and ‘lessons learnt’
update from Senior Management as part of the annual review of the acquisition.
In considering the transaction, the Board identified and assessed the impact on all
of its key stakeholders as part of its decision-making process, including:
– Investors: business growth, increasing revenue and profits in the US luxury
watch and jewellery markets. Rigorous commercial and financial evaluation
to analyse return on investment
– Colleagues: experience, diversifying our talent pool further as a result
of colleague transfers and integration, acquiring expertise
– Brand partners and other suppliers: strengthening brand partner relationships
and further expanding brand partner presence
– Clients: expanding our client base and choice, with exposure to new
geographies and demographics
– Communities: expanding our community reach with Group activities
and continuing local engagement
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
162
GOVERNANCE IN ACTION
BOARD VISIT MANCHESTER – OCTOBER 2025
Engagement with stakeholders is a critical part of the role of a director. Moreover
this is a requirement of, and set out in, Section 172 of the Companies Act. The
Board considers the views of its stakeholders as part of its decision-making process.
See page 76 for further information.
To ensure the Board is able to consider stakeholder views effectively and make
decisions that support the long-term interests of the Company, it is essential the
Directors maintain a deep understanding of the organisation’s operations, its
stakeholder groups and their key priorities. Previous Board Performance Reviews
have highlighted the importance of Non-Executive Directors continuing to enhance
and broaden their knowledge of the business – particularly in relation to product
offerings and the Group’s key brand partners. Strengthening this understanding
enables the Board to provide more informed oversight, contribute to strategic
discussions, and uphold the highest standards of governance.
A summary of our stakeholders and why they are important to the business can
be found on page 76.
Manchester is home to a number of Watches of Switzerland Group showrooms,
including Watches of Switzerland, Goldsmiths, Mappin & Webb, and mono-brand
boutiques, as well as a state-of-the-art, purpose-built national service centre,
designed to support the Group’s network of luxury watch showrooms and
after-sales care services across the UK. The Group also has a joint venture
partnership with Audemars Piguet to operate the AP House Manchester.
A visit to Manchester enabled the Board to engage directly with colleagues across
a wide range of business functions, as well as with clients and a brand partner.
Throughout the visit, Board members met with senior leaders and colleagues in
both formal and informal settings. These opportunities for meaningful interaction
are invaluable, as engaging with colleagues and understanding their perspectives
is of paramount importance to the Board. Such dialogue strengthens the Board’s
insight into the day-to-day business, supports informed decision-making, and
reinforces its commitment to fostering an inclusive and collaborative
organisational culture.
Repairs and Service Centre
The Manchester Service Centre has been purpose-built with a spacious
workshop that offers a comfortable, high-end working environment. The
Centre houses cutting-edge equipment and a team of expert watchmakers and
specialists. The Group already employs more accredited watchmakers than any
other UK retailer and is proud to be a brand accredited agent for leading Swiss
horology houses, including Rolex, OMEGA, Breitling and Cartier. For
generations, clients have trusted the Group’s specialists to care for their
timepieces – a tradition that the new Service Centre proudly continues.
With circularity gaining momentum across the watch industry, the Group
is a leading advocate in this area within this growing line of business.
This visit marked the Board’s first trip to the Service Centre, together, providing
Non-Executive Directors with a valuable opportunity to see first hand the
elevation and strategic importance of this part of the business. They were able
to gain insight into the product, learn about the certification process, and
develop a deeper understanding of modern day complications.
Service and Repairs is a key component of the Group’s operations, and the visit
played an important role in enhancing the knowledge and understanding of the
Non-Executive Directors in this specialist area.
Showroom Visits
The Board visited Goldsmiths, located in the Trafford Centre, including the
Hublot boutique and Cartier espace, Breitling and TAG Heuer mono-brand
boutiques, also in the Trafford Centre, Watches of Switzerland, and Mappin &
Webb. Importantly, the Board also visited the recently opened Mappin & Webb
Luxury Jewellery boutique located in Manchester’s historic centre, a space
dedicated exclusively to the world’s leading luxury jewellery brands. This
showroom represents a significant milestone in advancing the Group’s strategic
ambition to expand its luxury jewellery presence across key regional locations
in the UK. During the visit, the Board saw first hand the best-in-class client
experience, Xenia, delivered within this elevated retail environment.
Brand Partnership
The Board also visited the AP House, opened in May 2025 as a joint venture
with our long-standing brand partner, Audemars Piguet. During the visit, Board
members met with the Audemars Piguet Managing Director for the UK,
providing an opportunity for a constructive discussion on the strength of the
partnership, the brand’s strategic direction, and future opportunities for
collaborative growth.
STRATEGIC REPORT FINANCIAL STATEMENTS
163
GOVERNANCE REPORT
Q
What have you enjoyed most about your role?
A
The purpose of having a colleague representative in the boardroom is to
bridge the gap and ensure the workforce’s view is brought to the boardroom
and, ideally, contribute to discussions on wider issues.
I really enjoy meeting people and this role involves engaging with colleagues to
understand their perspectives and to deliver insightful, regular dialogue on the
issues they believe the Group is facing and how these may affect them. This might
relate to culture, brands, communication, training or recognition.
I think it is important to make it clear that colleagues’ voices, concerns, and praise
will be taken back to the Board for consideration. Everybody wants a voice and
it’s not just about being heard, it’s about actually being listened to, that’s very
different. I also think it helps colleagues understand that they are all part of the
jigsaw, where each piece plays a very important part.
Q
How has the Board reacted to your Workforce Representative role?
A
The Board is really invested in this role continuing to be a success and eager
to hear feedback from my meetings.
Q
What colleague events have stood out for you over the past 12 months?
A
There are a few, but I think the event that stood out for me was attending
the graduation of the UK six-month core leadership programme. Listening to
colleagues standing up and talking about the impact this course has had on them,
both professionally and personally, was extraordinary and profoundly moving.
The colleagues that spoke were really articulate and hugely grateful to have been
included on this programme.
I also particularly enjoyed attending the US and UK Christmas Town Halls, before
the anticipated trading rush. They showed management rallying and encouraging
the troops – both in retail and support. There was a true sense of camaraderie
and belonging.
Q
What are you hoping for in FY27?
A
I am looking forward to seeing the further development of the colleague
recognition programme and hearing about the colleague conference, held in June
2026, which will play a huge role in aligning colleagues behind the People Strategy.
I also hope to be able to spend more time visiting showrooms and support
centres, meeting more colleagues and hearing their views.
BARONESS (ROSA)
MONCKTON MBE
COLLEAGUES ENGAGEMENT
The Watches of Switzerland Group has chosen to appoint a Non-Executive
Director to represent colleagues in the Boardroom.
Rosa was appointed to this role of Designated Non-Executive Director for
Workforce Engagement, not only due to her familiarity with the business, having
been a Director of the business since 2014 – before the Company was listed –
but also due to her interest in people and community matters. Rosa is dedicated
to providing Board-level oversight of culture and engagement in action.
Rosa is passionate about communities and is the Founder of Team Domenica,
which is a charity and Specialist Further Education College that supports people
with learning disabilities and autism to unlock the skills and experiences they
need to thrive in the workplace, and beyond.
Rosa attends a number of colleague engagement events within the Group
enabling her to meet colleagues in formal and informal settings. Previously, this
included Listening Forums, chaired by the respective Regional Presidents, and
attended by members of Senior Management. As the Group and culture has
continued to develop, colleague interaction has been reevaluated and, in line
with the new Group Communications Strategy, this now consists of Skip-level
meetings, which operate with no predetermined questions, and where levels
of management are skipped so that Rosa hears directly from colleagues. Other
events include Town Halls and informal meetings during showroom and repair
service centre visits.
Other colleague engagement opportunities during the year included:
– Board meeting held in the Knightsbridge showroom – where the Board
informally met colleagues who were located in this showroom during the day
– Manchester Board meeting – a two-day trip to Manchester where the Board
visited a number of locations. Further information can be found on page 163.
GOVERNANCE IN ACTION
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
164
CORPORATE GOVERNANCE REPORT
CONTINUED
KEY ROLES AND RESPONSIBILITIES
There is a clear division of responsibilities between the Chair and the CEO, which is set out in writing and has been agreed by the Board. This can be found on our
corporate website at thewosgroupplc.com.
The Board biographies are included on pages 156 and 157.
Chair – Responsible for the operation, leadership and governance of the Board
– Sets the Board agenda and ensures sufficient time is allocated to ensure effective debate to support sound decision-making
– Ensures the Board is fully informed of all matters and receives precise, timely and clear information sufficient to make
informed judgements
– Ensures each Non-Executive Director makes an effective contribution to the Board
– Leads the annual Board Performance Review
– Meets with the Non-Executive Directors independently of the Executive Directors
Chief Executive Officer – Management of the day-to-day operations of the Group
– Develops the Group’s strategic objectives for consideration and approval by the Board
– Implements the strategy approved by the Board
– Leads the Trading Board and Senior Management
– Manages the Company and the Group
– Ensures effective and ongoing communication with investors
Chief Financial Officer – Manages all aspects of the Group’s financial affairs
– Works with the CEO to develop and implement the Group’s strategic objectives
– Delivers the financial performance of the Group
– Ensures the Group remains appropriately funded to pursue its strategic objectives
– Ensures proper financial controls and risk management of the Group and compliance with associated regulation
– Ensures effective and ongoing communication with investors
Senior Independent Director – Acts as a ‘sounding board’ for the Chair and serves as an intermediary for other members of the Board where necessary
– Leads the Non-Executive Directors in their annual assessment of the Chair’s performance
– Available to investors if they have concerns which the normal channels through the Chair, CEO or other Directors have failed
to resolve
Non-Executive Directors – Are all independent, experienced and influential individuals from a diverse range of industries, backgrounds and countries
– Provide constructive contribution and challenge to the Executive Directors regarding the development of the strategy
– Scrutinise the operational and financial performance of Senior Management
– Monitor the integrity of financial information, financial controls and systems of risk management
– Devote such time as is necessary to the proper performance of their duties
Designated Non-Executive
Director for Workforce
Engagement
– Gauges the views of colleagues and identifies any areas of concern
– Ensures the views and concerns of the workforce are taken into account by the Board, particularly when they are making
decisions that could affect colleagues
– Ensures the Board takes appropriate steps to evaluate the impact of proposals and developments on colleagues and considers
what steps should be taken to mitigate any adverse impact
Company Secretary and
General Counsel
– Supports the Board and its Committees with their responsibilities and ensures information is made available to Board
members in a timely fashion
– Supports the Chair in setting Board agendas, designing and delivering Board inductions and Board Performance Reviews, and
co-ordinates post-evaluation action plans
– Advises on legal regulatory compliance and corporate governance matters
– Ensures compliance with the Board’s procedures and with applicable rules and regulations
– Communicates with investors and organises the AGM
DIVISION OF RESPONSIBILITIES
STRATEGIC REPORT FINANCIAL STATEMENTS
165
GOVERNANCE REPORT
Recognising the importance of its stakeholders, and as a mechanism to improve
their understanding, the Board held one of its meetings in Manchester, home to a
number of the Company’s showrooms and locations including a key brand partner.
One scheduled meeting was also held in our Knightsbridge, London showroom.
Further information on the Board’s visit to Manchester can be found on page 163.
The Chair maintains regular dialogue with each of the Non-Executive Directors,
either individually or as a group. Two formal meetings with the Non-Executive
Directors took place during the year.
BOARD SKILLS AND EXPERIENCE
It is essential to have an appropriate mix of skills, experience, diversity and
independence on the Board. Such diverse attributes enable the Board, as a whole,
to provide informed opinions and advice on strategy and relevant topics, thereby
discharging its duty of oversight. Appointments to the Board are made following
consideration of the experience and expertise of existing Directors, any required
skill sets or competencies, and the strategic requirements of the Company.
The principles of the Code are embodied in both the Board and the Nomination
Committee’s approach to Board performance and succession planning. During the
year, the Board refreshed its skills survey, the results of which were considered by
the Nomination Committee during its continuous process of evaluating the skills
and experience it believes are required on the Board. The results of the survey
will be continually assessed and taken into consideration by the Chair, during
discussions on succession planning.
INFORMATION AND SUPPORT
The Board discharges its responsibilities through an annual programme of Board
meetings. Papers and presentations are given to the Board (and Committees) to
focus its oversight on key areas of the business, including trading, cash flows,
financial and non-financial key performance indicators and financing.
This information helps to facilitate effective decision-making and input, and aids
the Board’s oversight and awareness of business performance or routine good
governance practices operated by the Company. A selection of principal decisions
taken by the Board can be found on pages 162 and 163. The Board considers how
the interests of relevant stakeholders are set out in summary on pages 76 to 79.
The Board also receives daily market updates, which contain details of the share
price and investor relations publications, as appropriate.
Full and timely access to all relevant information is given to the Board in advance
of meetings. For Board meetings, this consists of a formal agenda, minutes of
previous meetings, a matters arising schedule with details of progress made and
a comprehensive set of papers including regular operational and financial reports.
Where ad hoc meetings are required, outside of the scheduled meetings, the
Board is sent documents in advance, for consideration and approval.
All Directors have the right to have their opposition to, or concerns over, any
Board decision noted in the minutes. Directors are entitled to take independent
professional advice at the Company’s expense in the furtherance of their duties,
where considered necessary.
All Directors have access to the advice and services of the Company Secretary
and General Counsel.
BOARD LEADERSHIP AND COMPANY PURPOSE
THE ROLE OF THE BOARD
The Board provides leadership to the Group and is collectively responsible
for promoting its long-term success and for delivering sustainable value to
all stakeholders.
The Board ensures there is a robust system of internal control and risk
management in place (including financial, operational and compliance controls)
and ensures the overall effectiveness and maintenance of those systems.
The Board is supported by a number of Committees, to which it has delegated
certain powers. The role of these Committees, their respective memberships,
responsibilities and activities, during the year, are detailed on pages 172 to 197.
Some decisions are sufficiently material or important to the Group’s business that
they can only be made by the Board. There is a Schedule of Matters Reserved for
the Board (‘Reserved Matters’), which contains items reserved for the Board to
approve, relating to strategy and management, material contracts, financial
reporting and controls, internal controls and risk management, Board membership
and succession planning, corporate governance, structure and capital, and delegation
of authority. In addition to the Reserved Matters, each Board Committee has
written Terms of Reference defining its respective role and responsibilities. The
Reserved Matters and the various Committees’ Terms of Reference are reviewed
annually, updated as appropriate and approved by the Board.
The Reserved Matters and the Terms of Reference of each Board Committee can
be found on our corporate website, thewosgroupplc.com. Further details regarding
the role and activities of the Board can be found on page 160 and 161.
To support with stakeholder considerations and engagement, the Board receives
updates on its roles and responsibilities, including its duties under the Companies
Act 2006 and, in particular, is equipped to consider S172(1) of the Companies Act
2006 when decision-making for the Group.
Group policies and processes have been drafted with these duties in mind and to
ensure that there is a culture of stakeholder engagement throughout the Group.
The Company’s purpose and values can be found on page 84. Information on how
the Board aims to monitor culture within the organisation, and how it has been
embedded, can be found on page 167.
The Company Secretary and General Counsel ensures that as the Board makes
decisions, the impact on any of the stakeholder groups is considered.
BOARD AND COMMITTEE MEETING ATTENDANCE
In addition to the six scheduled Board meetings, the Board held additional
meetings to review the Trading Updates released to the market during the financial
year and delegate to the Disclosure Committee for the final approval. A number
of ad hoc meetings were also held to cover approvals which arose outside of the
scheduled meetings. Additionally, a comprehensive Board strategy session was
held, where the Board considered key strategic initiatives and plans for each core
business area. Senior Management representing various functions across the
Group presented, in person, matters which are considered to be strategically
important to the Group going forward.
The table on page 153 indicates the number of scheduled Board and Committee
meetings, and attendance, during the financial year.
CORPORATE GOVERNANCE REPORT
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
166
PURPOSE, VALUES AND CULTURE
The 2024 Code has introduced enhanced provisions relating to the Board’s
oversight of culture, and the Board has increased its levels of assurance from
management either internally or externally, to ensure the desired culture is
effectively embedded within the organisation.
As set out in the Code, the Board is responsible for establishing the Company’s
purpose, values and strategy and ensuring itself that these and its culture are
aligned. The Board assesses and monitors culture and how the desired culture
has been embedded into the business. The Board seeks to ensure that business
practices, policies and behaviours are aligned and embedded within the
Company’s purpose, values and culture.
During the year, the Executive Director HR updated the Board on the People
Strategy, and how it was being embedded into the organisation. As part of the update,
the Board considered culture, and the aim to further develop a high performing
culture environment which would support the long-term success of the Company.
The Board recognises the importance of ensuring a positive and supportive culture
throughout the Group, which it believes can lead to organisational resilience and
superior performance. Culture is monitored through direct and indirect colleague
engagement activities such as internal engagement surveys and discussions with the
Executive Directors, the Executive Director HR, the Designated Non-Executive
Director for Workforce Engagement and other members of Senior Management.
For further information see Colleague Engagement on page 91.
During the year, the Board demonstrated ethical leadership and setting expected
behaviours – tone from the top – with the publication of a new Board Culture
Statement, communicated to all colleagues accompanied by a message from the
Chair and available on the external corporate website. This Statement clearly sets
out the cultural expectations for the entire organisation.
Additionally, the Board:
– Considered people updates, including colleague turnover, engagement and attrition
– Dedicated time for culture, people and workforce matters, including the
inclusion of a Culture Dashboard at each Board meeting
– Monitored the levels and nature of whistleblowing reports through the Audit &
Risk Committee and through the Culture Dashboard
– Ensured the Company strategy and business model demonstrate good culture and
responsibilities and contributes to wider society through its policies such as Anti-Tax
Facilitation, and donations to The Watches of Switzerland Group Foundation
– Received updates from the Audit & Risk Committee, who receive regular
reports from the Director of Internal Audit & Risk, on fraud and compliance
breaches and the levels and nature of whistleblowing reports
– Engaged with colleagues directly during showroom visits and other site locations
– Reviewed the Group’s key colleague behaviour policies, such as the Code of
Ethics, Anti-Bribery, Corruption and Fraud and HR initiatives
– Considered updates on the activities of the Diversity Council and the Employee
Resource Groups
The Board is satisfied that culture policy, practices and behaviour throughout the
Group are aligned with the Company’s purpose, values and strategy.
During FY26, Baroness (Rosa) Monckton MBE Designated Non-Executive Director
for Workforce Engagement, in conjunction with our new Communication Strategy
held Skip-level meetings, for the US and the UK, in which Rosa met colleagues to
discuss their work experience, without Senior Management being present.
Topics included culture, leadership, recognition and feedback. Equally colleagues
had the opportunity to ask questions to Rosa from an outside-in perspective and
there were no predetermined questions. Afterwards Rosa provided detailed
feedback to the Board.
Rosa also attended the graduation of the UK Leadership Development
programme and all of the UK Town Hall meetings, presented by the UK President,
to keep up to date with day-to-day news and business updates.
The Board takes responsibility for all the Group policies which are applicable
to our colleagues, and further information can be found on page 188.
STAKEHOLDER ENGAGEMENT
Our Section 172(1) Statement includes details on how the Board has had
regard to the need to foster the Company’s business relationships and includes
a Statement of Engagement with colleagues. More information about the Board’s
engagement with its colleagues, clients, brand partners and other suppliers,
communities and investors can be found on pages 76 to 79.
Understanding the views of the Company’s stakeholders is a key priority for the
Board and the business as a whole. We understand businesses can only grow and
prosper responsibly over the long term if we understand and respect the views
and needs of our stakeholders including colleagues, clients and the communities
in which we operate, as well as our brand partners and other suppliers and
investors, all of whom we are accountable to.
As part of the Board Strategy Session in February 2026, the Board considered
stakeholder mapping. This enables the Board to build relationships, engage in
proactive and constructive dialogue, and to deliver on what is important to our
key stakeholders. To that end, engagement with all of our stakeholders plays
a vital role in delivering our Group strategy. This review helped to focus the
Company’s resources, engagement and reporting activities by addressing issues
that matter most to the Group’s businesses and to the Company’s wider
stakeholders. Fostering strong business relationships is an intrinsic part of the
Company’s long established and successful compounding strategy and a key
consideration in all decision-making.
During the year, the Company reviewed the results of its current materiality
assessment. A materiality assessment helps an organisation identify which
environmental, social, and governance issues matter most to both the business
and its stakeholders, so it can focus its sustainability strategy and reporting on
the topics with the greatest impact, strengthening stakeholder trust.
Further details on the key stakeholders identified can be found on page 76.
See page 77 for further information on the colleague engagement activities
and resulting actions.
ENGAGING WITH INVESTORS
We welcome the opportunity to engage with our investors. The Chair has
overall responsibility for ensuring the Company has appropriate channels of
communication with all of its investors. Engagements include various investor
meetings attended, as appropriate, by the Chair, CEO, CFO, and the former
Group Finance and Investor Relations Director. A summary of key meetings
and communications with investors is provided at each Board meeting.
For FY27, there will be a dedicated Investor Relations Director supporting the
Chair and the Executive Directors.
The Group undertook a structured programme of engagement, including post
results roadshows, investor meetings and sector conferences, and additionally
we are in frequent contact with investors through a scheduled programme of
communications and engagements. During the year, and before the 2025 AGM,
the Chair of the Remuneration Committee engaged with a number of our key
investors to provide details of the new Remuneration Policy which was put to
shareholders at the 2025 AGM.
STRATEGIC REPORT FINANCIAL STATEMENTS
167
GOVERNANCE REPORT
The Group also ensures that it communicates the information that investors
require, using traditional methods such as the Annual Report and Accounts,
Trading Updates, RNS newswires, corporate press releases and in-person
meetings. The Company’s corporate brokers provided regular feedback to the
Board and attended two meetings. During the year, the Company changed its
corporate brokers in order to refresh our investor engagement programme.
Further information can be found on the Shareholder Information page 266.
The Board organises and directs the Group’s affairs in a way that it believes will
help the Group succeed for the benefit of its members as a whole, whilst having
regard to each of its stakeholders. The Board seeks to ensure that it acts fairly
between all members and considers both institutional investors and private
shareholders when making decisions that impact them.
Information and feedback is provided to the Board at each meeting and on the
views of investors following individual meetings, relating to the following:
– Share price performance, share price sentiment and macroeconomic conditions
– Particular elements of the Group’s strategy and operations; progress on specific
projects, financial performance, product development and risks
– ESG issues that affect our stakeholders, such as the environment, climate change,
working conditions and relationships with brand partners and other suppliers
– Governance issues, particularly on remuneration, but also succession planning,
Board diversity and expertise and independence
– Capital allocation plans, including investment priorities and share buyback activity
– Progress with the Group’s long-term strategy and the execution of key strategic
initiatives
– Acquisitions and integration updates of acquired businesses
– Feedback related to the AGM, including views raised by proxy advisers and
major shareholders
– General investor sentiment and market expectations, as observed through
roadshows and conference participation
The Chair and Senior Independent Director are available to major shareholders for
governance-related discussions. Shareholder feedback continues to inform the Board’s
discussions on strategy, sustainability priorities, capital allocation and governance.
COMPOSITION, SUCCESSION AND EVALUATION
COMPOSITION AND INDEPENDENCE
The Code recommends that at least half of the Board, excluding the Chair, should
comprise Non-Executive Directors determined by the Board to be independent.
At the end of the year, excluding the Chair, the Board consists of six members,
of which four members are determined by the Board to be independent
Non-Executive Directors, and is supported by the Company Secretary and
General Counsel.
The composition of the Audit & Risk Committee, Nomination Committee
and Remuneration Committee comply in all respects with the independence
provisions of the Code.
The Board is also supported by an ESG Committee, the majority of members
of which are independent Non-Executive Directors.
Biographical details of the Directors of the Company are set out on pages 156
and 157.
DIVERSITY, EQUITY AND INCLUSION
The Company is committed to having a Board comprising directors from
different backgrounds, with diverse and relevant experience, perspectives, skills
and knowledge. During the year, the Board conducted a review of the skills and
experience of the individual Directors, where Directors rate their experience and
expertise. The Board and Nomination Committee use the skills review to identify
areas to focus upon when considering succession planning for the Board, and to
identify topics for the ongoing training and development of the Board.
We believe the Board can only adequately represent all of its stakeholder groups
if collectively it has the skills, experience and background to reflect them. We
believe diversity contributes towards a high performing and effective Board, and
this is considered in all recruitment and succession planning discussions. We fully
support the aims, objectives and recommendations outlined by the FTSE Women
Leaders Review (WLR) and the Parker Review.
The Company is pleased to report that as at 3 May 2026, the Board met the
targets set out in the FTSE WLR and the Parker Review, and has also met the
targets set out in the UK Listing Rules 9.8.6.
We are fully committed to providing opportunities for all to promoting an
inclusive culture and diverse workforce.
Further information on the Company’s commitments can be found in the
Nomination Committee Report on page 173.
All Board appointments are based on merit, and candidates are considered
against objective criteria and with due regard for the benefits of diversity on the
Board. As well as experience and track record, appointments will be made taking
due account of other criteria, such as curiosity, insights, engagement, cultural
contribution, personal identity and the differentiation that they could bring to
the collective make-up of the Board.
In May 2026, the Nomination Committee reviewed the Board Diversity &
Inclusion Policy which was approved by the Board in May 2026 and can be found
on our corporate website, thewosgroupplc.com.
We are fully committed to building an inclusive culture and workforce, and our
Diversity and Inclusion Strategy continues to support this aim. We believe that
by treating our colleagues with respect and trust, supported by our Company
purpose and values, we will build a more diverse, fair, inclusive Group, which will
underpin our strategy and management decisions, actions and behaviours. It is
essential that the Company continues to hold itself accountable and that we have
set ourselves clear goals to help us realise our ambitions.
The Company collects both gender and ethnicity data direct from the Board
members and executive management annually on a self-identifying basis in a
questionnaire. The data is used for statistical reporting purposes and is provided
with consent. Board members and Executive Management are asked to identify
their gender and ethnicity as set out in the table opposite.
SUCCESSION PLANNING
The Nomination Committee continually reviews succession plans for Executive
Directors and Non-Executive Directors. Further information on our approach
to succession planning and Board appointments can be found in the Nomination
Committee Report on page 172 and 173.
Additionally, the Board annually reviews the bench strength and skill set of Senior
Management, taking into consideration the growth strategy of the business and
the need to ensure we maintain the right levels of talent to support the future
growth of the business.
CORPORATE GOVERNANCE REPORT
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
168
ELECTION AND RE-ELECTION OF DIRECTORS
In accordance with the Code, the Board has determined all Directors will stand
for election or re-election at each AGM. The Chair has confirmed the Directors
standing for election or re-election at this year’s AGM continue to perform
effectively and they demonstrate commitment to their roles. This can be seen
by the attendance record set out on page 153. The reasons why the Board
considers each Director’s contribution is, and continues to be, important to the
Company’s long-term sustainable success are set out in the Directors’ biographies
on pages 156 and 157.
FY26 BOARD PERFORMANCE REVIEW
The purpose of the Board Performance Review is to conduct a comprehensive
review of how the Board operates, as measured against current best practice and
in accordance with the Code and associated guidance.
It is the Board’s policy to conduct a Board Performance Review exercise on an
annual basis. In line with the Code, the Board’s policy is to conduct an externally
facilitated review at least once every three years.
Further information on the FY26 Board Performance Review can be found
on page 171.
The Senior Independent Director conducted a performance review of the Chair.
Board and Senior Management diversity
The following tables set out the information required under the UK Listing Rule 9.8.6R(10) as at 3 May 2026. The information included supports the statements made
in the Nomination Committee Report which can be found on page 173.
For the purposes of the table below, Executive Management is defined in the UK Listing Rules. In the absence of an executive committee, the Watches of Switzerland
Group has defined Executive Management as the CEO and his direct reports, as per the UK Listing Rules definition and guidance.
Gender on a self-identifying basis
Number of
Board members
Percentage
of the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number of members
of Executive
Management
Percentage of
Executive
Management
Men 4 57.1% 3 5 62.5%
Women 3 42.9% 1 3 37.5%
Not specified/prefer not to say – – – – –
Ethnicity on a self-identifying basis
Number of
Board members
Percentage
of the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number of members
of Executive
Management
Percentage of
Executive
Management
White British or other White (including minority-white groups) 6 85.7% 4 7 87.5%
Mixed/Multiple Ethnic Groups 1 14.3% – 1 12. 5%
Asian/Asian British – – – – –
Black/African/Caribbean/Black British – – – – –
Other ethnic group – – – – –
Not specified/prefer not to say – – – – –
CONFLICTS OF INTEREST
Each of the Directors has a statutory duty under the Companies Act 2006 to
avoid conflicts of interest with the Company and to disclose the nature and extent
of any such interest to the Board. Under the Articles, the Board may authorise any
matter which would otherwise involve a director breaching this duty to avoid
conflicts of interest and may attach to any such authorisation such conditions
and/or restrictions on participation at relevant Board meetings. The Chair, acting
reasonably, has the power to determine whether a matter is a conflict matter.
Directors are required to give notice of any potential situational and/or
transactional conflicts, which are then considered by the Board and, if deemed
appropriate, authorised accordingly. A Director is not however, permitted to
participate in such considerations or to vote in relation to their own conflicts.
Following the last review, the Board concluded that any potential conflicts have
been appropriately authorised, that no circumstances existed which would
necessitate that any prior authorisation be revoked or amended and that the
authorisation process continued to operate effectively.
EXTERNAL DIRECTORSHIPS
Any external appointments or other significant time commitments of the
Directors require the approval by the Chair in practice.
The Board is comfortable that external appointments of the Chair and the
Directors do not impact on the time that any Director devotes to the Company
and there are no overboarding concerns for any of the Directors.
FY22
External
performance
review
Review cycle
FY23
Internal
performance
review
FY24
Internal
performance
review
FY25
External
performance
review
FY26
Internal
performance
review
STRATEGIC REPORT FINANCIAL STATEMENTS
169
GOVERNANCE REPORT
TRAINING AND INDUCTION
The Directors are provided with annual refresher training on their duties and
responsibilities as directors of a publicly listed company and governance and
regulatory trends or updates. A comprehensive induction programme was put
in place for Paul Edgecliffe-Johnson following his appointment, which included
a separate session on governance and directors’ duties. See page 174 for
information on the induction process.
Training needs are also monitored as part of the Board Performance Review.
A number of areas for development or further understanding were presented
to the Board during the year, these included: effective governance; key relevant
recent legal rulings; shareholder activism landscape and key themes; directors’
duties and UK Market Abuse Regulations update; use of AI in the workplace;
corporate governance; Provision 29 Material Controls reporting and changes
to Companies House processes and procedures, including director verification.
The Board is committed to the development of Directors to improve their
knowledge of the business and the regulatory environment in which it operates.
The Company Secretary and General Counsel is responsible for helping the Chair
identify and organise sessions to further enhance knowledge for the Directors,
which would be tailored to individual needs.
The Board acknowledges its responsibility for establishing and maintaining the
Group’s system of risk management and internal controls, and it receives regular
reports from management identifying, evaluating and managing the risks within
the business. The system of internal controls is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and can provide only
reasonable, and not absolute, assurance against material misstatement or loss.
REMUNER ATION
The Remuneration Committee is chaired by Tea Colaianni MBE and is made up
of Independent Non-Executive Directors and the Chair. Prior to her appointment
as Chair of the Committee, Tea had served on a Remuneration Committee for
a significant period of time, longer than the required 12 months.
The Committee has defined Terms of Reference which include assisting the Board
in discharging its responsibilities with respect to:
– Determining the policy for Executive Director remuneration and setting
remuneration for the Chair of the Board, Executive Directors and Senior
Management
– Reviewing workforce remuneration and related policies
During the year, Robert Moorhead resigned as a member of the Remuneration
Committee in November 2025. Paul Edgecliffe-Johnson was appointed as a
member of the Remuneration Committee in February 2026. During this period
the Remuneration Committee comprised two independent non-executive
Directors only. Further information regarding compliance with the UK Corporate
Governance Code 2024 in relation to the Remuneration Committee is provided
on page 158.
Refer to page 184 and 185 for further details on the work of the
Remuneration Committee.
AUDIT, RISK MANAGEMENT AND INTERNAL CONTROL
The Audit & Risk Committee is chaired by Paul Edgecliffe-Johnson, who was
appointed in February 2026. During the year, Robert Moorhead resigned as
Chair of the Audit & Risk Committee and Tea Colaianni MBE acted as Interim
Chair before Paul’s appointment. Further information on the UK Corporate
Governance Code 2024 compliance regarding the Audit & Risk Committee
can be found on page 158.
The Audit & Risk Committee is comprised entirely of Independent Non-
Executive Directors.
Paul is the Chief Financial Officer of Rentokil Group plc and has recent, relevant and
up-to-date financial experience. The Committee has defined Terms of Reference
which include assisting the Board in discharging its responsibilities with respect to:
– Establishing formal and transparent policies and procedures to agree the
independence and effectiveness of internal and external audit functions and
satisfy itself on the integrity of financial and narrative statements
– Establishing and reviewing procedures to ensure the Annual Report and
Accounts present a fair, balanced and understandable assessment of the Group’s
position and prospects
– Establishing procedures to manage risk, oversee the internal control framework
and determine the nature and extent of the principal risks the Group is willing
to take in pursuance of its long-term strategic objectives
Refer to pages 175 and 176 for detail on the work of the Audit & Risk Committee.
The Board is collectively responsible for determining the nature and extent of the
principal risks it is willing to take in achieving its strategic objectives. The processes
in place for assessment, management and monitoring of risks are described in the
Risk Management section on pages 138 to 141.
The Board acknowledges its responsibility for establishing and maintaining the
Group’s system of risk management and internal controls, and receives regular
reports from management identifying, evaluating and managing the risks within
the business. The system of internal controls is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and can provide only
reasonable, and not absolute, assurance against material misstatement or loss.
The Board, assisted by the Audit & Risk Committee, has carried out a review of
the effectiveness of the system of risk management and internal controls during
FY26 and for the period up to the date of approval of the Consolidated Financial
Statements contained in the Annual Report and Accounts.
All relevant members of Senior Management completed an annual ‘control
certificate’, to confirm the effectiveness of internal control within their respective
area. The ‘control certificate’ asked for the disclosure of any known control
failures, instances of non-compliance with legislation or regulatory requirements,
instances of identified fraud or serious control breakdown, or any other relevant
matters they are aware of, that may need to be considered by the Board.
In conclusion, based on the work performed, the Board is satisfied with the adequacy
of the Group control framework and the Board confirms that no significant
weaknesses or failings were identified as a result of the review of effectiveness.
CORPORATE GOVERNANCE REPORT
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
170
FY25 EXTERNAL BOARD PERFORMANCE REVIEW
Towards the end of FY25, the Chair, alongside the Company Secretary and
General Counsel, agreed the proposed approach for an external Board
Performance Review with the Nomination Committee. Three expert external
facilitators provided proposals for review and meetings were held with the Chair.
The Company engaged Independent Audit Limited (IAL), who had carried out the
previous external review in FY22. IAL is independent and does not provide any
other services to the Group, and there are no connections between IAL and
individual Directors to be disclosed.
A Board Performance Review questionnaire was completed to gain an insight
of key levels of focus into how well the Board is performing prior to carrying
out tailored one to one interviews with all Board members and the Company
Secretary and General Counsel. The review also included the President of UK
and the Deputy CEO (who was at the time also the President North America).
IAL reviewed historic Board and Committee papers.
IAL sought views on a range of topics including the effectiveness of Board
composition and culture, the relationships between the Board and executive
team, implementation and oversight of the strategic objectives and progress
against the agreed areas of focus following the FY24 review.
The review concluded the Board was operating effectively with a number
of strengths, including; being led by a strong Chair with immense industry
knowledge; a long-standing CEO who holds the confidence of the Board; a
Board which is made up of strong Non-Executive Directors, who bring relevant
experience; high-quality company secretarial support; and Committees which are
functioning well and led by strong Chairs. The Board therefore concluded that it
is operating effectively.
Whilst the evaluation concluded that the Board and its Committees were
effective and operated efficiently, and with good engagement, some areas still
required development. A number of recommendations were agreed and, under
the supervision of the Nomination Committee, an action plan was put in place
covering the priorities opposite.
Key priorities identified from
FY25 Review Progress made during FY26 on identified priorities
Further enhance the Board’s
oversight of culture
Demonstrated ethical leadership and setting
expected behaviours – tone from the top – with
the publication of a new Board Culture
Statement
Dedicated time at Board meetings for culture,
people and workforce matters, including the
inclusion of a Culture Dashboard at each meeting
Ensured the Company strategy and business model
demonstrated good culture and responsibilities
DNED engagement with Skip-level meetings
Strategic initiatives (and less
operational matters) to be
given greater discussion and
less presentation
Time was spent with Senior Management on the
structure and content of Board papers
Ensuring agendas address matters that are key
to the business and make sure those areas are
discussed, recognising flexibility as priorities change
Ensuring more consistent use of executive
summaries, with clear positioning
Ensuring a balance of focus of the US business
as the territory grows in size and complexity
Continued development and
focus on Jewellery Strategy
and the long-term view
Board visit to the Mappin & Webb Luxury
Jewellery boutique, Manchester, learning and
engaging first hand in the new showroom
jewellery concept
Regular updates on jewellery initiatives and
performance including the introduction of
lab-grown diamonds
Ongoing focus on the wider
Executive team succession
Regular updates at the Nomination Committee
Presentation from the Executive Director HR
BOARD PERFORMANCE REVIEW
FY26 INTERNAL BOARD PERFORMANCE REVIEW
Following recommendations made by the UK Corporate Governance Code 2024
the Company refers to the annual evaluation as a ‘Board Performance Review’.
This is in line with the current process where the annual board evaluation
considers board succession, skills and composition.
Following last year’s externally facilitated review, undertaken by IAL, the Board
conducted an internal review of its effectiveness led by the Chair and supported
by the Company Secretary and General Counsel. The purpose of the exercise
was to conduct a comprehensive evaluation of how the Board and its
Committees operate, as measured against current best practice corporate
governance principles and associated guidance. The process involved a
questionnaire and where necessary follow-up discussions with Board members.
The Deputy CEO and the President UK were also interviewed allowing them
to consider areas where improvements could be made.
Separately the Senior Independent Director conducted a performance review
of the Chair.
Views were sought on a range of topics including the effectiveness of Board
composition and culture, the relationships between the Board and executive
team, identification of horizon scanning and training needs, key governance
priorities and implementation and oversight of the strategic objectives.
The review again concluded the Board and Committees are operating effectively
and are well chaired.
The following areas were identified for further development:
– Increased oversight of strategic analysis and reporting on strategic outcomes,
initiatives and decisions
– Greater oversight of culture and stakeholder engagement
– Governance oversight and control environment for the US business and new
business integration
– Additional horizon scanning and development on key new areas within the
regulatory, legal and technology environment
– Continued Executive and Non-Executive succession planning – ensuring the
Board composition and skills mix remains appropriate
STRATEGIC REPORT FINANCIAL STATEMENTS
171
GOVERNANCE REPORT
NOMINATION COMMITTEE REPORT
DEAR STAKEHOLDER
I am pleased to report the Nomination Committee (the ‘Committee’)
remains compliant with the UK Corporate Governance Code 2024 (the
‘Code’). The majority of members of the Committee are independent
Non-Executive Directors.
The Company Secretary and General Counsel acts as Secretary to the
Committee, Chabi Nouri attends all of the Committee meetings, and by
invitation, the CEO, the Executive Director HR, and/or external advisers
also attend.
ROLE
The role of the Committee is to keep the composition and structure of the Board
and its Committees under review. It is responsible for leading the process for
Board appointments and nominating candidates for appointment as Directors to
the Board having regard to the Board’s structure, size and composition (including
the skills, knowledge, experience, diversity and independence of its members)
ensuring that the Board and its Committees are effective in discharging their
responsibilities. The Committee is tasked with ensuring succession plans are in
place for the Board and Senior Management, taking into consideration the current
Board composition, the leadership requirements of the Group and the wider
commercial and market environment within which the Group operates.
During the year, there were no disagreements between the Committee and
the Board.
TERMS OF REFERENCE
The responsibilities of the Committee are set out in its Terms of Reference, which
reflect the current regulatory requirements and best practice appropriate to the
Group’s size, nature and stage of development. The Terms of Reference were
reviewed during the year, and minor stylistic changes were made.
The Terms of Reference can be found in full at thewosgroupplc.com.
The Committee’s Terms of Reference require that the Committee meets at least
twice a year. During the year, the Committee met five times.
SUCCESSION
During FY26, the Committee continued to focus on succession planning in order
to ensure there is an effective Board and experienced leadership in place to
support the delivery of the Group’s strategy.
Succession planning is the process of identifying the critical positions within
our organisation and developing action plans and pipelines to fill them, thereby
minimising the risk to the business of key roles being vacant. The Committee
continues to ensure that succession planning for Executive Directors, Non-
Executive Directors and Senior Management as well as business-critical roles
is proactively reviewed.
The Committee will ensure a proper assessment as to the values and behaviours
expected on the Board as part of the recruitment process. The Committee
understands that a culture of inclusion and diversity is cultivated through clear
tone from the top and as such takes into account a variety of factors before
recommending any new appointment to the Board, including diverse mixture of
skills, professional and industry backgrounds, geographical experience and expertise,
gender, tenure, ethnicity, cultural and social backgrounds, and diversity of thought.
MEMBERS
Ian Carter (Chair)
Tea Colaianni MBE
Baroness (Rosa) Monckton MBE
Paul Edgecliffe-Johnson
KEY RESPONSIBILITIES
– Review the structure, size and composition of the Board and
its Committees
– Consider succession planning for the Board and other Senior
Management taking into account the challenges and opportunities
facing the Company, and the skills, diversity and expertise needed
– Review the leadership needs of the organisation
– Remain fully informed about strategic issues and commercial changes
affecting the Company and the market in which it operates
– Identify and nominate potential Board candidates
– Evaluate the combination of skills, knowledge, experience, diversity
and independence on the Board
– Review the results of the Board Performance Review process
and manage any recommendations
– Support people initiatives that promote a culture of inclusion
KEY ACTIVITIES DURING THE YEAR
– Conducted a review of Executive Directors and Senior Management
succession planning and talent development
– Conducted a review of Non-Executive Director succession planning
– Considered the Board composition, including the skills, diversity,
tenure and expertise as well as the backgrounds of each of the Board
members, when reviewing the future needs of the Board
– Recommended to the Board the appointment of Paul Edgecliffe-Johnson
as Chair of the Audit & Risk Committee and Non-Executive Director
– Reviewed the FY25 Board Performance Review and agreed the
resulting Action Plan
– Reviewed the Committee’s Terms of Reference and recommended
them to the Board for approval
– Reviewed and recommended to the Board, the updated Board
Diversity & Inclusion Policy
– Agreed, with the Board, the process for the FY26 internal Board
Performance Review
IAN CARTER
Chair of the Nomination
Committee
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
172
Following the resignation of Robert Moorhead in November 2025, the
Committee oversaw the search for, and appointment of, a new Chair of the Audit
& Risk Committee and Non-Executive Director.
Paul Edgecliffe-Johnson was subsequently appointed in February 2026. Paul brings
extensive experience in both the luxury consumer segment and the US market,
and his breadth and wealth of experience with publicly listed companies will
constitute a valuable addition. Paul also has recent, relevant and financial
experience and was appointed to the Board on 19 February 2026 and as Chair
to the Audit & Risk committee, effective 1 March 2026. More details on Paul’s
appointment can be found on page 174.
As part of succession planning, more broadly, the Committee reviewed talent,
and considered succession, for Executive Directors and Senior Management.
The Executive Director HR tabled a comprehensive presentation which
assessed the performance and potential of the Senior Leadership Teams,
including the Trading Board members, the next level of management, and
successor development plans taking into consideration the future growth strategy
of the business. The Committee considered the current skills, experience and
tenure of the Directors and Senior Management, and assessed future needs
against the Group’s strategic objectives.
Following a review of the strength of the US leadership team and structure,
it was determined that there was a need for the standalone role of President,
North America. During the year, the Committee was regularly updated on the
search and recruitment for the new President, North America. An appointment
was made in January 2026, and following a lengthy and comprehensive handover,
David Hurley, the Deputy CEO relinquished his operational role within the US
from 1 April 2026 whilst maintaining responsibility for the Roberto Coin Inc.
and Hodinkee businesses.
DIVERSITY
The Company is fully committed to providing opportunities for all to promote
an inclusive culture and diverse workforce. We believe that our culture should
promote meritocracy, integrity and openness, value diversity and be responsive
to the views of all our stakeholders. Ensuring a culture of fairness and equity
underpins all management decisions, actions and behaviours.
The Committee recognises the importance of diversity and inclusion and equal
opportunity both in the boardroom, and throughout the organisation, and
understands that a diverse Board will offer wider perspectives which lead to
better decision-making, enabling the Board to meet its responsibilities.
Information on Board appointments and the criteria considered can be found
within the Board Diversity & Inclusion Policy, which was reviewed in May 2026
and recommended to the Board for approval. The Policy can be found on the
corporate website thewosgroupplc.com.
Reporting under the Listing Rule 9.8.6 can be found within the Corporate
Governance Report on page 169. The Board has chosen to align its diversity
reporting reference date with the Company’s financial year end and proposes to
maintain this alignment for future reporting periods. As required under LR 9.8.6
R(10), further details in respect of the three targets as at 3 May 2026 are disclosed
in the tables on page 169.
Further information on Company initiatives on diversity and inclusion, including
implementation and progress, can be found on page 192.
EFFECTIVENESS AND COMPOSITION
The FY26 Board Performance Review was conducted by way of an internal
review where Directors completed a comprehensive questionnaire. Following
the completion of the questionnaire, where requested, and to provide more
information, the Company Secretary and General Counsel, on behalf of the Chair
of the Board, followed up with a short telephone call. Interviews also took place
with the Deputy CEO and President UK, who attend each Board meeting.
Separately the Senior Independent Director conducted a review of the Chair
and provided feedback to the Board.
Further details of key observations and also progress from the FY25 Board
Performance Review and the process for FY26 can be found on page 171.
Composition, including diversity, was included as part of the review process, to
ensure the Committee is discharging its duty effectively and to manage succession
issues. The performance of all of the Committees was considered as part of the
Board Performance Review process. The Committee keeps the composition of
the Board and its Committees under continual review, to ensure that they have a
suitable balance of skills and experience to oversee and challenge the delivery of
the Group’s strategy, and to discharge the Committee’s responsibilities effectively.
It was confirmed that the Committee operates effectively and took account
of the longer-term needs of the business in its approach to Board succession
planning and recruitment during the year.
The Committee will be responsible for overseeing an action plan to be put in
place following recommendations from the FY26 Board Performance Review.
At the same time, ‘skills data’ was collected and converted into a skills matrix
to help identify the Board’s experience, and as part of general Board planning,
gender and ethnicity data for Board members was captured, the details of which
can be found on page 152.
RE-ELECTION OF DIRECTORS
The effectiveness and commitment of each of the Non-Executive Directors is
reviewed by the Committee annually. The Committee has satisfied itself as to
the individual skills, relevant experience, contributions and time commitment of all
the Non-Executive Directors, taking into account their other offices and interests
held. As detailed on page 199, the Board is recommending the election or
re-election to office of all Directors at our 2026 AGM.
I will be available at the AGM to answer any questions on the work of the Committee.
IAN CARTER
CHAIR OF THE NOMINATION COMMITTEE
13 July 2026
STRATEGIC REPORT FINANCIAL STATEMENTS
173
GOVERNANCE REPORT
INDUCTION OF PAUL EDGECLIFFE-JOHNSON
Following appointment, Paul undertook a tailored and comprehensive induction
and familiarisation of the business. The programme included meeting with Senior
Management, colleagues, and a thorough handover from the Interim Chair of the
Audit & Risk Committee.
Timeline Induction Process
Meeting with key
stakeholders within
the business
– Comprehensive briefing with the Company
Secretary and General Counsel on director duties,
governance standards and regulatory responsibilities
– Director of Internal Audit & Risk to review the
current Internal Audit plan and ways of working
– Members of the finance team to gain an
understanding of the finance systems
– Executive Directors, Trading Board and members
of Senior Management teams in the US and UK
Gaining an
understanding of the
business, including
colleagues, product
and brand partner
relationships
– Visited the Support Centre in Leicester
– Visited a number of showrooms
– Informal interactions with colleagues
Engaging with external
advisors to gain
industry insights into
the business
– Briefing from corporate lawyers
– Session with the corporate brokers
– Session with the Company’s Public Relations
consultant
– Sessions with the Company’s External Auditor
Understanding recent
Board and Committee
meetings
considerations
– Being provided with access to minutes and matters
arising from Board and Committee meetings
– Reviewing the FY25 externally facilitated Board
Performance Review and resulting action plan
– Reviewing the FY26 Budget and presentations from
the strategy session held in 2025
– Reviewing the Company’s key policies and procedures
NON-EXECUTIVE DIRECTOR APPOINTMENT
The timeline below sets out the key stages of the process that culminated in the
Nomination Committee recommending the appointment of Paul Edgecliffe-Johnson
to the Board. The selection process was undertaken in accordance with the Board’s
Diversity & Inclusion Policy, having regard to the skills and experience of existing
Board members and the career paths candidates have followed, including sector
and functional experience.
Timeline Appointment process
Stage 1
Building the Brief
The Committee agreed the attributes and skills required. These
focused on strong experience in relation to risk and audit, public
limited companies, luxury, the US, the characteristics of a
successful NED and the ability to build effective, trusting
relationships with the other Directors.
Stage 2
Candidate Search
The Committee appointed an executive search firm, The MBS
Group (MBS), to assist with the appointment process. MBS is a
leading B Corp-certified executive search and leadership advisory
firm working across all consumer-facing industries. MBS provided
a diverse list of candidates with interviews conducted initially by
the Interim chair of the Audit & Risk Committee and Senior
Independent Director and the Chair. A shortlist was then selected
for interviews with Committee members, the CEO and CFO.
The Committee confirms that the MBS Group has no connection
to the Company and has not carried out any other work for the
Company in the last two years.
The MBS Group is a valued strategic partner to WiHTL & Diversity
in Retail, the collaboration community founded by Tea Colaianni
MBE, a Non-Executive Director of the Company, to advance
inclusion across the hospitality, travel, leisure and retail sectors.
Stage 3
Review, assessment and interviews
The shortlisted candidates were interviewed by a number
of Committee members as well as the CEO and CFO, and
a preferred candidate was selected.
Stage 4
Recommendation
The Committee made its recommendation to the Board
to appoint Paul Edgecliffe-Johnson.
Stage 5
Induction
Induction programme was organised by the Company Secretary
and General Counsel and Chair of the Board.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
174
NON-EXECUTIVE DIRECTOR APPOINTMENT
AUDIT & RISK COMMITTEE REPORT
DEAR STAKEHOLDER
I was appointed as Chair of the Committee in March 2026 and so this is
my first report of the Committee as Committee Chair. Robert Moorhead
stepped down from the Board and the Committee in November 2025
and I would like to extend my thanks to Tea Colaianni MBE for acting as
Interim Chair of the Committee and her diligence in handing over to me.
The Committee plays a key role in developing the Group’s governance
framework. Its activities included reviewing and monitoring the integrity
of financial information, the Group’s system of internal controls and risk
management, Internal and External Audit processes and processes for compliance
with laws, regulations and ethical codes of practice. In addition, we work with
other Committees and the Board to ensure that stakeholder interests are
protected and support the delivery of the Group’s strategy. The Committee also
worked alongside the ESG Committee having regard to ESG risk management
and TCFD reporting.
During the year, the Committee has had a significant focus on management’s
initiatives to define, structure and monitor material controls and supporting the
Board’s preparation to discharge future obligations under Provision 29 of the UK
Corporate Governance Code 2024 (the ‘Code’). Specifically, the Committee
received regular updates on the internal control environment from the Director
of Internal Audit and Risk as well as updates on work undertaken in relation to
Provision 29.
COMMITTEE COMPOSITION
All members of the Committee are deemed Independent Non-Executive
Directors. The Board considers that I have recent and relevant financial
experience (as required by the Code) and the Committee has competence
relevant to the sector in which the Group operates. As noted on page 158,
there was a three-month period between November 2025 and February 2026
where the Committee membership did not include recent and relevant financial
experience as required by the Code. This was resolved by my appointment and
mitigated during the period through access to our independent Internal Audit
team and other professional expertise as required. Details of the Audit & Risk
Committee members’ experience can be found on pages 156 and 157. The
Committee’s range of financial and commercial skills and experience serves to
provide the necessary knowledge and ability to work as an effective committee
and to robustly challenge the Executive Directors and members of Senior
Management as and when appropriate. At the invitation of the Committee,
the Chair of the Board, the CEO, the CFO, the Director of Internal Audit & Risk,
Senior Management and the External Auditor attend meetings. The Committee
has regular private meetings with the External Auditors and the Director of
Internal Audit & Risk during the year. The Company Secretary and General
Counsel acts as Secretary to the Committee.
TERMS OF REFERENCE
The Terms of Reference of the Committee reflect the current statutory
requirements and best practice appropriate to the Group’s size, nature and stage
of development. The Committee met its requirement to meet at least four times
a year. Details of meeting attendance can be found on page 153. The Committee
reviews its Terms of Reference annually, recommending changes to the Board.
Changes were made this year in response to requirements in relation to material
controls under Provision 29 of the Code. These changes will ensure the Group
remains aligned to the current Code guidance.
COMMITTEE EFFECTIVENESS
During FY26, an internal Board Performance Review was undertaken. The Report
concluded that the Committees were thought to be operating effectively and are
well chaired. Details of how the Board Performance Review was conducted can
be found on page 171.
MEMBERS
Paul Edgecliffe-Johnson (Chair)
Tea Colaianni MBE
Baroness (Rosa) Monckton MBE
Chabi Nouri
KEY RESPONSIBILITIES
Financial reporting:
– Monitor the integrity of the Financial Statements of the Group and
Company
– Review the appropriateness and consistency of significant accounting
policies
– Review and report to the Board on significant financial issues
and judgements
– Review the appropriateness of Task Force on Climate-Related
Financial Disclosures (TCFD)
Internal control and risk management:
– Carry out a robust assessment of the Group’s emerging and principal
risks on an annual basis, including environmental risks and opportunities
– Review the Group’s internal control and risk management systems
– Monitor and review the effectiveness of the Group’s Internal Audit
function
– Assess the effectiveness of whistleblowing arrangements
External audit:
– Review the effectiveness of the External Audit process
– Develop and implement policies on the engagement of the External
Auditor to supply non-audit services and consider the impact they
have on independence
– Review and monitor the External Auditor’s independence
and objectivity
– Conduct any external audit tender process and make
recommendations to the Board about the appointment,
reappointment and removal of the External Auditor
– Approve the remuneration and terms of engagement of the External
Auditor
– Ensure the External Auditor has full access to Group colleagues
and records
– Invite challenge by the External Auditor, giving due consideration
to the points raised
Other:
– Engaging with shareholders on the scope of the external audit,
where appropriate
PAUL EDGECLIFFE-JOHNSON
Chair of the Audit &
Risk Committee
STRATEGIC REPORT FINANCIAL STATEMENTS
175
GOVERNANCE REPORT
ACTIVITIES UNDERTAKEN BY THE AUDIT & RISK COMMITTEE
Financial reporting:
– Monitored the integrity of the Group’s FY26 year end Results Announcement,
Annual Report and Accounts, and the FY26 half year review
– Assessed and recommended to the Board that the Annual Report and
Accounts are fair, balanced and understandable, including Alternative
Performance Measures (APMs)
– Assessed the Going Concern and Viability Statement having reviewed
supporting papers from management including the consideration of changing
global trading conditions, inflationary impacts on the Group’s cost base and
climate change on those assessments
– Considered papers from management on the key financial reporting judgements
and estimates
– Reviewed the TCFD FY26 year-end reporting, including the scenario analysis
undertaken to assess the impact of climate-related risks
Internal control and risk management:
– Considered the adequacy and effectiveness of the Group’s ongoing risk
management systems and control processes, including environmental risks
and opportunities
– Considered the Group’s risk environment, including its significant and emerging
principal risks and uncertainties, and reviewed the mitigating actions that
management has taken, along with determining the risk appetite of the business
– Considered the organisational design, structure, resources and capabilities to
manage risk with particular focus on legal, regulatory and cyber security risks
– Reviewed the Group’s approach to identification and assessment of its material
controls over principal risks in response to reporting changes required under
Provision 29 of the Code
– Considered the results of a review of the Group’s exposures to, and controls
over, supplier income, US commercial and financial management structures and
assurance activity
– Received deep dive presentations on key risk areas including cyber security, data
governance including the approval of a Data Protection and Information Security
Statement, health and safety, business interruption insurance cover and
insurance policy enhancements
– Reviewed and approved the Group’s Whistleblowing Policy and received and
reviewed whistleblowing incidents, investigation details and follow-up actions
– Considered updates in relation to anti-bribery and corruption and anti-money
laundering programmes. The Committee recommended to the Board for
approval the Anti-Bribery, Corruption & Fraud Policy which includes the gifts
and hospitality protocols and the Anti-Money Laundering Policy
– Considered the Group’s systems and framework of controls designed to detect
and report fraud including actions in response to the UK Economic Crime and
Transparency Act including the Failure to Prevent Fraud Legislation
– Approved the Group Tax Strategy, received management reports on the tax
affairs of the Group and recommended to the Board for approval the Anti-
Facilitation of Tax Evasion Policy (formerly Corporate Criminal Offence Policy)
Internal and external audit:
– Reviewed the effectiveness of the external audit process, taking into
consideration relevant UK professional and regulatory requirements
– Invited challenge by the External Auditor, giving due consideration to the
accounting, financial control, and audit issues reported by the External Auditor
as a result of their work
– Reviewed the Internal and External Auditor independence and objectivity
including approving the policy on non-audit services
– Agreed the External Auditor engagement letter and recommended the External
Auditor remuneration to the Board
– Reviewed and approved the Internal Audit Charter
– Received and reviewed the annual plan and audit reports from the Internal
Audit function
– Undertook a review of the effectiveness of the Internal Audit function
– Held regular private meetings with the Internal and External Auditors, without
management present
– Ensured the External Auditor had full access to Company colleagues and records
Making recommendations to the Board about the reappointment of the
External Auditor:
– Reported to the Board on how the Committee has discharged its responsibilities
with respect to external audit
Other:
– Reviewed controls over the recognition of revenue from supplier income
– Reviewed the Committee’s Terms of Reference and approved amendments
– Monitored mandatory e-learning completion statistics for key compliance areas
such as Health & Safety, Anti-Bribery, Corruption & Fraud, and Code of Ethics
– Received legal and regulatory compliance updates
GOING CONCERN AND VIABILITY STATEMENT
The Committee reviewed the process and assessment of the Group’s prospects
made by management, including:
– The three-year viability assessment period and alignment with the Group’s
internal forecasts and business model
– The assessment of the capacity of the Group to remain viable after
consideration of future cash flows, financing and mitigating factors
– The modelling of the financial impact of the Group’s principal risks materialising
using severe but plausible scenarios
The Committee reviewed management’s analysis supporting the going concern
basis of preparation, including reviewing the Group’s financial performance, FY27
forecasts and cash flow projections. The going concern and viability reviews by the
Committee included review of the results of the reverse-stress tests performed by
management, of available financing in place and of any further mitigating actions that
management could take. In making its assessment, the Committee took into
consideration the trading results of the Group, liquidity and covenant compliance.
As a result of the assessment, the Committee reported to the Board that the
going concern basis of preparation remained appropriate and that there is a
reasonable expectation that the Group will be able to continue in operation to
meet its liabilities as they fall due over the three-year viability assessment period.
The Going Concern and Viability Statement is set out in the Strategic Report on
pages 148 and 149.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
176
AUDIT & RISK COMMITTEE REPORT
CONTINUED
IFRS 16 ‘Leases’
During the year, the Committee reviewed the key judgements and assumptions
applied to the calculations and disclosures provided within the Financial
Statements. The Committee considered and challenged the use of pre-IFRS 16
APMs within the Annual Report and Accounts and concluded that these APMs
align with the management reporting used to inform business decisions,
investment appraisals, incentive schemes and banking covenants.
Exceptional items
The Committee considered the presentation of the Financial Statements and in
particular the use of APMs and the presentation of exceptional items in line with
the Group accounting policy. This policy states that adjustments are only made
to reported profit when not considered part of the normal operating costs of
the business and considered exceptional due their size, nature or incidence.
Each of the above areas of judgement has been identified as an area of focus and
therefore the Committee has also reviewed reporting from the External Auditor
on the relevant areas.
Annual Report and Accounts – fair, balanced and understandable assessment
The Committee has considered whether, in its opinion, the Annual Report and
Accounts 2026, taken as a whole, are fair, balanced and understandable, and that
they provide the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy. The Group has
established internal controls in relation to the process for preparing the Annual
Report and Accounts. These include the following:
– Management regularly monitors and considers developments in accounting
regulations and best practice in financial reporting and, where appropriate,
reflects developments in the Financial Statements
– The Annual Report and Accounts are drafted by Senior Management with
overall co-ordination by a member of the finance team, to ensure consistency
across the relevant sections
– An internal verification process is undertaken to ensure accuracy
– Comprehensive reviews of drafts of the Annual Report and Accounts are
undertaken by experienced members of Senior Leadership and members
of the Committee
– The final draft of the Annual Report and Accounts is reviewed by the
Committee prior to consideration by the Board
Following its review, the Committee advised the Board that the Annual Report
and Accounts, taken as a whole, were considered to be fair, balanced and
understandable and that they provided the information necessary for shareholders
to assess the Group’s position and performance, business model and strategy. The
Committee was also satisfied that suitable accounting policies have been adopted
and appropriate disclosures have been made in the Financial Statements.
SIGNIFICANT FINANCIAL REPORTING AREAS
In preparing the Financial Statements, there are several areas requiring the
exercise of judgement by management. The Committee’s role is to assess
whether the judgements and estimates made by management are reasonable and
appropriate. To assist in this evaluation, the CFO provided an accounting paper to
the Committee, setting out all the financial reporting judgements and estimates
which were considered material to the Financial Statements. The main areas of
judgements and estimates that have been considered by the Committee in the
preparation of the Financial Statements are as follows:
Impairment of tangible and right-of-use assets
The Committee received and considered a paper from management covering the
judgements made in respect of the impairment testing of the Group’s property,
plant and equipment, and right-of-use assets. The Committee noted that
management had considered the trading results of each showroom and noted
where a showroom had low profitability which was not expected to improve in the
near future. The Committee also reviewed management’s assessment of whether
any prior impairments should be reversed. Given management has continued to
report on the performance of the business on a pre-IFRS 16 (IAS 17) basis within
its APMs alongside statutory measures derived under IFRS 16, the paper and
discussions considered impairment assessment of these assets on both bases.
As part of their review of impairment, the Committee challenged the assumptions
used in the cash flow forecasts for impairment testing, along with the disclosures
made in the Financial Statements. The Committee also received and discussed
a paper from the External Auditor on its work in this area, which specifically
considered and reported on its challenge and assessment of the key assumptions
and methodology used. The Committee was satisfied that the approach adopted
by management was sufficiently robust to identify when an impairment charge
or reversal for showroom assets needs to be recognised and how it should be
assessed and reported.
Inventory valuation
The Committee received a paper from management on accounting for and
valuation of inventory, including pre-owned inventory. It discussed the judgements
made by management, with specific consideration to discontinued product and
slow-moving stock. The Committee also considered the policy for, and calculation
of, rebates recognised and absorbed into inventory. The Committee received a
paper from the External Auditor regarding the audit work it performed over the
valuation of inventory. The Committee is satisfied that the process and judgement
adopted by management for the valuation of inventory is sufficiently robust to
establish the value of inventory held and is satisfied as to the appropriateness
of the Group’s provisioning policy.
Revenue recognition
The Committee received papers from management covering the control
environment relating to sales cut-off and accounting judgements in relation to
the accounting for gift cards, client returns and client deposits. The Committee
also received a paper from the External Auditor regarding the audit work they
performed over revenue recognition, which included the use of data analytic
tools. The Committee determined that the majority of the Group’s revenue
transactions are non-complex, with minimal judgement applied over the amount
recorded. The Committee is satisfied that the approach taken by management
is sufficiently robust in relation to the recognition of revenue.
STRATEGIC REPORT FINANCIAL STATEMENTS
177
GOVERNANCE REPORT
RISK MANAGEMENT AND INTERNAL CONTROLS
The Board has ultimate responsibility for effective management of risk for
the Group including determining its risk appetite, identifying key strategic
and emerging risks, and reviewing the risk management and internal control
framework. The Committee, in supporting the Board to assess the effectiveness
of risk management and internal control processes, relies on several different
sources to carry out its work including Internal Audit assurance reports, and the
assurance provided by the External Auditor and other third-parties in specific
risk areas.
The Committee monitors and reviews the effectiveness of the Group’s risk
management processes and internal financial and non-financial controls, including
its material controls. The key features of risk management processes that were
in place during the year are as follows:
– Key business functions conducted risk assessments based on identified business
objectives, which were reviewed and agreed annually by the Senior
Management of each function. Risks are considered and evaluated in respect
of their potential impact and likelihood. These risk assessments are updated
and reviewed at least half-yearly and are reported to the Committee
– A Group risk assessment is also undertaken by management, which considers
all areas of potential risk across all systems, functions and key business processes.
This risk assessment, together with the business risk assessments, forms the
basis for determining priorities within the Internal Audit plan
– Climate-related physical and transition risks and opportunities, which could
impact the business in the future under different climate scenarios, have been
considered and incorporated into the risk management framework with
oversight from the ESG Committee
– The Director of Internal Audit & Risk met with Senior Management to undertake
a formal review of the internal controls across the Group. Senior executives
were required to certify compliance with the Group’s policies and procedures
and that appropriate internal controls were in operation during the period under
review. Any weaknesses were highlighted, and the results were reviewed by the
Director of Internal Audit & Risk, the Committee, and the Board
– The Committee confirmed to the Board that it has reviewed the effectiveness
of the systems of internal control, including financial, operational and compliance
controls, and risk management for the period of this report, in accordance with
the Code and the Risk Management and Internal Control Guidance
INTERNAL AUDIT
The Director of Internal Audit & Risk, who reports directly to the Committee
Chair, provides assurance to the Committee through independent reviews of
agreed risk areas. The Committee is responsible for overseeing the work of the
Internal Audit function. It reviews and approves the scope of the Internal Audit
plan and assesses the quality of Internal Audit reports, along with management’s
actions relating to findings and the closure of recommended actions. Each year, a
carefully targeted Internal Audit plan is agreed to provide appropriate assurance
to the Committee over the effectiveness of risk management and internal control
processes across the Group. The Internal Audit plan is risk-based and takes an
independent view of what Internal Audit considers to be the highest known and
emerging risks and strategic priorities facing the business. The Committee is
satisfied that the Internal Audit plan provides appropriate assurance on the
controls in place to manage the principal risks facing the Group. Internal Audit
resources continue to be reviewed, with an agreement that external partners
would be utilised where subject matter expertise would be most appropriate.
The Director of Internal Audit & Risk:
– Attended all Committee meetings and provided reports and verbal updates
to the Committee
– Had direct access to all Committee members and met with the Committee
Chair and Committee members separately
– Regularly met with the Committee Chairs to carry out formal reviews
of the Internal Audit function’s resources, approach and audit plan
– Managed the risk register review process
– Met privately with the Committee without management being present
The assessment of the Internal Audit team covered the Internal Audit findings
and reporting, Internal Audit delivery including the Internal Audit plan, and
whether Internal Audit has sufficient, appropriate resources. In reviewing the
effectiveness of Internal Audit, the Committee considered:
– The results of Internal Audits and reporting thereof
– Ongoing communication between the Director of Internal Audit & Risk
and the Committee, including the private sessions held
– Self-assessment by the Director of Internal Audit & Risk
– Questionnaires and feedback from key stakeholders including Senior Management
Following assessment by the Committee during the year, the Committee is
satisfied that the Internal Audit team has the quality, experience and expertise
appropriate for the business.
EXTERNAL AUDITOR
Interaction with external audit
One of the Committee’s roles is to oversee the relationship with the External
Auditor, Ernst & Young LLP (EY), and to evaluate the effectiveness of the service
provided and their ongoing independence. The External Auditor has attended
all this year’s Committee meetings and at two of those had time with the
Committee without management present. The Chairs of the Committee have
also met with the external audit partner to review the audit scope and audit
findings. The Committee had regular open communication with the External
Auditor as well as with the Group’s management.
External Auditor independence and objectivity
During the year, the External Auditor reported to the Committee on its
independence from the Group. The External Auditor’s independence and
objectivity are safeguarded by:
– A policy being in place which limits the nature of non-audit services
– The External Auditor’s own internal processes to approve requests for
non-audit work to the External Auditor
– Monitoring changes in legislation related to auditor independence and objectivity
– Rotation of the lead audit partner after five years
– Independent reporting lines from the External Auditor to the Committee
– Restrictions on the employment by the Group of employees of the External Auditor
The Committee and the Board are satisfied that EY has adequate policies and
safeguards in place to ensure that the External Auditor’s objectivity and
independence are maintained. When assessing the independence of the External
Auditor, the Committee considers, amongst other things, the length of tenure of
the audit firm and the audit partner, the value of non-audit fees provided by the
External Auditor and the relationship with the External Auditor as a whole. As
part of the assessment of the External Auditor, the Committee considered
whether the External Auditor had exercised professional scepticism and an
appropriate degree of challenge to management.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
178
AUDIT & RISK COMMITTEE REPORT
CONTINUED
Non-audit services provided by the External Auditor
The Committee has adopted a formal policy in respect of non-audit services provided by the External Auditor to ensure that Auditor objectivity and independence are
appropriately maintained.
Non-audit services Policy
Audit-related services
Audit-related services are services, generally of an assurance nature, provided by the Auditor as a result
of its expert knowledge and experience of the Group. Audit-related services include:
– Reviews of half-year results
– Reporting required by law or regulation to be provided by the Auditor
– Reports to regulators
– Permissible non-audit services including, but not limited to:
– Work related to mergers, acquisitions, disposals or circulars
– Benchmarking services
– Corporate governance advice
The Auditor is eligible for selection to provide non-audit
services to the extent that its skills and experience
make it a competitive and most appropriate supplier
of these services.
Each new non-audit service must be approved by the
Committee in advance of the services being commenced.
Non-audit fees are capped to a maximum aggregate in
any financial year of 70% of the average of the statutory
audit fees charged in the previous three consecutive
financial years. In the case of this cap, audit-related
services concerning work required by national legislation
are excluded.
Prohibited services
In line with the FRC’s Ethical Standards, services where the Auditor’s objectivity and independence may be
compromised by the threat of self-interest, self-review, management, advocacy, familiarity or intimidation
are prohibited. Prohibited services include:
– Tax services
– Services that involve playing any part in the management decision-making process
– Bookkeeping and preparing accounting records and financial statements
– Payroll services
– Designing or implementing internal controls
– Valuation services (except such services that have no direct effect or are immaterial to the financial
statements)
– Legal, internal or human resources services
– Services linked to financing, capital structure and allocation and investment strategy except providing
assurance services in relation to the Financial Statements, such as the issuing of comfort letters in
connection with prospectuses issued by the audited entity
– Promoting, dealing in or underwriting shares in the Company
The Auditor is prohibited from performing these
services for the Group or any of its subsidiaries.
Non-audit services provided by EY during the financial year ending 3 May 2026 were limited to the half year review. The fee in relation to this service was £85,100
(FY25: £73,100).
Competition and Market Authority (CMA) Order 2014 Statement of Compliance
EY was first appointed in 2019 following a competitive tender process. This means that FY26 represents EY’s seventh year as the Company’s External Auditor. Under
UK law, as set out in the Companies Act 2006, the Company may retain its External Auditor for up to 20 years with a public tender process every ten years. The
Group confirms that it was in compliance with the provisions of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities) Order 2014 during the financial year ended 3 May 2026.
STRATEGIC REPORT FINANCIAL STATEMENTS
179
GOVERNANCE REPORT
EXTERNAL AUDITOR EFFECTIVENESS
It is the Committee’s responsibility to assess the effectiveness of the external
audit, including audit quality. The Committee assessed the External Auditor’s
effectiveness in September 2025 and kept this under review throughout the year
taking into account the External Auditor’s mindset and culture; skills, character
and knowledge; quality control and judgement. The assessment included:
Reviewing the Auditor’s risk assessment and audit plan
The Committee discussed EY’s risk assessment and detailed audit plan in
response to those risks. The proposed approach and planned scope of the audit
were also reviewed including the proposed materiality. The Committee was
satisfied that the audit plan was robust and covered the financial reporting risks.
The Committee also considered the balance of work completed between the US
and UK components along with recent acquisitions.
Proposed level of audit fees
The Committee reviewed and approved the proposed audit fees, which included
a detailed breakdown of those fees. This review also considered the level of
resources, senior leadership involvement and the use of specialist teams where
appropriate. The Committee satisfied itself that the agreed amount represented
fair value in order to deliver the quality and scale of audit sought.
Evaluation of the FRC’s Audit Quality Inspection and Supervision
Report on Ernst & Young LLP
The Committee reviewed the FRC’s Audit Quality Inspection and Supervision
Report for Ernst & Young LLP and also compared the results of the Auditor to
other audit firms. EY presented to the Committee its feedback on the findings
and planned actions to respond to each of those findings. The Committee was
satisfied with the outcome of this review.
The Committee also considered how the External Auditor had responded
to its previous assessments of audit quality.
Feedback from management and the Committee members
The Committee considers it important to gather feedback from management,
particularly those who are in direct contact with the audit team. Management and
Committee members completed a questionnaire and the results were reviewed
by the Committee. The questions covered the following areas:
– Mindset and culture
– Skills, character and knowledge
– Quality control
– Judgement
The feedback received was positive in all areas. Each year the External Auditor
meets with management to review the audit process, obtain feedback and make
recommendations for improvement in the following year’s audit.
Interaction with the External Auditor
Throughout the year, the Committee worked closely with EY and was able
to gather a good insight into the overall quality of the audit process and the
performance of key individuals within the audit team. This interaction included
private sessions with the External Auditor without management present and
regular meetings between the Committee Chairs and the Audit Partner.
The Committee also considered the quality of the reporting provided by the
External Auditor throughout the audit process. This included the robustness
and perceptiveness of the Auditor in handling key judgements, responding
to questions from the Committee and in its commentary where appropriate
on the systems of internal control.
The Committee considered the External Auditor’s use of professional scepticism
throughout the audit by examining areas in which the External Auditor had
challenged Senior Management’s assumptions. This was particularly in relation
to the key areas of judgement around the significant financial reporting areas,
and the number and nature of accounting and control observations raised.
Based on these reviews, the Committee concluded that EY had applied
appropriately robust challenge and scepticism throughout the audit, that
it possessed the skills and experience required to fulfil its duties effectively
and efficiently, and that the audit was effective.
Auditor reappointment
The Committee is responsible for considering whether there should be a
rotation of the External Auditor in order to ensure continuing auditor quality and
independence, including consideration of the advisability and potential impact of
conducting a tender process for the appointment of a different External Auditor.
The Committee is also responsible for recommending to the Board whether it
should ask the shareholders to appoint, reappoint or remove the External
Auditor at the AGM.
In its oversight of the external audit, the Committee reviewed the requirement
to put the external audit contract out to tender at least every ten years. The
Committee considered whether it would be appropriate to conduct an audit
tender at this time. The Committee took into account:
– Its continued satisfaction with the quality and independence of the External
Auditor’s audit
– Any new External Auditor would need a transition period to develop sufficient
understanding of the business given the Company’s size and complexity
– Frequent changes of External Auditor would be inefficient and could lead
to increased risk and the loss of cumulative knowledge
– A change in auditor would be expected to have a significant impact on the
Company, including on the Company’s finance function
– Any change in auditor should be scheduled to limit operational disruption
After due consideration the Committee determined it would not be appropriate
to re-tender for the external audit before a tender process is required in 2029.
EY has expressed willingness to continue in its capacity as independent Auditor
of the Company. The Committee has recommended to the Board the
reappointment of the External Auditor for the 2027 financial year and the
Directors will be proposing the reappointment of EY at the forthcoming AGM.
The External Auditor is required to rotate the audit engagement partner every
five years. The current engagement partner, Helen McLeod-Jones, was appointed
with effect from FY25.
FRC’s Audit Committees and the External Audit: Minimum Standard
The Committee confirms its compliance with the FRC’s Audit Committees and
the External Audit: Minimum Standard, including requirements on membership,
independence and financial competence, including the review of External Audit
effectiveness. Members maintain their sector relevant expertise through formal
training, external briefings and regular updates on emerging accounting, audit
and regulatory developments.
PAUL EDGECLIFFE-JOHNSON
CHAIR OF THE AUDIT & RISK COMMITTEE
13 July 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
180
AUDIT & RISK COMMITTEE REPORT
CONTINUED
ESG COMMITTEE REPORT
DEAR STAKEHOLDER
It is my pleasure to present the ESG Committee Report for the period
ended 3 May 2026.
During the period, the Committee has continued to provide oversight of ESG
activities ensuring the Group is able to demonstrate its commitment towards
delivering its ESG Strategy.
The Committee receives regular updates on current trends and developments
within the ESG regulatory landscape whilst recognising there is a shift in
stakeholder sentiment and scrutiny towards the ESG agenda in general, with
ESG considerations being embedded within ordinary business operations. It is
acknowledged that individual elements of the ESG framework remain important
indicators of a responsible and ethical business and the Group continues to
operate in line with its value to ‘do the right thing, always’ and integrate ESG best
practices within its day-to-day business operation with the aim of supporting the
long-term sustainability of the business. The Committee remains cognisant of the
continually evolving ESG landscape and monitors these issues alongside increasing
reporting regulations.
The Committee supports the Group in making progress across environmental,
social and governance indicators and strategic sustainability initiatives; strengthening
compliance, mitigating against risk and leveraging related opportunities. This
progress is reflected in our strong rating agency scores, demonstrated by our
improved A- score for our response to the 2025 CDP questionnaire on climate
change, being named a 2026 ESG Industry Leader by a leading global ratings
provider, and for advocating for our industry with representation on the
Responsible Jewellery Council (RJC) Standards Committee.
MEMBERS
I am joined on the ESG Committee by Ian Carter, Chair of the Board, and
Non-Executive Directors Tea Colaianni MBE, Paul Edgecliffe-Johnson and Chabi
Nouri. Brian Duffy, the Company’s CEO, is also a member of the Committee and
plays an instrumental role in integrating ESG matters into the Company’s business
strategy and planning, demonstrating top level commitment from Senior Leaders
in progressing the ESG Strategy.
Biographies of Committee members, including details of their skills and
experience, can be found on pages 156 and 157.
The Company Secretary and General Counsel acts as Secretary to the ESG
Committee and other Senior Management and/or external advisers may attend
by invitation, as appropriate, for all or part of meetings. This includes the CFO,
the Head of Sustainability and ESG, the Executive Director, Global Buying and
Merchandising and the Executive Director HR.
ROLE
In FY26, the Committee continued to oversee progress against material ESG
indicators including challenging and collaborating with the Executive Directors
and Senior Leaders, to ensure ESG is integrated in the Group’s day-to-day
business operations as well as the long-term strategy.
Our ESG Strategy and approach are aligned with best practice frameworks and
the expectations of our stakeholders and aims to be both inspiring and achievable.
Our Strategy focuses on delivering against identified priorities and is organised
into three Sustainability strategic pillars: People; Planet; and Product, to align with
the Group’s purpose and values, support engagement and integrate with wider
business strategies.
MEMBERS
Baroness (Rosa) Monckton MBE (Chair)
Tea Colaianni MBE
Ian Carter
Brian Duffy
Paul Edgecliffe-Johnson
Chabi Nouri
KEY RESPONSIBILITIES
– Provide oversight on behalf of the Board in relation to the Company’s
ESG Strategy including activities and performance
– Oversee ESG and sustainability goals, targets and KPIs, and provide
accountability for successful delivery
– Monitor the progress of the Company’s ESG Strategy and climate
transition planning to ensure it is embedded into core business
operations, and that stakeholders are engaged with it
– Ensure the Company monitors current and emerging ESG trends
and adheres to relevant international standards and legal/regulatory/
governance requirements
– Provide guidance and monitor actions and initiatives taken to prevent,
mitigate and manage risks related to ESG matters which may have a
materially adverse impact on the Company and its stakeholders
– Collaborate with the Audit & Risk Committee and the Remuneration
Committee on matters which overlap
– Make recommendations to the Board in relation to the required
resourcing and funding of ESG-related activity
– Oversee the Company’s public disclosures, regarding the Company’s
ESG Strategy activities and performance, and review and monitor
he Company’s non-financial reporting with respect to ESG matters
BARONESS (ROSA)
MONCKTON MBE
Chair of the ESG Committee
STRATEGIC REPORT FINANCIAL STATEMENTS
181
GOVERNANCE REPORT
The Committee closely monitors progress against ESG metrics and targets
including the key performance indicators within the Modern Slavery Statement.
Alongside the Remuneration Committee, the Committee also considers the key
areas of strategy which link to the ESG bonus underpin for determining bonus
outcomes. Further details on the ESG underpin and its performance can be
found in the Directors’ Remuneration Report on page 184.
The Committee supports the Audit & Risk Committee and the Remuneration
Committee in respect of ESG-related matters reserved for their remit. The
Committee also plays a crucial role in monitoring environmental goals including
the development and delivery of a climate transition plan, and ensuring actions are
taken to mitigate and manage climate-related risks and opportunities, making sure
they are embedded in the Group’s risk management processes, financial
decision-making and core business strategy.
The ESG Committee is supported by an ESG Steering Group, which is chaired by
the CFO. The ESG Steering Group is made up of key Senior Leaders, who each
have formal operational responsibility for the management of relevant ESG issues.
The ESG Steering Group acts under a separate Terms of Reference and reports
progress towards the development, implementation and delivery of the
Company’s ESG Strategy into the ESG Committee. The ESG Steering Group
is supported by a number of working groups which sit under the People, Planet
and Product sustainability pillars.
People
Colleagues can share their thoughts through a variety of channels, including
Skip-level meetings, engagement surveys, or CONNECT – the interactive digital
Group engagement platform, which is used to promote and communicate the
colleague incentive, and GreenVibE, which encourages and rewards positive
environmental behaviours. Further information on this part of the Company’s
colleague engagement programme can be found on pages 91 to 94.
The Group takes great pride in the expertise and dedication of our hard-working
colleagues, who share in our purpose and values and has built strong talent and
development foundations. The Committee was pleased to note that our gender
pay gap continues to narrow, underpinning our commitment to a culture of
meritocracy. This year, the mean gender pay gap reduced from 16% in 2024 to
15% in 2025. Whilst there is still a way to go, we are encouraged by this progress
and expect it to continue as the Group continues to grow. It is important to note
that at Company level, the upper quartile is the only quartile where we see a
more significant gender pay gap. Across the remaining 75% of our total
population, the median and mean pay gap narrows and becomes 0% in the lowest
quartile. When we look in closer detail across our Retail divisions, we continue to
report overall progress in closing the gender pay gap in our UK Retail businesses.
For further information, please see page 187.
Planet – Climate transition plan
As required by UK law the Group is aiming for net-zero carbon emissions by 2050
and the Committee is mindful that failure to align risks regulatory scrutiny, and
that policy changes may affect future operations and costs.
During the year, the Committee approved the Company’s long-term science-
based targets. The Committee also agreed with the disaggregation of our Scope 1
and 2 targets in line with best practice and in January 2026, the SBTi verified and
approved the targets.
Further information on these targets can be found on page 101.
Planet – Energy management
The Group is committed to responsible energy management and continual
improvement in energy and as such the Committee approved an Energy Policy
which outlines our guidelines and procedures for reducing energy consumption,
improving energy efficiency, and minimising our environmental impact
performance across every territory we operate in. The Company’s Property
Team has day-to-day responsibility for the implementation of this Policy and will
monitor it accordingly to ensure it is being adhered to.
The Group further rolled out a new technological solution to reduce energy
consumption and related carbon emissions and as such the Committee noted the
cost of capital expenditure required to roll out this project. The Committee was
supportive of the project as it would support the Group’s net-zero strategy and
is estimated to deliver energy savings over a three-year period across the Group’s
showroom portfolio.
Planet – Emissions
Our total emissions grew 14% year-on-year, reflecting record growth and the
high concentration of emissions within ‘Purchased Goods and Services’, which
accounts for approximately 86% of our Group carbon footprint. A 19% increase
in spend-based emissions factors also contributed to this increase – and underlined
the need for greater visibility of our value chain, more targeted supplier engagement
and the introduction of emissions estimation methodologies in FY27 where data is
unobtainable. While this increase in total emissions is disappointing, we were glad
to see a 2% reduction in combined Scope 1 and 2 emissions as we continue to
improve operating efficiency and build climate resilience.
Product – Supply chain due diligence
The Procurement Policy, Sustainability Standards and the Vendor Code of
Conduct operate simultaneously and compliance is supported by the factory
audit programme, which independently audits suppliers on a rotational basis.
The Committee receives updates on the audit programme at each meeting.
On-site factory audits help safeguard the integrity and reputation of our business
operations and partnerships, with specialist independent auditors assessing
facilities against over 200 indicators. In June 2025, management attended the JCK
Jewellery exhibition at Las Vegas, where a number of meetings had been held
with jewellery suppliers and the opportunity was taken to reinforce the messaging
on the importance of supplier audits.
With the introduction of lab-grown diamonds which are becoming an increasing
part of the Company’s portfolio of products, the Committee discussed due
diligence pertaining to the supply of lab-grown diamonds. Relevant suppliers
are subject to online screening as part of our onboarding and supply chain
management process and are included in the current internal audit schedule.
In addition, the latest RJC guidance on lab-grown diamonds has been
incorporated into the Group’s Supplier Operating Manual.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
182
ESG COMMITTEE REPORT
CONTINUED
KEY FOCUS AND ACTIVITIES DURING THE YEAR
– Approved the Annual Report and Accounts 2025 ESG Committee Report
– Climate transition plan – reviewed the updated net-zero roadmap,
including interim targets and capital allocation implications
– Contributed to the development and delivery of the ESG Strategy and
reporting, by approving key decisions and providing accountability against
goals, targets and KPIs
– Received reports and recommendations from the ESG Steering Group
– Supply chain due diligence – evaluated human rights risk assessments and
modern slavery controls
– Governance – reviewed key documents for Board approval including: the
Modern Slavery Statement; the Environmental Policy; the Human Rights Policy
– Recommended appropriate sustainability and ESG-related performance
objectives for Executive Directors, as part of the ESG bonus underpin,
to the Remuneration Committee
– Benchmarked the Company’s performance against sustainability rating
agency reports along with the CDP questionnaire on climate change
– In conjunction with the Audit & Risk Committee, reviewed the Company’s
progress against recommendations by the TCFD and non-financial reporting
– Carried out a review of the materiality assessment
The Committee’s duties and responsibilities are set out in its Terms
of Reference, which are reviewed annually. These are available on the
corporate website.
Further details on our approach to managing our environmental performance can
be found on pages 120 and 122.
STAKEHOLDER ENGAGEMENT
The Committee welcomes feedback from all our stakeholders to ensure their
interests are represented in the ongoing development of the Company’s ESG
Strategy and approach to ESG matters.
The Company responds to sustainability rating agency questionnaires received
on behalf of investors and facilitates meetings and roadshows to enable investors
to ask questions.
The Head of Sustainability and ESG regularly updates the Committee with key
external drivers and stakeholder sentiment, and it is also kept up-to-date with
supplier engagement activities to support the promotion of shared sustainability
goals and ensure due diligence.
A materiality assessment, which is an important way of engaging with all
stakeholder groups to identify issues impacting on our business, was reviewed
with updates considered and approved. Issues identified as ‘material’ through this
process were assessed.
OUTLOOK
To drive continual improvement, the Committee stays up-to-date with best
practice and, during each meeting, the Company’s performance is benchmarked
against retail peers and leaders in luxury discretionary goods.
We will continue to monitor the Company’s performance and review our
approach to ESG matters in FY27 to further enhance the Company’s brands,
create new business opportunities, help reduce costs, engage stakeholders and
ultimately build a successful business that is sustainable over the long term. This
monitoring will take place alongside external factors assessing the future of the
ESG agenda as we continue to embed ‘do the right thing, always’ into our business
as usual practices and processes under the banner of delivering on our Purpose.
Further information on the work of the Committee and the progress being made
by the Group can be found on pages 81 and 137.
BARONESS (ROSA) MONCKTON MBE
CHAIR OF THE ESG COMMITTEE
13 July 2026
STRATEGIC REPORT FINANCIAL STATEMENTS
183
GOVERNANCE REPORT
The Remuneration Committee’s Terms of Reference at:
thewosgroupplc.com
TEA COLAIANNI MBE
Chair of the Remuneration
Committee
DEAR STAKEHOLDER
On behalf of the Remuneration Committee, I am pleased to present the Group’s
Remuneration Committee Report for the 53-week period ended 3 May 2026.
FY26 business performance highlights
FY26 was a year of strong strategic and operational progress for the Group, which
delivered ahead of expectations.
– Revenue increased by 11% to £1,827.9 million
– Adjusted EBIT¹ increased 3% to £154.8 million
– Operating profit increased 49% to £170.0 million
– Return on Capital Employed¹ (ROCE) reduced by 100bps to 18.0%
We remain confident that our strategy, exceptional client experience and strong
brand relationships will enable us to continue to drive growth. I would like to
thank all colleagues for their continued work and dedication during the year.
Base salary/fee increases in FY26
The annual salary review process took place in November 2025, in line with
our normal review timing. The UK salary review saw an increase of 2% for our
colleagues in the Support Centre and retail. The salary review in the US saw
an increase of 3% for both Support Centre and retail colleagues.
The CEO and CFO elected once again, not to receive an increase in base salary.
In light of the uncertain macroeconomic conditions particularly the introduction
of additional US tariffs and the ongoing government negotiation, the decision
on any increase to the Chair and Non-Executive Director fees was deferred to
September 2025. A comprehensive benchmarking exercise was carried out by
Deloitte and an increase of 10% for the Chair and 3% for the Non-Executive
Directors was approved by the Board effective from May 2025. This is the first
increase since their appointment.
Annual bonus outturn for FY26
The Executive performance target for the FY26 annual bonus was based on
Adjusted EBIT, with an ESG underpin. Adjusted EBIT for FY26 was £154.8 million,
which exceeded the maximum performance level for the FY26 bonus payment.
The Remuneration Committee assessed progress against our ESG Strategy using
the ESG bonus underpin agreed at the start of the financial year. The key
highlights included:
– Caring for our Planet – We have reduced our combined Scope 1 and 2 location-
based emissions year-on-year and grew our sales of pre-owned watches
– Caring for our Colleagues – We have maintained strong engagement with our
colleagues and have delivered training and development programmes including
apprenticeships
– Caring for our Communities – We have continued our support of charitable
organisations including The Watches of Switzerland Group Foundation and
increased volunteering hours by 52%
Overall, the Committee considered that the progress against our ESG Strategy in
FY26 was positive. The Committee therefore determined that the ESG underpin
has been met and that there would be no downwards adjustment to the
formulaic bonus outcome.
Full details on the performance outturn against the targets are shown in the
‘At a glance’ section on pages 189 and 190.
REMUNER ATION
COMMITTEE REPORT
Members Independent
No. of meetings
attended
Tea Colaianni MBE (Chair)
3/3
Ian Carter
3/3
Baroness (Rosa) Monckton MBE
3/3
Paul Edgecliffe-Johnson
1/1
Robert Moorhead
1/1
Section Page
Chair’s statement 184
Wider workforce considerations 187
At a glance 189
Annual Report on Remuneration 192
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
184
Long-Term Incentive Plan (LTIP) awards vesting in FY26
The performance conditions for the LTIP grants awarded in December 2023 were
based 80% on three-year cumulative Adjusted EPS¹ and 20% on three-year
average ROCE performance.
The performance targets were set taking into account internal and external
expectations of performance at the time. Despite strong performance over
the last 12 months, the macroeconomic backdrop over the full three-year
performance period resulted in cumulative Adjusted EPS of 124.8p and three-year
average ROCE of 18.8%. which were both below the threshold target set. As such,
0% of the LTIP award is due to vest in July 2026.
Vesting of LTIP awards granted in 2024 and 2025 will be based on performance
for FY27 and FY28.
The targets for the FY26 LTIP had not been finalised by the publication of last
year’s report due to market volatility, including the impact of US tariffs, delaying the
target setting process. The targets for these awards were set during the year and
were disclosed on our website at the time. These have been included on page 193.
DIRECTORS’ REMUNERATION POLICY
Our Remuneration Policy was last approved by shareholders at the 2025 AGM
where it received strong support (96.9%). Details on this policy can be found in
the Annual Report and Accounts 2025.
FY27 IMPLEMENTATION OF REMUNERATION POLICY
Base salary/fee increases for FY27
The next salary reviews for all colleagues in the US and UK will be in November 2026.
Annual bonus for FY27
The annual bonus will be determined in line with the normal cycle. For FY27, the
annual bonus will continue to be based on Adjusted EBIT and the ESG underpin
will continue to apply for FY27. The ESG underpin will focus on key metrics under
our three main Sustainability pillars:
– Caring for our Planet
– Caring for our Colleagues
– Caring for our Communities
This ESG underpin will inform the Committee’s decision of whether or not to
apply a downwards adjustment of up to 10% to the formulaic FY27 annual bonus
outcome. Key factors considered by the Committee will be disclosed retrospectively
in next year’s Annual Report and Accounts, in line with best practice.
LTIP awards to be granted in FY27
The Committee has determined that LTIP grants will be made in line with the
normal cycle of being awarded following the announcement of the FY26 results.
No changes are proposed to the LTIP award levels and these will continue to be
200% of base salary for the CEO and 175% of base salary for the CFO. In line with
last year’s grant, the LTIP measures will be based on a three-year cumulative
Adjusted EPS and three-year average ROCE with weightings of 80% and 20% of
maximum respectively. ROCE is a key performance indicator (KPI) and measures
the efficiency with which the Group is able to utilise its capital. Strong average
ROCE performance combined with continued growth in earnings is critical in
ensuring the successful execution of our long-term strategy and growth ambitions.
Wider workforce considerations
The Watches of Switzerland Group always strives to be an organisation that is
inclusive, rewarding and fair to all colleagues. It is the unwavering commitment
from our colleagues that has been critical to the Group as we navigated the
trading conditions across luxury retail. During this time, the Committee has been
acutely aware of the challenges our colleagues have been facing because of the
macroeconomic environment.
The Watches of Switzerland Group continues to be an organisation that values
all colleagues across the business and is particularly mindful of the circumstances
of those on the lowest salaries.
Our commitment to the Real Living Wage Foundation in the UK over the past
two years has meant that we have invested in those on the lowest wages. It was
agreed to not meet the increase of 6% this year (recommended by the Real Living
Wage Foundation) in the context of higher regulatory and labour costs in the UK.
We have continued to embed our communication strategy in FY26 which creates
a further opportunity for two-way communication across the Group. New
Skip-level meetings and UK Town Halls have been attended by Baroness (Rosa)
Monckton MBE in her capacity as the Designated Non-Executive Director for
Workforce Engagement, which include question and answer sessions and the
review of colleague feedback.
In the US, we have focused on integrating colleagues from Roberto Coin Inc. into
the US benefit plans and renewed private health insurance cover for all US colleagues.
In the UK, we continue to provide the Watches of Switzerland Group Support
Fund, which offers financial support by way of a loan for those most impacted
by the cost-of-living crisis.
We will continue to monitor this area and make adjustments as necessary
to support ongoing retention and motivation in a challenging macroeconomic
and talent environment.
HOW THE REMUNERATION COMMITTEE SPENT ITS TIME IN FY26
As a Remuneration Committee, it is our responsibility to make decisions
which support the Group’s long-term business strategy, and which align with
the Group’s culture and values. We must balance this with our desire to
reflect best practice remuneration and high standards of corporate
governance. In addition to its usual activities, key areas of focus for the
Committee in FY26 have been:
– Ensured that our incentive framework continues to appropriately motivate
and retain our colleagues in challenging market circumstances
– Reviewed performance against incentive performance measures, including
reviewing the ESG underpin
– Considered and approved the remuneration package for colleagues below
Board and new hires where appropriate
– Reviewed gender pay gap progress and relevant actions
– Reviewed Chair fee
1 This is an Alternative Performance Measure. Refer to Glossary on pages 261 to 265 for
definitions and reconciliation to statutory measures.
STRATEGIC REPORT FINANCIAL STATEMENTS
185
GOVERNANCE REPORT
Engagement with shareholders
I would like to take this opportunity to thank our shareholders for their support
of our Directors’ Remuneration Report and Remuneration Policy at our 2025
AGM, details of which can be found on page 197. We recognise that executive
remuneration is an area of public interest and we have worked hard to ensure
that full transparency has been provided in this year’s Directors’ Remuneration
Report on the Group’s remuneration practices and our Remuneration Policy.
In conclusion
In addition to the policy, the remainder of the Remuneration Report is split into
three parts:
Wider workforce considerations
This section contains discussions on the Company’s initiatives in colleague and
stakeholder engagement. In addition, we have included a report on specific areas
in relation to wider workforce remuneration which the Committee reviewed
during the course of the year.
‘At a glance’ section
The ‘At a glance’ section provides a summary of the payments made to the
Executive Directors during FY26.
Annual Report on Remuneration
This section summarises remuneration decisions during the past year. This
includes details of annual bonus and long-term incentive awards granted and
vesting during the year.
I hope that you will find this year’s report clear, transparent and informative. If you
wish to discuss any aspect of this Remuneration Report, I would be happy to hear
from you. You can contact me through our Company Secretary and General
Counsel, Laura Battley. I will also be available at the Company’s AGM at 2.30pm
on Thursday 3 September 2026 to answer any questions.
On behalf of the Remuneration Committee and the Board.
TEA COLAIANNI MBE
CHAIR OF THE REMUNERATION COMMITTEE
13 July 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
186
REMUNERATION COMMITTEE REPORT
CONTINUED
WIDER WORKFORCE CONSIDERATIONS
As part of our commitment to fairness, openness and inclusivity, as in previous
years, we have included this dedicated section to provide more information on
our communication with colleagues, our remuneration principles and wider
workforce pay conditions.
COMMUNICATIONS WITH COLLEAGUES
We have a number of channels where colleagues’ views on remuneration can
be captured. For example, colleagues are able to express their views through
Company Colleague Engagement Surveys and through two-way communication
channels in the US and the UK. We are committed to giving our colleagues a
voice and they have always had the opportunity to interact with our Directors.
We have a dedicated Designated Non-Executive Director for Workforce
Engagement, Baroness (Rosa) Monckton MBE, responsible for gathering our
colleagues’ views and presenting these to the Board.
How we engaged with colleagues in FY26
– Open conversation during ‘In Conversation With’ sessions attended by
Baroness (Rosa) Monckton MBE and senior leadership
– Local ‘pulse’ surveys and understanding what matters to our colleagues
– Innovative and accessible communication portals including CONNECT
– Colleague engagement, input to office environment and the Foundation Forum
– Visits to showrooms and other locations by the Chair of the Board and other
Board members
– Colleague attendance at Board meetings and informal engagement events with
the Board
In early April 2026, we hosted skip-level meetings chaired by Baroness (Rosa)
Monckton MBE in the US and the UK which involved open two-way conversations
with colleagues below management level. This provided Rosa with an opportunity to
ask questions in an informal setting about culture, organisation and any other issues.
REMUNERATION COMMITTEE REPORT
A process was introduced in 2020, which enables the Remuneration Committee
to carry out its oversight and review of wider workforce pay and policies, and to
ensure that they are designed to support the Company’s desired culture and
values. When conducting its annual review, the Remuneration Committee pays
particular attention to:
– Whether remuneration is consistent with the Company’s remuneration
principles
– If there are differences, whether they are objectively justifiable
– Whether the approach seems fair and equitable in the context of other
employees
Once the Remuneration Committee has conducted its review of the wider
workforce remuneration and incentives, it will consider the approach applied
to the remuneration of the Executive Directors and Senior Management. In
particular, the Remuneration Committee is focused on whether the approach
to the remuneration of the Executive Directors and Senior Management is
consistent with that applied to the wider workforce.
The Remuneration Committee remains satisfied that the approach to
remuneration across the Group is consistent with the Company’s principles
of remuneration. Furthermore, in the Remuneration Committee’s opinion, the
approach to executive remuneration aligns with the wider Company pay policy
and there are no anomalies specific to the Executive Directors, excluding the
fact that, since the IPO in 2019, the Executive Directors have elected not to
receive salary increases or pensions. Both Executive Directors receive private
healthcare insurance.
GENDER PAY
UK legislation requires employers with more than 250 employees to disclose
information on their gender pay gap on an annual basis. We have published our
eighth disclosure of the pay gap based on amounts paid in the April 2025 payroll.
The bonus gap was based on incentives paid in the year to 31 March 2025.
The mean gender pay gap at the Group has reduced to 15% from 16% last year.
The median gap remains at 5% in line with last year. Whilst there is still a way
to go, we are encouraged by the result. The full report, including details on the
initiatives we have underway to help close our gender pay gap, is available on our
website thewosgroupplc.com
The following table sets out a summary of the information received by the
Remuneration Committee on the Group’s remuneration structure:
Element of
remuneration Overview of practice at the Watches of Switzerland Group PLC
Alignment
with
remuneration
principles
The Group’s remuneration principles are designed to enable
fair and flexible reward structures to be developed and
implemented across the entire organisation. We continue to
review and redesign our policies in line with this principle.
Salary
Salaries are set to reflect the market value of the role, and to
aid recruitment and retention. Remuneration for all colleagues
is in line with or above the UK National Living Wage or the
US state minimum. We closely monitor the rates of pay of
people who are training with us to make sure they remain fair
and competitive.
Salary increases are normally awarded annually following the
Company’s main pay review and are typically between 2% and
3%. This year, our UK Support Centre pay review delivered
an increase of 2% for all colleagues below Executive Level.
Typically, the Executive Directors will receive no more than
the same percentage increase as the wider workforce. The US
awarded pay increases of 3% to support and retail colleagues.
From time to time, ad hoc pay reviews are conducted in order
to make market or inflationary adjustments and ensure the
Company’s targeted living wage differential is maintained.
STRATEGIC REPORT FINANCIAL STATEMENTS
187
GOVERNANCE REPORT
Element of
remuneration Overview of practice at the Watches of Switzerland Group PLC
Annual
variable pay
All Watches of Switzerland Group colleagues are entitled to
earn variable pay linked to stretching performance targets:
Annual bonus plan
Subject to service and eligibility, our colleagues in support
functions participate in the Company’s annual bonus plan and
are rewarded based on financial performance measured using
Adjusted EBIT . As outlined in last year’s Directors’ Remuneration
Report, a robust ESG underpin applies to annual bonus awards.
Bonuses typically operate in one of three formats depending
on the level of seniority and line-of-sight to performance:
– For roles with a global remit, bonuses are based 100%
on Group performance
– For roles that wholly or mainly concentrate on either
our US or UK operations, bonuses are based 100% on
the performance of the business in the relevant country
The bonus quantum for all colleagues is paid in full.
Where Executive Directors have met their shareholding
requirements in full, annual bonus awards will typically be made
fully in cash rather than part being deferred into shares. Where
an Executive Director has not met their shareholding guidelines,
they would be required to defer one-third of their annual bonus
into shares to support building their shareholding and to increase
alignment with shareholder interests.
Bonuses are normally paid in July, after it has been confirmed that
the performance conditions have been met.
Sales commission plans
A range of plans exist for our retail team members which reflect
the size and complexity of the showrooms. Targets can be based
on individual objectives for larger showrooms or team-based
objectives for smaller showrooms. The majority of these plans
are paid monthly and biannually.
We review these schemes periodically to ensure they adhere
to our reward principles and support good client outcomes.
LTIP
The LTIP is currently available to Executive Directors and
Senior Management. LTIP awards are normally granted annually.
Malus and clawback provisions are in place.
The vesting period is normally three years.
The Executive Directors are subject to an additional two-year
holding period. Eligible colleagues and details of the award
opportunity are set out below.
Level
No. of eligible
colleagues
Targeted ranges
(% of salary)
Group CEO 1 200%
Group CFO 1 175%
Senior Management 16 20–80%
Pension
The Company operates UK defined contribution pension
arrangements, which all UK employees are entitled to participate in.
The Executive Directors are entitled to receive an employer
pension contribution of 3% of salary, which is aligned with the level
available to the majority of the wider workforce in the UK. The
CEO and the CFO waive their employer pension contributions.
Arrangements for US employees vary depending on territory. In
some locations, the Company offers a 3% 401(k) employer match
and in other locations a 2% match is offered.
Element of
remuneration Overview of practice at the Watches of Switzerland Group PLC
Benefits
We offer a suite of benefits across the Group, which are designed
to be appropriate for different roles and functions and countries.
These include health insurance (for all US colleagues and some
UK colleagues), and in the UK, season ticket loans, a cycle to work
scheme, an electric car salary sacrifice scheme, a Health Cash
Plan, and UK and US enhanced maternity leave. Life cover is
offered to varying degrees depending on grade and region.
We operate an Employee Assistance Programme (EAP) in the
US and UK. This is intended to help employees deal with any
personal problems that may adversely impact their work
performance, health and/or wellbeing and financial support.
All of our colleagues are entitled to staff discounts, subject
to the rules of the relevant schemes.
All-employee
share schemes
Our colleagues are able to participate in our sharesave schemes
in the US and UK.
A summary of the Company’s general policies is as follows:
Policy Description
Reward
We have an ethical pay policy and we periodically benchmark
salaries against market data. We have implemented interim
reviews for relevant groups of colleagues when deemed
necessary to guarantee compliance with the legislation, and
to ensure our pay rates remain competitive with those of our
main competitors.
Recognition
and celebration
Our UK recognition programme, VibE, provides all colleagues
with the ability to recognise and celebrate achievements across
the colleague population instantly via a digital platform.
CONNECT, our internal community-based social platform,
provides Company news, and enables our colleagues to
recognise and celebrate achievements across the Group.
Development
opportunities
We are proud of our wide range of training and development
programmes in the US and UK and we work closely with our
brand partners to ensure that our colleagues are true experts
in our category. Our e-learning modules make learning and
personal development accessible to all.
Equal
opportunities
and diversity
initiatives
The Company is committed to an active Diversity & Inclusion
Policy from recruitment and selection to training and
development, performance reviews and promotion. All decisions
relating to employment practices are objective, free from bias and
based solely upon work criteria and individual merit. The
Company is responsive to the needs of its colleagues, clients and
the community. We are an organisation that seeks to make use of
everyone’s talents and abilities, and where diversity is valued. The
Company ensures that its promotion and recruitment practices
are fair and objective and encourages the continuous development
and training, as well as the provision of equal opportunities for the
training and career development, of all colleagues.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
188
WIDER WORKFORCE CONSIDERATIONS
CONTINUED
AT A GLANCE
DIRECTORS’ REMUNERATION REPORT
1 This is an Alternative Performance Measure and is shown pre-IFRS 16. Refer to the Glossary on pages 261 to 265 for definition, purpose and reconciliation to statutory measures where relevant.
REMUNERATION PRINCIPLES
Our reward strategy is designed to support and reinforce our purpose and values, and to reward all of our colleagues for delivering against our strategic objectives.
The remuneration principles that we have developed across the Group are cascaded throughout the organisation.
Current Directors’ Remuneration Policy
Fixed
Salary
Reflects the value of the individual, their role, skills, experience and contribution to the business
Benefits
Aligned with all other colleague arrangements
Pension
Alignment of employer pension contributions with the wider workforce at 3% of salary. The CEO and CFO have waived their employer pension
contribution once again this year
Variable
Annual bonus plan
Incentivises achievement of annual objectives and aligns Director and shareholder interests by ensuring share ownership for Executive Directors
LTIP
Provides alignment with shareholders and motivates key individuals to achieve long-term targets and deliver sustainable performance
WHAT IS THE LINK TO COMPANY STRATEGY?
The following diagram shows the link between our Remuneration Policy and our strategy through looking at our KPIs, which measure the successful implementation
of that strategy and the performance conditions we use for our incentive plans. Our FY26 performance against our KPIs is also shown below:
REVENUE
£1,827.9m
FY25: £1,651.5m
RETURN ON CAPITAL EMPLOYED
1
18.0%
FY25: 19.0%
ADJUSTED EBIT
1
£154.8m
FY25: £149.7M
OPERATING PROFIT
£170.0m
F Y2 5 : £113.9m
CASH GENERATED FROM OPERATIONS
£277.6m
FY25: £214.1m
ADJUSTED EPS
1
45.2p
FY25:41.6p
BONUS PLAN
Performance condition: 100% based on Adjusted EBIT
Reflects the successful delivery of our Adjusted EBIT KPI subject to
an ESG underpin, which can reduce the bonus up to 10% taking
into account progress against our ESG strategy
LTIP
Performance conditions: Adjusted EPS (80%) and ROCE (20%)
Reflects the successful delivery of a number of KPIs over the long
term: Adjusted EPS and ROCE
KPIS
STRATEGIC REPORT FINANCIAL STATEMENTS
189
GOVERNANCE REPORT
ANNUAL BONUS OUTCOMES IN FY26 (AUDITED)
Performance
condition Weighting
Threshold
performance
required (20% of
max bonus)
Target
performance
required (50% of
max bonus)
Maximum
performance
required (100% of
max bonus)
Actual
performance
Percentage of
maximum
performance
achieved
Bonus value achieved
Brian Duffy Anders Romberg
Adjusted EBIT 100% £133m £140m £147m £154.8m 100%
£750,000 £475,000
For further detail refer to page 193.
LTIP OUTCOMES IN FY26
The LTIP awards granted in December 2023 were based 80% on three-year cumulative Adjusted EPS and 20% on three-year average ROCE performance.
As a result of Adjusted EPS and ROCE performance over the three-year performance period (FY24 to FY26), 0% of the LTIP award is due to vest in July 2026.
Performance condition Weighting
Threshold performance
required (20% of max
LTI P)
Target performance
required (60% of max
LTI P)
Maximum
performance required
(100% of max LTIP)
Actual
performance Vesting level
Cumulative Adjusted Earnings Per Share
80% 189.9p 199.9p 209.9p 124.8p 0%
Average ROCE 20% 23.7% 24.9% 26.2% 18.8% 0%
For further detail of the performance outcomes refer to page 193.
REMUNERATION IN RESPECT OF FY26
Total compensation
Brian Duffy (CEO) Anders Romberg (CFO)
Salary: £500,000 Salary: £380,000
Taxable benefits:
1
£73,793 Taxable benefits:
1
£20,237
Annual bonus:
2
£750,000 Annual bonus:
2
£475,000
LTIP:
3
– LTIP:
3
–
Pension: – Pension: –
Tot al: £1,323,793 Tot al: £875,237
1 Taxable benefits include one or more of private healthcare, accommodation when attending their usual place of work, company car (including private fuel) or a car allowance
2 A bonus payment is to be awarded for FY26, based on 100% of maximum potential with 100% payable in cash due to both the Executive Directors meeting the required shareholding limit
3 The FY24 LTIP awards (granted December 2023) have not met the performance conditions and 0% will vest
For further detail refer to page 192.
MALUS AND CLAWBACK
The Committee has the discretion to apply malus and/or clawback in relation to
awards under the annual bonus, Deferred Bonus Plan or the LTIP in the circumstances
set out in the relevant plan rules and award documentation, which currently includes:
– A material misstatement resulting in an adjustment in the audited accounts of
the Group or Company
– The assessment that any performance condition or condition in respect of the annual
bonus or LTIP award was based on error, or inaccurate or misleading information
– The discovery that any information used to determine the annual bonus or LTIP
award was based on error, or inaccurate or misleading information
– Action or conduct of a participant which amounts to fraud or gross misconduct
– Events or the behaviour of a participant have led to the censure of the Company
or Group by a regulatory authority or have had a significant detrimental impact on
the reputation of the Group or Company provided that the Board is satisfied that
the relevant participant was responsible for the censure or reputational damage
and that the censure or reputational damage is attributable to the participant
– A material failure of risk management
– In circumstances of corporate failure, the Committee may apply malus to annual
bonus cash awards up to the date of the bonus payment and/or operate
clawback for a period of two years following the bonus payment. Deferred bonus
awards are subject to malus during any share deferral period. LTIP awards are
subject to malus during the vesting period and clawback will apply for a period
of two years post-vest
The Remuneration Committee considers these time horizons appropriate as they
reflect the timing of the underlying awards as well as the nature of our business
and provide sufficient time for any potential circumstances to arise.
In line with the UK Corporate Governance Code 2024 requirements, the
Committee also confirms that there was no application of malus and clawback
provisions in the reporting period.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
190
DIRECTORS’ REMUNERATION REPORT
CONTINUED
DIRECTORS’ REMUNERATION POLICY
Our Remuneration Policy was last approved by shareholders at the 2025 AGM
where it received strong support (96.86%). The table below sets out a summary
of our Remuneration Policy for Executive and Non-Executive Directors as well as
its proposed implementation for FY27. Our full Remuneration Policy can be found
in our Annual Report and Accounts 2025.
Implementation for FY27 for Executive Directors
The CEO has been with the business since 2015 and has elected not to take
an annual pay raise at any time during his tenure. As a result, his remuneration,
in particular the level of his base salary, has fallen to the lower end of market
compared to other companies of a similar size and complexity.
The Remuneration Committee’s policy for any new Executive Director would be
to target fixed pay and target total pay at around the market median, with incentive
opportunities between median and upper quartile for exceptional performance.
Element Implementation for FY27
Salary
The Executive Directors elected not to receive a salary
increase with the salary budget focused on providing
increases to lower paid workers.
Base salary levels for FY27 therefore remain at:
– CEO: £500,000
– CFO: £380,000
Salary reviews for all colleagues take place in November.
Pension
The CEO and CFO have chosen to waive their employer
pension contributions.
Benefits
Market standard benefits.
The CFO has chosen to waive his car allowance.
Annual bonus
No changes to opportunity levels:
– CEO: 150% of salary
– CFO: 125% of salary
For FY27, the annual bonus will continue to be 100%
based on Adjusted EBIT and the ESG underpin will continue
to apply.
The ESG underpin will inform the Committee’s decision
of whether or not to apply a downwards adjustment of
up to 10% to the formulaic FY27 annual bonus outcome
in order to take into account the wider ESG performance
of the Group.
Two-thirds will be paid out in cash and one-third deferred
into shares for any Executive Director whose shareholding
guidelines have not been met. Where an Executive Director
has met their shareholding guideline, the annual bonus will be
paid fully in cash.
Both Executive Directors currently meet their shareholding
guidelines so any annual bonus earned will be paid out fully
in cash.
Element Implementation for FY27
LTIP
No changes proposed to opportunity levels:
– CEO: 200% of salary
– CFO: 175% of salary
LTIP awards, granted annually, will continue to be based 80%
on a three-year cumulative Adjusted EPS and 20% on
three-year average ROCE.
The payouts under the LTIP for levels of performance are
as follows:
– Threshold: 20% of max
– Target: 60% of max
– Max: 100% of max
with straight-line vesting between these points.
Targets are as follows:
– Adjusted EPS: 157.1p (Threshold); 165.6p (Target);
174.0p (Ma ximum)
– ROCE: 17.1% (Threshold); 18.0% (Target); 18.9%
(Maximum)
Shareholding
guidelines
The minimum shareholding requirement for Executive
Directors is 200% of salary, which can be built up within five
years of appointment.
Implementation for FY27 for Non-Executive Directors
Element Implementation for FY27
Chair and
Non-Executive
Director fees
A comprehensive benchmarking exercise was carried out by
Deloitte in FY26 and an increase of 10% for the Chair and
3% for the Non-Executive Directors was approved effective
from May 2025.
– Chair £209,000
– NED base fee £51,500
– Senior Independent Director fee £10,000
– Committee Chair fee £10,300
– Audit & Risk Committee, Remuneration Committee,
ESG Committee membership fee £5,150
– Nomination Committee membership fee £2,575
No increase to Non-Executive Director or Chair fees has
been determined at this time but will continue to be kept
under review.
SUMMARY REMUNERATION POLICY
STRATEGIC REPORT FINANCIAL STATEMENTS
191
GOVERNANCE REPORT
SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED)
The table below sets out the single total figure of remuneration and breakdown for each Director in respect of FY26. Figures provided have been calculated in
accordance with the UK disclosure requirements: The Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2019
(Schedule 8 to the Regulations).
Name Period
Salary/fees
£
Taxable
benefits
1
£
Bonus
2
£
LTI P
3
£
Pension
4
£
Other
£
Total
£
Total fixed
remuneration
£
Total variable
remuneration
£
Executive Directors
Brian Duffy FY26 500,000 73,793 750,000 – –
–
1,323,793 573,793 750,000
FY25 500,000 28,771 181,500 – –
–
710,271 528,771 181,500
Anders Romberg FY26 380,000 20,237 475,000 – –
–
875,237 400,237 475,000
FY25 380,000 6,17 7 114,950 – – –
501,127
386,177
114,950
Non-Executive Directors
6
Ian Carter
FY26 209,000 6,894 n/a n/a n/a
n/a
215,894 215,894 n/a
FY25 190,000 8,577 n/a n/a n/a
n/a
198,577 198,577 n/a
Tea Colaianni MBE
5
FY26 89,975 – n/a n/a n/a
n/a
89,975 89,975 n/a
FY25 82,500 – n/a n/a n/a
n/a
82,500 82,500 n/a
Paul Edgecliffe-Johnson
7
FY26 14,456 – n/a n/a n/a
n/a
14,456 14,456 n/a
FY25 – – – – –
–
– – –
Baroness (Rosa)
Monckton MBE
FY26 74,675 187 n/a n/a n/a
n/a
74,862 74,862 n/a
FY25 72,500 283 n/a n/a n/a
n/a
72,783 72,783 n/a
Chabi Nouri FY26
63,038 2,248 n/a n/a n/a
n/a
65,286 65,286 n/a
FY25 60,000 1,301 n/a n/a n/a n/a 61,301 61,301 n/a
Robert Moorhead
8
FY26 59,740 123 n/a n/a n/a
n/a
59,863 59,863 n/a
FY25 72,500 155 n/a n/a n/a
n/a
72,655 72,655 n/a
1 Taxable benefits for Executive Directors includes one or more of: private healthcare; accommodation when attending their usual place of work; company car (including private fuel); or a car
allowance. Healthcare provision for Executive Directors was enhanced effective 23 December 2024. Taxable benefits for Non-Executive Directors includes reimbursement for travel and
accommodation costs.
2 For FY26 the annual bonus is paid in cash as the Executives have met the relevant minimum shareholding requirement. For FY25, two-thirds in cash and one-third in shares, with the portion deferred
into shares subject to continued employment for three years but with no further performance conditions attached.
3 The FY24 LTIP award will vest at 0% of maximum due to the performance conditions not being met.
4 The CEO and CFO waive their employer pension contributions.
5 Tea Colaianni MBE received a £5,000 payment for acting as the Interim Chair of the Audit & Risk Committee for the period from 19 November 2025 to 28 February 2026.
6 Non-Executive Director fees include fees in respect of committee meetings.
7 Paul Edgecliffe-Johnson was appointed as a Director of the Company and member of the Board Committees from 19 February 2026 and as the Chair of the Audit & Risk Committee from 1 March 2026.
8 Rober t Moorhead resigned from the Board and the Board Committees on 19 November 2025.
ANNUAL REPORT ON REMUNERATION
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
192
ANNUAL BONUS OUTCOMES IN FY26 (AUDITED)
The maximum bonus opportunity for the CEO and CFO for FY25 was 150% and 125% of salary respectively.
Details of the targets used to determine bonuses in respect of FY26 and the extent to which they were satisfied are shown in the table below:
Performance
condition Weighting
Threshold
performance
required (20% of
max bonus)
Target
performance
required (50% of
max bonus)
Maximum
performance
required (100% of
max bonus)
Actual
performance
Percentage of
maximum
performance
achieved
Bonus value achieved
Brian Duffy Anders Romberg
Adjusted EBIT 100% £133m £140m £147m £154.8m 100%
£750,000 £475,000
Included in our bonus pay-out, in line with best practice and as disclosed in last year’s report, the Remuneration Committee assessed progress against our ESG Strategy
using the ESG underpin developed at the start of the year. The key highlights included:
– Caring for our Planet – We have reduced our combined Scope 1 and 2 location-based emissions year-on-year and grew sales of pre-owned watches
– Caring for our Colleagues – We have maintained strong engagement with our colleagues and have committed to training and development programmes including
apprenticeships
– Caring for our Communities – We have continued our support of charitable organisations including The Watches of Switzerland Group Foundation and increased
volunteering hours by 52%
Overall, the Committee considered that the progress against our ESG Strategy in FY26 was positive and we have delivered continuous improvements across our
environmental and social activities in FY26. The Committee therefore determined that the ESG underpin has been met and it has not resulted in any downwards
adjustment to the formulaic bonus outcome.
LONG-TERM INCENTIVE OUTCOMES IN FY26
LTIP awards granted in December 2023 were subject to pre-set performance conditions measured from FY24 to FY26. Details of the three-year cumulative Adjusted EPS
and three-year average ROCE targets attached to these awards and the extent to which they were satisfied are shown in the table below. EPS and ROCE performance
was below the stretching thresholds and therefore the FY24 award does not vest.
Performance condition Weighting
Threshold
performance required
(20% of max LTIP)
Target
performance required
(60% of max LTIP)
Maximum
performance required
(100% of max LTIP)
Actual
performance Vesting level
Cumulative Adjusted EPS 80% 189.9p 199.9p 209.9p 124.8p 0%
Average ROCE 20% 23.7% 24.9% 26.2% 18.8% 0%
LONG-TERM INCENTIVES AWARDED IN FY26 (AUDITED)
The table below sets out the details of the long-term incentive awards granted in FY26, where vesting will be determined according to the achievement of performance
conditions that will be tested based on three-year performance to the end of FY28.
Name
Award
type
Basis on which
award made
Shares
awarded
Face value of
shares awarded
Percentage of award
vesting at threshold
performance (%)
Maximum
percentage of face
value that could
vest (%)
Performance
conditions
Brian Duffy Nil-cost options 200% of annual salary 295,683 £1,000,000 20% 100% EPS (80%)
ROCE (20%)
Anders Romberg Nil-cost options 175% annual of salary 196,629 £665,000 20% 100% EPS (80%)
ROCE (20%)
The awards were granted on 4 September 2025. The face value is calculated with reference to a share price of £3.382, being the closing share price on 3 September 2025.
Awards are based 80% on three-year cumulative Adjusted EPS and 20% on three-year average ROCE over the period FY26 to FY28. Targets are as follows:
– Cumulative Adjusted EPS: 133p (Threshold); 140p (Target); 147p (Maximum)
– Average ROCE: 16.5% (Threshold); 17.4% (Target); 18.3% (Maximum)
STRATEGIC REPORT FINANCIAL STATEMENTS
193
GOVERNANCE REPORT
DIRECTORS’ SHARE INTERESTS (AUDITED)
Name
Shares held directly
Deferred
shares not
subject to
performance
conditions
LTI P vested
but not yet
exercised
LTIP interests
subject to
performance
conditions
Share options
exercised in
the year
LTIP interests
not subject to
performance
conditions
Shareholding requirement
Current
shareholding
Beneficially
owned % Salary
Shareholding
requirement
met?
Executive Directors
Brian Duffy 8 , 511,4 59 8 , 511, 459 74,982 – 53 7,112 – – 200% Yes
Anders Romberg 1, 507,089 1,507,089 10,684 – 357,179 12,853 – 200% Yes
Non-Executive Directors
Ian Carter 182,200 – – – – – – n/a n/a
Tea Colaianni MBE 32,947 – – – – – – n/a n/a
Baroness (Rosa) Monckton MBE 8,904 – – – – – – n/a n/a
Chabi Nouri 2,500 – – – – – – n/a n/a
Paul Edgecliffe-Johnson – – – – – – – n/a n/a
During February 2026, Anders Romberg exercised his deferred bonus share options which were granted in July 2022 and vested in July 2025. Anders exercised 12,853
options at a share price of £5.18, resulting in a gain of £66,643.
There have been no changes to shareholdings between 3 May 2026 and the date of this Report.
The market price of shares at 1 May 2026 was £5.12 and the range during FY26 was £3.19 to £5.39.
PAYMENTS TO PAST DIRECTORS AND PAYMENTS FOR LOSS OF OFFICE
On 19 November 2025, Robert Moorhead stepped down as a Non-Executive Director and Chair of the Audit & Risk Committee.
In addition to his accrued fees for the period up to his date of departure, in accordance with his letter of appointment dated 10 May 2019, Robert received a payment
of £18,668 in lieu of his fees as a Non-Executive Director for his three-month notice period.
REMUNERATION AND ALIGNMENT WITH PERFORMANCE
CEO pay ratio
Our CEO to employee pay ratios for FY20 to FY26 are set out in the table below:
Financial year Method used
25th percentile
pay ratio
50th percentile
pay ratio
75th percentile
pay ratio
FY26 (reported) Option A 48:1 42:1 32:1
FY25 (reported) Option A 27:1 24:1 19:1
FY24 (reported) Option A 37:1 32:1 25:1
FY23 (reported) Option A 144:1 124:1 92:1
FY22 (reported) Option A 206:1 174:1 128:1
FY21 (reported) Option A 61:1 51:1 37:1
FY20 (reported) Option A 317:1 262:1 179:1
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
194
DIRECTORS’ REMUNERATION REPORT
CONTINUED
Details of salary and total pay and benefits as required under the regulations are set out below:
CEO base salary: £500,000
CEO total pay and benefits: £1,323,793
Employee figures (£’000) Salary
Total pay and
benefits
25th percentile employee 35.3 41.0
50th percentile employee 28.5 31.2
75th percentile employee 24.9 27.6
The Company has used Option A to calculate the CEO pay ratio. The Company feels that using comparable single figure data ensures the most like for like comparison
of CEO pay against the pay levels of employees at the 25th, 50th and 75th percentiles. We have determined the individuals at the 25th, 50th and 75th percentiles as at
3 May 2026, the last day of the financial year.
The CEO pay ratio gap has increased during the year. This is influenced by a number of factors, a key influence is the fact that an annual bonus will be paid at maximum
this year whereas the bonus was paid at 24.2% of maximum last year.
The value of the LTIP vesting in FY26 is £nil due to the performance conditions not being met.
In addition, we expect the ratios could be fairly volatile for the following reasons:
– The CEO’s pay is made up of a greater proportion of incentive pay than for employees generally, and this leads to a higher degree of variability in his overall pay each year
– LTIPs are provided in shares, and therefore a change in share price over the three years changes the value of a long-term incentive award vesting in any given year
We recognise that the ratio is driven by the different structure of the pay of our CEO versus that of our colleagues generally, as well as the make-up of our workforce.
What is important from our perspective is that this ratio is influenced only by the differences in structure, and not by divergence in fixed pay between the CEO and
wider workforce. The Remuneration Committee reviews information about colleague pay, reward and progression policies of the Company and is comfortable that
the median pay ratio is consistent with these policies.
NOTES ON METHODOLOGY
In determining the quartile figures, the hourly rates were annualised using the same number of contractual hours as the CEO. Actual pay and benefits were calculated
for all UK colleagues at the snapshot date and subsequently ranked in order to identify the relevant person at each quartile. For the purpose of the calculations the
following elements of pay were included (if applicable) for all colleagues:
– Annual basic salary
– Private medical insurance cover
– Car or car allowance
– Employer pension contribution (noting that the CEO and CFO waive their employer pension contribution)
– Bonus and commission earned in the year in question
– LTIP value
– Management incentive plan value
STRATEGIC REPORT FINANCIAL STATEMENTS
195
GOVERNANCE REPORT
PERCENTAGE CHANGE IN DIRECTORS’ REMUNERATION
The table below shows how the percentage change in each Director’s salary/fees, taxable benefits and annual bonus from FY21 to FY26 compares with the average
percentage change in each of those components of pay for the UK-based employees of the Group as a whole.
The reporting regulations prescribe that all employees of the listed company, excluding Directors, should be included in the average employee calculation. However,
as the Watches of Switzerland Group PLC does not have any colleagues other than the two Executive Directors, no statutory disclosure can be provided in respect
of colleagues. Therefore, the Company has chosen to voluntarily disclose the information in the table below using UK full time colleagues as the comparator group;
this group was chosen on the basis that the majority of our workforce is UK-based.
Year-on-year changes in pay for Directors compared to the average UK colleague increase:
Name
FY21 to FY22 FY22 to FY23 FY23 to FY24 FY24 to FY25 FY25 to FY26
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Executive Directors
Brian Duffy 4.3% (0.6)% 4.3% 0% 6.9% (25.0)% 0% 1.2% (100.0)% 0% 14.2% 100% 0% 156. 5% 313.2%
Anders Romberg
1
(30.4)% (27.7)% (30.4)% n/a n/a n/a 100.0% 100.0% n/a 0.8%
1
(27. 5)% 100% 0% 227. 6% 313 . 2%
Non-Executive Directors
Ian Carter 0% 0% n/a 0% 28.7% n/a 0% 128.2% n/a 0% (56.7)% n/a 10.0% (19.6)% n/a
Tea Colaianni MBE 10.0%
2
0% n/a 1.0%
2
100.0% n/a 0% (83.0)% n/a 0% (10 0.0)% n/a 9.1%
5
0% n/a
Paul Edgecliffe-Johnson n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 100.0% n/a n/a
Baroness (Rosa) Monckton MBE 18.3%
2
0% n/a 2.4%
2
0% n/a 0% 0% n/a 0% 100.0% n/a 3.0% (33.8)% n/a
Chabi Nouri n/a n/a n/a 100.0% 100.0% n/a 1.4%
3
(18.0)% n/a 0% (66.2)% n/a 5.1% 72.8% n/a
Robert Moorhead 18.8%
2
0% n/a 1.2%
2
0% n/a 0% 0% n/a 0% 100.0% n/a (17.6)% (20.6)% n/a
Average percentage increase
for UK employees
9% (15. 5)% 35% 9.1% (14.4)% (48.3)% 12.5% 15.9% (10 0.0)% 5.0% (10.0)%
4
100% 3.1% 4.8% 68.5%
1 Anders Romberg retired as CFO and as an Executive Director of the Board with effect from 1 January 2022. On 12 May 2023, he rejoined the Board and replaced Bill Floydd as CFO.
The increased salary in comparison to FY24 is as a result of the annualisation of his remuneration.
2 Changes in pay for the Non-Executive Directors related to the introduction of the ESG Committee par t way through FY22. There have been no increases in Non-Executive Director fees during FY22.
3 Chabi Nouri was appointed as an independent Non-Executive Director with effect from 1 May 2022. The increase in FY24 was as a result of the annualisation of her remuneration.
4 The reduction in taxable benefits is due to a move to more efficient fleet cars.
5 Tea Colaianni MBE received a £5,000 payment for her role as Interim Chair of Audit & Risk Committee between 19 November 2025 and 28 February 2026.
TOTAL SHAREHOLDER RETURN
The graph below shows the Group’s TSR performance (share price plus dividends
paid) compared with the performance of the FTSE 250 (excluding Investment
Trusts) Index and the FTSE 350 General Retailers, since the Company’s IPO
in June 2019.
These indices have been selected because the Company believes that the
constituent companies are the most appropriate for this comparison for the
Group. This chart will be built out in future reports until it provides a picture
of performance over ten years.
0
50
100
150
350
300
250
200
400
Watches of Switzerland Group PLC FTSE 250 (ex. Investment Trusts)
FTSE 350 General Retailers
20202019 2021 20232022
Rebased TSR from 30/05/2019
202620252024
CEO REMUNERATION SINCE IPO
The Remuneration Committee does not believe that the remuneration paid
whilst the Company was private is relevant to the remuneration following IPO.
As such, this table shows remuneration from FY20, the first financial year when
the Company was listed. We will add to this table each year until a full ten-year
history is shown.
Financial year
Single figure of
remuneration
% of max annual
bonus earned
% of max LTIP
awards vesting
FY26 – Brian Duffy £1,323,793 100% 0%
FY25 – Brian Duffy £710,271 24% 0%
FY24 – Brian Duffy £872,960 0% 100%
FY23 – Brian Duffy £3,329,581 75% 100%
FY22 – Brian Duffy £4,547,352 100% 100%
FY21 – Brian Duffy £1,221,337 100% n/a
FY20 – Brian Duffy excluding
one-off IPO award
£6,512,387
(£512,388)
0% n/a
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
196
DIRECTORS’ REMUNERATION REPORT
CONTINUED
RELATIVE IMPORTANCE OF SPEND ON PAY
The table below shows the percentage change in total colleague pay expenditure and shareholder distribution (i.e. dividends and share buybacks) from 28 April 2025
to 3 May 2026.
Relative importance of the spend on pay
FY26
£m
FY25
£m % change
Colleague remuneration £191.7 £170.1 12.7%
Distribution to shareholders (share buyback) £12.9 £12.1 6.6%
The Company commenced a share buyback programme on 10 March 2025 which was completed on 18 June 2025 (refer to note 21 to the Consolidated Financial
Statements for further detail).
APPROVAL OF THE DIRECTORS’ REMUNERATION REPORT
The FY26 Directors’ Remuneration Report will be subject to a shareholder vote at the 2026 AGM. The table below sets out the actual voting in respect of resolutions
regarding remuneration at previous Annual General Meetings.
Votes for % for Votes against % against Total votes Votes withheld
Approve the 2025 Directors’ Remuneration Policy (2025 AGM) 155,556,527 96.86% 5,037,376 3.14% 160,593,903 1,326,929
Approve the 2025 Directors’ Remuneration Report (2025 AGM) 156 ,518, 279 96.67% 5,388,855 3.33% 161,907,134 13,698
Approve the 2024 Directors’ Remuneration Report (2024 AGM) 175,413,162 93.71% 11, 7 76 ,624 6.29% 187,189,786 21,340
Approve the 2022 Directors’ Remuneration Policy (2023 AGM) 189,914, 532 98.15% 3,583,126 1.85% 193,685,453 187,795
ROLE OF THE REMUNERATION COMMITTEE
The Committee complies with the UK Corporate Governance Code 2024 in terms of composition and Terms of Reference. The Committee’s Terms of Reference, which
are reviewed annually, are available on the Group’s website at thewosgroupplc.com.
The Committee’s responsibilities are to:
– Determine Remuneration Policy for the Company Chair, Executive Directors, the Company Secretary and General Counsel and other members of the Senior
Management as designated
– Determine remuneration packages for the Company Chair, Executive Directors, the Company Secretary and General Counsel and other members of the Senior
Management as designated. No Director plays a part in any decision about their own remuneration
– Review the appropriateness of the Remuneration Policy on an ongoing basis and make recommendations to the Board on appropriate changes
– Obtain up-to-date comparative market information and appoint remuneration consultants as required to advise or obtain information
– Approve the design of, and set targets for, performance-related incentives across the Group
– Oversee any major changes to benefits for employees
– Oversee wider workforce pay practices and incentive arrangements
– Ensure that failure and excessive risk-taking are not rewarded
None of the Committee members have any personal financial interest (other than as a shareholder) in the decisions made by the Committee, any conflict of interest
arising from cross-directorships, or day-to-day involvement in running the business.
WHO SUPPORTS THE COMMITTEE?
Internal
Internal support is provided by the Company Secretary and General Counsel and the Executive Director HR, whose attendance at Committee meetings is by invitation
from the Remuneration Committee Chair, to advise on specific questions raised by the Remuneration Committee and on matters relating to the performance and
remuneration of the Senior Management team. No Director was present for any discussions that related directly to their own remuneration.
External
The Committee appointed Deloitte LLP as independent adviser to the Committee following an independent selection process. Fees paid to Deloitte LLP in relation
to remuneration services provided to the Committee for FY26 were £76,500, which were charged on a time and materials basis. Deloitte LLP is a member of the
Remuneration Consultants’ Group, and as such chooses to operate pursuant to a code of conduct that requires remuneration advice to be given objectively and
independently. Deloitte did not provide any other services to the Group during the year under review, and there are no connections between Deloitte LLP and individual
Directors to be disclosed. The Committee is satisfied that the advice provided by Deloitte LLP in relation to remuneration matters is objective and independent.
TEA COLAIANNI MBE
CHAIR OF THE REMUNERATION COMMITTEE
13 July 2026
STRATEGIC REPORT FINANCIAL STATEMENTS
197
GOVERNANCE REPORT
Statement of Engagement with Colleagues
The Group has chosen to provide information in relation to the Statement of
Engagement with Colleagues elsewhere in this report. This is cross referenced
in the table below:
Topic Section of the report Page
How the Directors engage with
colleagues
Section 172(1) Statement Board activity 76
How the Group provides colleagues
with information on matters of concern
to them as colleagues
Environment, Social and Governance 80
How the Group consults with and
considers colleague feedback
Environment, Social and Governance 80
Non-Financial Information and
Sustainability Information Statement
Non-Financial and Sustainability
Information Statement
75
Business relationships
Topic Section of the report Page
Foster the Company’s business
relationships
Section 172(1) Statement 76
Principal decisions affecting suppliers,
clients and others taken by the
Company during the financial year
Section 172(1) Statement Board
activity
76
PRINCIPAL ACTIVITIES
The principal activity of the Group is the sale ofluxury watches and jewellery.
ARTICLES OF ASSOCIATION
In accordance with the Companies Act 2006, the Articles of Association
(the ‘Articles’) may only be amended by a special resolution of the Company’s
shareholders at a general meeting.
AGM
The 2026 AGM of the Company will be held at 2.30pm on 3 September 2026,
at our offices at 36 North Row, London W1K 6DH. The Notice of AGM is given,
together with explanatory notes, in the booklet which accompanies this Annual
Report and Accounts.
BOARD OF DIRECTORS
Ian Carter
Brian Duffy
Anders Romberg
Tea Colaianni MBE
Paul Edgecliffe-Johnson (appointed 19 February 2026)
Baroness (Rosa) Monckton MBE
Chabi Nouri
Robert Moorhead (resigned 19 November 2025)
Except as stated above, all Directors have served throughout the year.
Fullbiographies of the current Directors can be found on pages 156 and 157.
The Directors present their report, together with the audited Consolidated
Financial Statements of the Group and of the Company, for the financial period
ended 3 May 2026. The Directors’ Report, prepared in accordance with the
requirements of the Companies Act 2006, the UK Listing Rules and the
Disclosure and Transparency Rules, comprises the Governance Report
(pages 151 to 197), the Directors’ Report (pages 198 to 201) and the
Shareholder Information (page 266).
STATUTORY INFORMATION
Topic Section of the report Page(s)
Important events impacting the business Strategic Report 6 to 147
Financial instruments Note 23 to the Consolidated
Financial Statements
248
Colleague disabilities Environment, Social and Governance 199
Modern Slavery Statement Environment, Social and Governance 36
Greenhouse gas emissions,
energyconsumption and energy-
efficient action
Environment, Social and Governance 122
Carbon reporting Environment, Social and Governance 122
Risk management Risk Management 138
S172(1) Companies Act 2006 Strategic Report 76 to 79
Diversity and ethnicity Corporate Governance Report
Nomination Committee Report
169
173
Directors’ interests in shares Remuneration Committee Report 194
Directors’ long-term incentive
shareawards
Remuneration Committee Report 194
Going concern Going Concern and
ViabilityStatement
148
149
Likely future developments Strategic Report 6 to 147
Research and Development Strategic Report 6 to 147
Branches – A list of our subsidiaries,
associates and joint ventures
Financial Statements 258
DIRECTORS’ REPORT
WATCHES OF SWITZERLAND GROUP PLC
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
198
APPOINTMENT AND REMOVAL OF A DIRECTOR
The appointment, reappointment and replacement of Directors is governed
bythe Articles, the UK Corporate Governance Code 2024 (the ‘Code’), the
Companies Act 2006 and related legislation. The Code recommends that all
directors of publicly listed companies stand for election every year. At the 2025
AGM, all members of the Board stood for election or re-election and were duly
elected. At the 2026 AGM, Paul Edgecliffe-Johnson will be offering himself for
election as he was appointed as a Director since the last AGM. All other
Directors will be offering themselves for re-election. The Board is satisfied that
each Non-Executive Director, offering themselves for election or re-election,
is independent in both character and judgement, and that their experience,
knowledge and other business interests enable them to contribute significantly
to the work and balance of the Board.
A Director may be appointed to the Board by:
(i) Ordinary resolution of the shareholders
(ii) Board approval following recommendation by the Nomination Committee
(iii) Ordinary resolution if the Director chooses to seek re-election at a
general meeting
Directors may appoint a Director to fill a vacancy or as an additional Director,
provided that the individual retires at the next AGM; if they are to continue,
they must offer themselves for election. A Director must vacate office in certain
circumstances as set out in the Company’s Articles and may be removed by
ordinary resolution provided special notice of that resolution has been given.
POWERS OF THE DIRECTORS
Subject to the Articles, the Companies Act 2006 and any directions given by
the Company by special resolution and any relevant statutes and regulations, the
business of the Company will be managed by the Board which may exercise all the
powers of the Company. Specific powers relating to the allotment and issuance of
ordinary shares and the ability of the Company to purchase its own securities are
also included within the Articles, and such authorities may be submitted for
approval by the shareholders at the AGM each year.
DIRECTORS’ INTERESTS AND CONFLICTS OF INTEREST
The Directors’ interests in, and options over, ordinary shares in the Company are
shown in the Directors’ Remuneration Report on Remuneration on page 194.
In line with the requirements of the Companies Act 2006, Directors have a
statutory duty to avoid situations in which they have, or may have, interests that
conflict with those of the Company unless that conflict is first authorised by the
Board. The Company has procedures in place for managing conflicts of interest.
The Company’s Articles contain provisions to allow the Directors to authorise
potential conflicts of interest, so that if approved, a Director will not be in breach
of his/her duty under company law. In line with the requirements of the
Companies Act 2006, each Director has notified the Company of any situation
in which they have, or could have, a direct or indirect interest that conflicts, or
possibly may conflict, with the interests of the Company (a situational conflict).
Directors have a continuing duty to update any changes to their conflicts of
interest, and a note is then made of that update.
During the year, the conflicts of interest procedures operated effectively.
DIRECTORS’ INDEMNITIES
Directors’ and Officers’ insurance has been established for all Directors and
Officers to provide cover against their reasonable actions on behalf of the
Company. The Company also indemnifies the Directors under a qualifying
indemnity for the purposes of Section 236 of the Companies Act 2006. This
indemnity contains provisions that are permitted by the director liability provisions
of the Companies Act 2006 and the Company’s Articles.
EQUAL OPPORTUNITIES AND EMPLOYMENT OF PERSONS WITH
DISABILITIES
The Group has policies on equal opportunities and the employment of persons
with disabilities which, through the application of fair employment practices, are
intended to ensure that individuals are treated equitably and consistently
regardless of age, race, creed, colour, gender, marital or parental status, sexual
orientation, religious beliefs and nationality. Applications for employment by
persons with disabilities are always fully considered, bearing in mind the respective
aptitudes and abilities of the applicant concerned. In the event of colleagues
becoming disabled, every effort is made to ensure their employment with the
Group is continued and that the appropriate training is arranged. It is the policy of
the Group that the training, career development and promotion of a person with
disabilities should, as far as possible, be identical to that of a person who does not
have a disability.
DIRECTORS’ STATEMENT OF RESPONSIBILITY IN RESPECT OF THE
ANNUAL REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and Accounts
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year that give a true and fair view of the state of affairs of the Group
and the Company as at the end of the financial year, and of the profit or loss
of the Group for the financial year. Under that law the Directors have prepared
the Group Financial Statements in accordance with UK adopted international
accounting standards and have elected to prepare the Company’s Financial
Statements in accordance with United Kingdom Generally Accepted Accounting
Practice, including FRS 102 (The Financial Reporting Standard applicable in the
United Kingdom and the Republic of Ireland) and the Companies Act 2006.
Under company law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of affairs of
the Group and the Company and of the profit or loss of the Group for that period.
In preparing the Annual Report and Accounts, the Directors are required to:
– Select suitable accounting policies in accordance with IAS 8 ‘Accounting Policies’,
Changes in Accounting Estimates and Errors (or in respect of the Parent
Company Financial Statements, Section 10 of FRS 102) and then apply
them consistently
– Make judgements and accounting estimates that are reasonable and prudent
– Present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information
– Provide additional disclosures when compliance with the specific requirements
in IFRSs (or in respect of the Parent Company Financial Statements, FRS 102) is
insufficient to enable users to understand the impact of particular transactions,
other events and conditions on the Group’s financial position and financial
performance
– For the Group Financial Statements, state whether International Financial Reporting
Standards in conformity with the requirements of the Companies Act 2006 and UK
adopted international accounting standards have been followed, subject to any
material departures disclosed and explained in the Financial Statements
– For the Parent Company Financial Statements, state whether applicable UK
accounting standards, FRS 102, have been followed, subject to any material
departures disclosed and explained in the Parent Company Financial Statements
– Prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Group and the Company will continue
in business
STRATEGIC REPORT FINANCIAL STATEMENTS
199
GOVERNANCE REPORT
DIVIDENDS
The Directors do not recommend the payment of a dividend.
POLITICAL DONATIONS
The Group made no political donations and incurred no political expenditure
during the year.
SHARE CAPITAL AND SHAREHOLDER VOTING RIGHTS
The share capital of the Company at 3 May 2026 was as follows:
Number
of shares Nominal value
Allotted, called up and fully paid ordinary
shares of £0.0125 each
233,301,622 £2,916,270
All shareholders are entitled to attend and speak at the general meetings of
the Company, appoint proxies, receive any dividends, exercise voting rights
and transfer shares without restriction. On a show of hands at a general meeting,
every member present in-person shall have one vote, and on a poll, every
member present in-person or by proxy shall have one vote for every ordinary
share held. There are no known arrangements that may restrict the transfer
of shares or voting rights.
Under the Company’s Share Incentive Plan, Trustees hold shares on behalf of
colleague participants. The Trustees will only vote on those shares, and receive
dividends on those shares, should the Company pay dividends in the future, that
aparticipant beneficially owns, in accordance with the participant’s wishes.
An Employee Benefit Trust also operates which has discretion to vote on any
shares it holds as it sees fit, except any shares participants own beneficially,
in which case the Trustee will only vote on such shares as per a participant’s
instructions. The Trustee of the Employee Benefit Trust has waived its right
to dividends on all shares within the Trust.
The Company is not aware of any other dividend waivers or voting restrictions
inplace.
RESTRICTIONS ON THE TRANSFER OF SECURITIES
The Articles do not contain any restrictions on the transfer of ordinary shares
in the Company other than the usual restrictions applicable where any amount is
unpaid on a share. However, restrictions are imposed by laws and regulations such
as the prohibition on insider trading and the requirements of the UK Listing Rules
whereby PDMR’s dealings need to be approved. The Company has adopted a
Share Dealing Code to regulate PDMR dealings and has extended the scope
of that Code to include certain other colleagues.
AUTHORITY TO ALLOT SHARES
Under the Companies Act 2006, the Directors may only allot shares if authorised
to do so by the shareholders in a general meeting.
SHAREHOLDER AUTHORITY TO PURCHASE OWN SHARES
At the Company’s 2025 AGM the Company’s shareholders passed a shareholder
resolution granting the Company authority to purchase its own shares pursuant to
Sections 693 and 701 of the Companies Act 2006.
The authority is limited to an aggregate maximum number of 23,330,162 ordinary
shares, representing 10% of the Company’s issued share capital, excluding treasury
shares. The maximum price which may be paid for an ordinary share will be an
amount which is not more than the higher of (i) 5% above the average of the middle
market quotation for an ordinary share as derived from the London Stock Exchange
Plc’s Daily Official List for the five business days immediately preceding the day on
which the ordinary share is contracted to be purchased; and (ii) the higher of the
price of the last independent trade and the highest current independent bid on the
trading venue where the purchase is carried out (in each case, exclusive of expenses).
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group’s and the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the Financial Statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report
and Corporate Governance Statement that comply with that law and those
regulations. The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Company’s website.
Each of the Directors, whose names and functions are listed on pages 156
and 157 confirms that, to the best of their knowledge:
– That the Group Financial Statements, which have been prepared in accordance
with UK adopted international accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the Group
– That the Annual Report and Accounts 2026, including the Strategic Report,
include a fair review of the development and performance of the business and
the position of the Company and undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face
– That they consider the Annual Report and Accounts 2026, taken as a whole,
are fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company’s position, performance, business model
and strategy
COMPANY SECRETARY
Laura Battley is the Company Secretary of the Watches of Switzerland Group
PLC and its trading UK Group subsidiaries who can be contacted via the
Company’s Registered Office.
AUDITOR REAPPOINTMENT
Having been appointed as the External Auditor in 2019, Ernst & Young LLP has
expressed its willingness to continue in its capacity as independent External
Auditor of the Company. The Directors are recommending a resolution in favour
of this reappointment and a resolution for authorisation of Auditor remuneration
at the forthcoming AGM.
DIRECTORS’ REPORT
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
200
The authority shall, unless varied, revoked or renewed, expire at the end of the
Company’s 2026 AGM or, if earlier, at close of business on 3 December 2027,
when aresolution to renew the authority to purchase Company shares will
be submitted toshareholders.
During the financial period, 2,966,221 ordinary shares of £0.0125 each
(representing 1.3% of the ordinary shares in issue at 3 May 2026) were purchased
bythe Company for a total consideration of £12,994,335, including expenses, and
subsequently cancelled.
There are currently no shares held in Treasury.
The purpose of the share buyback programme was to reduce the capital
of theCompany.
FINANCIAL INSTRUMENTS
Information regarding the Company’s use of financial instruments, financial risk
management objectives and policies can be found in the Risk Management section
of the Strategic Report on pages 138 to 147 and note 23 of the Consolidated
Financial Statements.
CHANGE OF CONTROL
There are no agreements between the Company and its Directors or colleagues
providing for compensation for loss of office or employment (whether through
resignation, purported redundancy or otherwise) by reason of a takeover bid.
Details concerning the impact on the annual bonus (cash and deferred share
awards) and LTIPs held by Directors and Senior Management in the event of a
change of control are set out in the Remuneration Policy which was approved
by shareholders at the AGM in 2025.
Various agreements that the Group has entered into with third parties, including
key distribution agreements with luxury watch and jewellery brands, lease
agreements, as well as contracts with third-party service providers, provide such
parties with a right to terminate the agreement in the event of a change of control.
The £225.0 million multicurrency revolving loan facility entered into on 9 May
2023 includes certain customary mandatory prepayment and cancellation events,
including mandatory prepayments on a change of control of either Watches of
Switzerland Group PLC or Jewel UK Midco Limited if a lender so requests after
aperiod of negotiations.
Additionally the £150.0 million multicurrency term and revolving facilities
agreement entered into on 13 December 2024 (of which the £100.0 million
term loan element is drawn down as $125.0 million), includes certain customary
mandatory prepayment and cancellation events, including mandatory
prepayments on a change of control of either Watches of Switzerland Group PLC
or Jewel UK Midco Limited if a lender so requests after a period of negotiations.
SIGNIFICANT SHAREHOLDERS AND INTEREST IN VOTING RIGHTS
The table below shows the notifiable interests in the Company’s ordinary issued
share capital, as at the date of this report. As notified in accordance with the
Disclosure Guidance and Transparency Rules and information provided directly
to the Company, the table below shows holdings which represent 3% or more
of the Company’s issued ordinary share capital.
These holdings may have changed since the Company was notified. However,
notification of any change is not required until the next notifiable threshold
iscrossed.
Notifiable interest
Voting
rights
% of capital
disclosed
Nature of holding as per
disclosure
BlackRock, Inc. 11, 7 72 , 6 53 5.04 – Indirect interest 4.68%
– Securities Lending 0.03%
– CFD 0.33%
The Capital Group
Companies, Inc.
11, 69 4 ,4 50 5.01 – Indirect interest 5.01%
Brian Duffy 7,696,999 3.21 – Direct interest 3.21%
Alberta Investment
Management Corporation
7,075,000 3.00 – Direct interest 3.00%
TRANSACTIONS WITH RELATED PARTIES
Refer to note 24 on page 252 of the Consolidated Financial Statements for details
of related party transactions in the year.
APPROVAL OF THE ANNUAL REPORT AND ACCOUNTS
The Strategic Report on pages 6 to 149, the Directors’ Report on pages 198 to
201 and the Corporate Governance Report were approved by the Board on
13July2026.
Approved by the Board and signed on its behalf.
LAURA BATTLEY
COMPANY SECRETARY
13 July 2026
STRATEGIC REPORT FINANCIAL STATEMENTS
201
GOVERNANCE REPORT
FINANCIAL
STATEMENTS
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
202
204 Independent Auditor’s Report
210 Consolidated Income Statement
211 Consolidated Statement of Comprehensive Income
212 Consolidated Balance Sheet
213 Consolidated Statement of Changes in Equity
214 Consolidated Statement of Cash Flows
215 Notes to the Consolidated Financial Statements
255 Company Balance Sheet
256 Company Statement of Changes in Equity
257 Notes to the Company Financial Statements
261 Glossary
266 Shareholder Information
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
203
OPINION
We have audited the Financial Statements of Watches of Switzerland Group
PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the 53-week
period ended 3 May 2026 which comprise:
Group Parent Company
Consolidated Income Statement for the
53-weeks ended 3 May 2026
Company Balance Sheet as at
3 May 2026
Consolidated Statement of Comprehensive
Income for the 53-weeks ended 3 May 2026
Company Statement of Changes
in Equity as at 3 May 2026
Consolidated Balance Sheet as at
3 May 2026
Related notes C1 to C10 to the Financial
Statements including a summary of
significant accounting policies
Consolidated Statement of Changes in
Equity as at 3 May 2026
Consolidated Statement of Cash Flows for
the 53-weeks ended 3 May 2026
Related notes 1 to 27 to the Financial
Statements, including material accounting
policy information
The financial reporting framework that has been applied in the preparation of
the Group Financial Statements is applicable law and UK adopted international
accounting standards. The financial reporting framework that has been applied
in the preparation of the Parent Company Financial Statements is applicable law
and United Kingdom Accounting Standards, including FRS 102 ‘The Financial
Reporting Standard applicable in the UK and Republic of Ireland’ (United
Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the
Financial Statements section of our report. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Group and Parent in accordance with the ethical
requirements that are relevant to our audit of the Financial Statements in the
UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group or the Parent Company and we remain independent
of the Group and the Parent Company in conducting the audit.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the Financial Statements, we have concluded that the directors’ use
of the going concern basis of accounting in the preparation of the Financial
Statements is appropriate. Our evaluation of the directors’ assessment of the
Group and Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
– Obtaining management’s going concern assessment, which covers the period
to 31 October 2027, and includes details of facilities available, forecast covenant
calculations, and the results of management’s downside sensitivity scenarios and
reverse stress test;
– Testing management’s model for clerical accuracy;
– Understanding and assessing the design effectiveness of controls over the
Directors’ going concern assessment and management’s forecasting process;
– Obtaining the agreements in respect of the Group’s financing arrangements
and confirming the maturity dates and covenants that are required to be met;
– Challenging the reasonableness of forecasts and key assumptions underpinning
the going concern model, which are based on the FY27 base case forecast
approved by the Board in May 2026 plus a further six-month period which
assumes no additional sales or profit uplift. Our procedures included assessing
changes from the prior period, ensuring the forecast appropriately reflect the
Group’s climate change commitments, comparing to external forecasts for the
sector and considering whether there was any indication of management bias,
including consideration of any contrary indicators;
– Performing sensitivity analysis to challenge management’s assessment of the
impact of climate change based on their TCFD disclosures;
– Considering management’s historical forecast accuracy by comparing actual
performance to that budgeted;
– Comparing actual performance and liquidity post year-end to that budgeted;
– Reperforming forecast covenant calculations and comparing to the requirements
under the facility agreements;
– Assessing the Group’s severe but plausible downside scenarios which factor in
the potential effect of a reduction in sales due to reduced consumer confidence,
and macroeconomic factors. This assessment included challenging the
assumptions and whether the quantum of the impact of the downside scenarios
is sufficiently severe;
– Challenging whether the scenarios modelled appropriately consider the Group’s
principal risks and uncertainties;
– Assessing the mitigating factors available to management should downside
scenarios be worse than anticipated, including challenging whether these are
realistic and controllable;
– Assessing the reverse stress tests used by the Directors to determine the risk to
liquidity and covenant compliance. Including performing appropriate sensitivity
analysis and assessing the likelihood of this occurring;
– Performing a suite of procedures, including management enquiry to identify
events or conditions beyond the period of assessment that may cast significant
doubt on the entity’s ability to continue as a going concern; and
– Assessing the going concern disclosures in the Financial Statements to assess
whether they are in accordance with regulatory and legislative requirements.
Our key observations are that the director’s assessment forecasts that the Group
will maintain sufficient liquidity and comply with all covenants throughout the
going concern assessment period in both the base case and plausible downside
scenarios. The directors consider that the possibility of the reverse stress
scenario occurring to be remote taking into account liquidity and covenant
headroom, as well as mitigating actions within the Group’s control and the fact
that this would represent a significant reduction in sales and margin from prior
financial years.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Group and Parent Company’s ability to continue as
a going concern for a period to 31 October 2027.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF WATCHES OF SWITZERLAND GROUP PLC
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
204
In relation to the Group and Parent Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the Financial
Statements about whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going
concern are described in the relevant sections of this report. However, because
not all future events or conditions can be predicted, this statement is not a
guarantee as to the Group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope – We performed an audit of the complete financial
information of three components and audit procedures on
specific balances for a further two components. We also
performed specified audit procedures on certain accounts
on one additional component. Centralised procedures were
performed on Cash, Loans and Borrowings, Taxation,
Pensions, Exceptional items, Leases, Equity and
Consolidation Adjustments
Key audit matters – Showroom asset impairment
– Inventory provision valuation
– Revenue recognition including the risk of management override
Materiality – Overall Group materiality of £7.1 million which represents
5% of profit before tax and exceptional items
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY
AND GROUP AUDITS
We have followed a risk-based approach when developing our audit approach
to obtain sufficient appropriate audit evidence on which to base our audit
opinion. We performed risk assessment procedures, to identify and assess risks
of material misstatement of the Group Financial Statements and identified
significant accounts and disclosures.
When identifying components at which audit work needed to be performed to
respond to the identified risks of material misstatement of the Group Financial
Statements, we considered our understanding of the Group and its business
environment, the potential impact of climate change, the applicable financial
framework, the Group’s system of internal control at the entity level, the existence
of centralised processes, applications and any relevant Internal Audit results.
We determined that centralised audit procedures can be performed on 15
components in the following audit areas: Cash, Loans and Borrowings, Taxation,
Pensions, Exceptional items, Leases and Equity.
We then identified five components as individually relevant to the Group due
to significant risks or an area of higher assessed risk of material misstatement
of the Group Financial Statements being associated with the components.
For those individually relevant components, we identified the significant
accounts where audit work needed to be performed at these components
by applying professional judgement, having considered the Group significant
accounts on which centralised procedures will be performed, the reasons
for identifying the financial reporting component as an individually relevant
component and the size of the component’s account balance relative to the
Group significant financial statement account balance.
We then considered whether the remaining Group significant account balances
not yet subject to audit procedures, in aggregate, could give rise to a risk of
material misstatement of the Group Financial Statements. We selected one
component of the Group to include in our audit scope to address these risks.
Having identified the components for which work will be performed,
we determined the scope to assign to each component.
Of the six components selected, we designed and performed audit procedures
on the entire financial information of three components (‘full scope components’).
For two components, we designed and performed audit procedures on
specific significant financial statement account balances or disclosures of
the financial information of the component (‘specific scope components’).
For two components, we performed specified audit procedures to obtain evidence
for one or more relevant assertions.
Our scoping to address the risk of material misstatement for each key audit
matter is set out in the Key audit matters section of our report.
INVOLVEMENT WITH COMPONENT TEAMS
In the prior year, we had one component team. However, given increased
centralisation of accounting for the component, it was deemed appropriate for
the procedures on this component to be performed by the Group audit team.
Therefore, all audit work performed for the purposes of the audit was
undertaken by the Group audit team.
CLIMATE CHANGE
Stakeholders are increasingly interested in how climate change will impact
Watches of Switzerland Group PLC. The Group has determined that the most
significant future impacts from climate change on its operations will be from the
increased frequency of extreme weather events which may disrupt retail
showrooms, offices and distribution centres as well as the supply chain; higher
insurance premiums across the businesses operations; the increasing cost of
energy and potential regulatory mechanisms on direct carbon emissions; the
Group’s reliance on premium raw materials; and potential reputational damage
resulting from increased scrutiny from stakeholders and investors. These are
explained on pages 112 to 119 in the required Task Force On Climate-Related
Financial Disclosures and on pages 142 to 147 in the principal risks and
uncertainties. They have also explained their climate commitments on pages 102
to 105. All of these disclosures form part of the ‘Other information’, rather than
the audited Financial Statements. Our procedures on these unaudited disclosures
therefore consisted solely of considering whether they are materially inconsistent
with the Financial Statements or our knowledge obtained in the course of the
audit or otherwise appear to be materially misstated, in line with our
responsibilities on ‘Other information’.
In planning and performing our audit we assessed the potential impacts of
climate change on the Group’s business and any consequential material impact
on its Financial Statements.
The Group has explained in note 1 how they have reflected the impact of
climate change in their Financial Statements including how this aligns with their
commitment to the aspirations of the Paris Agreement to achieve net zero
emissions by 2050. Significant judgements and estimates relating to climate
change have been factored into the Directors’ showroom asset impairment
assessment. These considerations did not have a material impact on the
Financial Statements.
Our audit effort in considering the impact of climate change on the Financial
Statements was focused on evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate commitments, the effects
of material climate risks disclosed on pages 116 to 119 and the significant
judgements and estimates disclosed in note 1 and whether these have been
appropriately reflected in asset values where these are impacted by future
cash flows and associated sensitivity disclosures, being the showroom asset
impairment testing (see notes 10 and 12), following the requirements of UK
adopted international accounting standards. As part of this evaluation, we
performed our own risk assessment, supported by our climate change internal
specialists, to determine the risks of material misstatement in the Financial
Statements from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their
assessment of going concern and viability and associated disclosures. Where
considerations of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work, whilst we have not identified the impact of climate change
on the Financial Statements to be a standalone key audit matter, we have
considered the impact on the showroom impairment key audit matter. Details
of the impact, our procedures and findings are included in our explanation of
key audit matter below.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
205
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current period and
include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the Financial Statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations communicated to
the Audit & Risk Committee
Refer to the Audit & Risk Committee Report (page 175);
Accounting policies (page 219); and Note 4 and 12 of the
Consolidated Financial Statements (pages 227 and 236)
Cash generating units (‘CGU’) should be reviewed for
indicators of impairment at each reporting period end.
Judgement is involved in the grouping of showrooms
into cash generating units (CGUs).
In addition, forecasts and discount rates used in
assessing showroom impairment are judgemental and
involve estimates of future trading which involves
uncertainty. In particular, there is a risk of impairment
as a result of the current consumer landscape which
adds greater uncertainty on future showroom
performance particularly in respect of non-supply
constrained brands.
To address the risk we:
– Understood and assessed the design effectiveness and implementation of
management’s controls over the impairment indicator review and
impairment test
– Validated that management’s calculations were performed in accordance
with the requirements of IAS 36
– Challenged the US and UK discount rates used with the assistance of EY
valuation specialists which included independently determining a
reasonable range as a corroboration for the appropriateness of the
discount rate used by management
– Challenged the showroom cash flow forecasts used by management in
calculating the value in use. Our procedures included assessing changes
from the prior period, comparing to external forecasts for the industry,
considering the potential impacts from climate change, inspecting post
year-end results and considering whether there was any indication of
management bias, including consideration of any contrary indicators
– Challenged the judgements on the identification of cash generating units
to assess whether the threshold for grouping showrooms as one CGU
had been met
– Challenged the long-term growth rates applied by comparing to external
forecasts in the US and UK
– Assessed the process for allocating forecast cash flows to individual
showrooms
– Validated impairment test input data and arithmetical accuracy of the
model, including the allocation of overheads to CGUs
– Independently stress tested the model’s key assumptions to determine if
any plausible change in assumptions would result in a material change in
impairment
– Assessed the adequacy of the disclosures in the Financial Statements in
respect of the impairment. This included assessing the disclosure on the
reasonable possible changes in assumptions in line with the requirements
of IAS 36
Based on our procedures over
showroom asset impairment no
material misstatements were identified.
We consider the showroom asset
impairment recognised to be materially
stated.
Management has appropriately
included sensitivity analysis disclosures
in note 12 to the Consolidated Financial
Statements to reflect the level of
estimation uncertainty.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF WATCHES OF SWITZERLAND GROUP PLC
CONTINUED
Showroom asset impairment – £9.9m (FY25 £46.5m)
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
206
Risk Our response to the risk
Key observations communicated to
the Audit & Risk Committee
Refer to the Audit & Risk Committee Report (page 175);
Accounting policies (page 220); and Note 15 of the
Consolidated Financial Statements (page 240)
The Group sells luxury goods, which have a high carrying
value and are subject to changing consumer trends.
Management applies judgement to anticipate the
saleability of on-hand inventory and to evaluate the
liquidation of slow moving and discontinued inventory
when calculating the inventory provision.
There is greater risk on the inventory provision for
products where margins tend to be lower, more variable
and impacted by changes in the consumer landscape
such as jewellery and non-super high demand products.
There is also a heightened risk on the valuation of
second-hand watch inventory, including Rolex Certified
Pre-Owned (‘RCPO’), given the recoverable amount is
subject to fluctuations in second hand market prices.
To address the risk we:
– Understood and assessed the design effectiveness and implementation of
management’s controls over the inventory valuation and provision
calculation process
– Enquired of key members of finance and the merchandising team to
understand inventory levels, ageing and plans for discontinuation
– Assessed management’s judgements and assumptions used in determining
the inventory provision to challenge if they were appropriate and
supportable and recalculated the provision. We understood the sensitivity
of these assumptions to change
– Assessed the level of provisioning by specific brand and compared this to
performance in the year and stock turn. We directed greater attention to
the products likely to be impacted by cost of living challenges as well as
pre-owned inventory
– Inspected the value of inventory sold at less than cost during the period
and challenged management on whether a provision was required for any
such products that remain on hand at year-end
– In assessing the reasonableness of management’s methodology, we have
considered the historical level of provisioning and subsequent utilisation
and releases to determine the accuracy of prior provisions
Based on our procedures we consider
the valuation of inventory to be
materially stated.
Refer to the Audit & Risk Committee Report (page 175);
Accounting policies (page 216); and note 2 and 3 of the
Consolidated Financial Statements (page 223 and 226)
Our assessment is that the majority of the Group’s
revenue transactions are non-complex, with no
judgement applied over the amount recorded.
Revenue recognition is a significant risk by
presumption due to the risk of material misstatements
as a result of fraudulent or erroneous financial
reporting.
We consider the revenue recognition significant risk
to be in the following areas:
– Manual adjustments to revenue; and
– Completeness of deferred customer deposits
(occurrence of revenue)
To address this risk we:
– Understood and assessed the design effectiveness and implementation of
management’s controls over the revenue recognition process
– Performed analytical review procedures to understand the revenue
trends compared to the prior period, budget and post year-end to identify
areas that warrant further investigation
– For the full scope components and specific scope components (totalling
99.7% of Group revenue), we utilised data analytic procedures to test the
entire population of postings from Revenue to Cash, correlating the cash
conversion of sales. For a sample of these items, we then verified the
revenue to the receipt and bank statement
– Using data analytic tools, we identified material manual adjustments to
revenue that do not follow the core processes such as postings for
deferred revenue on deposits for further investigation and corroboration
to other audit procedures
– Tested the completeness of deposits through the use of data analytics
procedures on showroom margins and by testing a sample of deposit
releases to revenue in the period confirming the goods were collected
before the period end date by inspecting receipts
– Tested material consolidation adjustments to revenue and assessed
whether they are appropriate
– Assessed the year-end consignment revenue accrual estimate through
analysing historical trends and current performance
We did not identify any evidence of
inappropriate management override
through the use of manual journal
entries.
Based on our procedures in respect
of deposits no material misstatements
were identified.
There were no changes to our key audit matters reporting in the prior year.
Inventory valuation – £458.1m of inventory (FY25
£447.4m)
Revenue recognition including the risk of management
override – £1,827.9m Revenue (FY25 £1,651.5m)
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
207
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate,
could reasonably be expected to influence the economic decisions of the users of the
Financial Statements. Materiality provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the Group to be £7.1 million (2025: £6.7 million),
which is 5% (2025: 5%) of profit before tax and exceptional items. We believe
that profit before tax and exceptional items provides us with an appropriate
basis for setting materiality as it is not distorted by exceptional items which are
both material and occur infrequently and which may fluctuate from period to
period. This measure represents Adjusted PBT adding back the impact of IFRS
16 since this reoccurs each year.
OTHER INFORMATION
The other information comprises the information included in the annual report
set out on pages 1 to 201, including the Strategic Report and Corporate
Governance Report (which includes the Directors Report), other than the
Financial Statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the annual report.
Our opinion on the Financial Statements does not cover the other information
and, except to the extent otherwise explicitly stated in this report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Financial
Statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the Financial Statements themselves. If,
based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES
ACT 2006
In our opinion, the part of the directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the strategic report and the directors’ report for the
financial year for which the Financial Statements are prepared is consistent with
the Financial Statements; and
– the strategic report and the directors’ report have been prepared in accordance
with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
– the Parent Company Financial Statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
– certain disclosures of directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the Group and Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that
each of the following elements of the Corporate Governance Statement is
materially consistent with the Financial Statements or our knowledge obtained
during the audit:
– Directors’ statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on
page 148;
– Directors’ explanation as to its assessment of the Company’s prospects, the
period this assessment covers and why the period is appropriate set out on
page 149;
– Directors’ statement on whether it has a reasonable expectation that the Group
will be able to continue in operation and meets its liabilities set out on page 149;
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF WATCHES OF SWITZERLAND GROUP PLC
CONTINUED
STARTING
BASIS
Profit before tax – £133.5m
ADJUSTMENTS
– Exceptional items – £8.8m
MATERIALIT Y
– Tot als £142.3m
– Materiality of £7.1m (5% of materiality basis)
During the course of our audit, we reassessed initial materiality and trued
this up to final results to reflect the full year actual profit before tax and
exceptional items.
We determined materiality for the Parent Company to be £9.5 million (2025:
£9.2 million), which is 2% (2025: 2%) of equity due to the main purpose of the
entity being an investment holding company which does not trade.
PERFORMANCE MATERIALITY
The application of materiality at the individual account or balance level. It is set at
an amount to reduce to an appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s
overall control environment, our judgement was that performance materiality was
75% (2025: 75%) of our planning materiality, namely £5.3 million (2025: £5.0 million).
We have set performance materiality at this percentage as we did not anticipate
a significant level of audit differences following our 2025 audit.
Audit work was undertaken at component locations for the purpose of
responding to the assessed risks of material misstatement of the Group Financial
Statements. The performance materiality set for each component is based on
the relative scale and risk of the component to the Group as a whole and our
assessment of the risk of misstatement at that component. In the current year,
the range of performance materiality allocated to components was £1.1 million
to £5.3 million (2025: £1.0 million to £4.9 million).
REPORTING THRESHOLD
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit & Risk Committee that we would report to them all
uncorrected audit differences in excess of £0.36 million (2025: £0.33 million),
which is set at 5% of planning materiality, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant qualitative
considerations in forming our opinion.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
208
– Directors’ statement on fair, balanced and understandable set out on page 199;
– Board’s confirmation that it has carried out a robust assessment of the emerging
and principal risks set out on page 142;
– The section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on page 142; and
– The section describing the work of the Audit & Risk Committee set out on
page 175.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on
page 199, the directors are responsible for the preparation of the Financial
Statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the
preparation of Financial Statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, the directors are responsible for assessing
the Group and Parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no realistic
alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Financial
Statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of
these Financial Statements.
EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS CONSIDERED
CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.
The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud
rests with both those charged with governance of the company and
management.
– We obtained an understanding of the legal and regulatory frameworks that
are applicable to the Group and determined that the most significant are
frameworks which are directly relevant to specific assertions in the Financial
Statements are those that relate to the reporting framework (UK adopted
international accounting standards, FRS 102, the Companies Act 2006 and UK
Corporate Governance Code). In addition, we concluded that there are certain
significant laws and regulations which may have an effect on the determination of
the amounts and disclosures in the Financial Statements being the Listing Rules of
the UK Listing Authority, and those laws and regulations relating to General Data
Protection Regulation (GDPR), health and safety and employee matters
– We understood how Watches of Switzerland Group PLC is complying with
those frameworks by making enquiries of management, Internal Audit, those
responsible for legal and compliance matters and the Company Secretary and
General Counsel. We confirmed our enquiries through our review of Board
minutes, papers provided to the Audit & Risk Committee and correspondence
received from regulatory bodies
– We assessed the susceptibility of the Group’s Financial Statements to material
misstatement, including how fraud might occur by meeting with management
and Internal Audit to understand where they considered there was susceptibility
to fraud. We also considered performance targets and the potential incentives
or opportunities to manage earnings or influence the perceptions of analysts.
We considered the programmes and controls that the Group has established to
address risks identified, or that otherwise prevent, deter and detect fraud; and
how Senior Management monitors those programmes and controls. Where the
risk was considered to be higher, we performed audit procedures to address
each identified fraud risk as discussed in the key audit matters section above.
These procedures included testing manual journals and were designed to
provide reasonable assurance that the Financial Statements were free from
material fraud
– Based on this understanding we designed our audit procedures to identify
non-compliance with such laws and regulations. Our procedures involved
understanding management’s internal controls over compliance with laws and
regulations; reviewing Internal Audit reports and whistleblowing investigation
reports provided to the Audit & Risk Committee; making enquiries of legal
counsel, Group management, Internal Audit; involving the use of management
and EY specialists and journal entry testing, with a focus on manual consolidation
journals and journals indicating large or unusual transactions based on our
understanding of the business
A further description of our responsibilities for the audit of the Financial
Statements is located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
– Following the recommendation from the Audit & Risk Committee we
were appointed by the Company on 19 October 2019 to audit the Financial
Statements for the year ending 26 April 2020 and subsequent financial periods
– The period of total uninterrupted engagement including previous renewals and
reappointments is seven years, covering the years ending 26 April 2020 to
3 May 2026
– The audit opinion is consistent with the additional report to the Audit &
Risk Committee
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has
been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions
we have formed.
FOR AND ON BEHALF OF ERNST & YOUNG LLP , STATUTORY AUDITOR
Birmingham
13 July 2026
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
209
| 53 week period | 52 week period | ||
| ended | ended | ||
| 3 May 2026 | 27 April 2025 | ||
| Note | £m | £m | |
| Revenue | 2, 3 | ||
Cost of sales | ( | ( | |
Exceptional cost of sales | 4 | ( | |
| GROSS PROFIT | |||
Administrative expenses | ( | ( | |
Exceptional impairment of assets | 4 | ( | ( |
Exceptional reversal of impairment of assets | 4 | ||
Exceptional other administrative expenses | 4 | ( | ( |
Share of result of joint venture and associates | 11 | ( | |
| OPERATING PROFIT | |||
Finance costs | 7 | ( | ( |
Finance income | 7 | ||
Exceptional finance costs | 4, 7 | ( | |
| NET FINANCE COST | ( | ( | |
Profit before taxation | |||
Taxation | 8 | ( | ( |
Profit for the financial period | |||
| Attributable to: | |||
Equity holders of the Company | |||
Non-controlling interests | |||
| EARNINGS PER SHARE | |||
| Basic | 9 | ||
| Diluted | 9 |
The notes on pages 215 to 254 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED INCOME STATEMENT
FOR THE 53 WEEKS ENDED 3 MAY 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
210
| 53 week period | 52 week period | ||
| ended | ended | ||
| 3 May 2026 | 27 April 2025 | ||
| Note | £m | £m | |
Profit for the financial period | |||
| Other comprehensive (expense)/income: | |||
| ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS | |||
Foreign exchange loss on translation of foreign operations | ( | ( | |
Related current tax movements | 8 | ||
( | ( | ||
| ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS | |||
Actuarial movements on defined benefit pension scheme | 20 | ||
Other comprehensive expense for the period | ( | ( | |
Total comprehensive income for the period | |||
| Attributable to: | |||
Equity holders of the Company | |||
Non-controlling interests | |||
The notes on pages 215 to 254 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 3 MAY 2026
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
211
| 3 May 2026 | 27 April 2025 | ||
| Note | £m | £m | |
| ASSETS | |||
| NON-CURRENT ASSETS | |||
Goodwill | 10 | ||
Intangible assets | 10 | ||
Property, plant and equipment | 12 | ||
Right-of-use assets | 13 | ||
Investment in joint venture and associates | 11 | ||
Deferred tax assets | 8 | ||
Post-employment benefit asset | 20 | ||
Trade and other receivables | 14 | ||
| CURRENT ASSETS | |||
Inventories | 15 | ||
Current tax asset | |||
Trade and other receivables | 14 | ||
Cash and cash equivalents | 16 | ||
Total assets | |||
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
Trade and other payables | 17 | ( | ( |
Current tax liability | ( | ( | |
Lease liabilities | 13 | ( | ( |
Provisions | 18 | ( | ( |
( | ( | ||
| NON-CURRENT LIABILITIES | |||
Trade and other payables | 17 | ( | ( |
Deferred tax liabilities | 8 | ( | ( |
Lease liabilities | 13 | ( | ( |
Borrowings | 19 | ( | ( |
Provisions | 18 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| EQUITY | |||
Share capital | 21 | ||
Share premium | 21 | ||
Capital redemption reserve | 21 | ||
Merger reserve | 21 | ( | ( |
Other reserves | 21 | ( | ( |
Retained earnings | 21 | ||
Foreign exchange reserve | 21 | ( | ( |
Total equity |
The notes on pages 215 to 254 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEET
AS AT 3 MAY 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
212
| Equity | Equity | |||||||||
| attributable | attributable | |||||||||
| Capital | Foreign | to owners of | to non- | |||||||
| Share | Share | redemption | Merger | Other | Retained | exchange | the Parent | controlling | Tot al | |
| capital | premium | reserve | reserve | reserves | earnings | reserve | Company | interests | equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 28 April 2024 | ( | ( | ||||||||
Profit for the financial period | ||||||||||
Other comprehensive income, net of tax | ( | ( | ( | |||||||
Total comprehensive income | ( | |||||||||
Purchase of own shares for cancellation | ( | ( | ( | |||||||
Own shares cancelled | ( | |||||||||
Committed share buyback | ( | ( | ( | |||||||
Share-based payment charge (note 22) | ||||||||||
Share-based payments exercised | ( | |||||||||
Tax on items credited to equity | ||||||||||
Tax on vested shares moved to current tax | ( | ( | ( | |||||||
Total other transactions | ( | ( | ( | |||||||
Balance at 27 April 2025 | ( | ( | ( | |||||||
Profit for the financial period | ||||||||||
Other comprehensive income, net of tax | ( | ( | ( | |||||||
Total comprehensive income | ( | |||||||||
Purchase of own shares for cancellation (note 21) | ( | ( | ( | |||||||
Own shares cancelled (note 21) | ( | ( | ||||||||
Acquisition of non-controlling interests (note 25) | ||||||||||
Purchase commitment for non-controlling interests (note 25) | ( | ( | ( | ( | ||||||
Share-based payment charge (note 22) | ||||||||||
Share-based payments exercised | ( | |||||||||
Tax on items credited to equity | ||||||||||
Total other transactions | ( | ( | ( | ( | ( | |||||
Balance at | ( | ( | ( |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 3 MAY 2026
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
213
| 53 week period | 52 week period | ||
| ended | ended | ||
| 3 May 2026 | 27 April 2025 | ||
| Note | £m | £m | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
Profit for the financial period | |||
| Adjustments for: | |||
Depreciation of property, plant and equipment | 12 | ||
Depreciation of right-of-use assets | 13 | ||
Depreciation of right-of-use assets – exceptional items (note 4) | 13 | ||
Amortisation of intangible assets | 10 | ||
Impairment of right-of-use assets – exceptional items (note 4) | 13 | ||
Reversal of impairment of right-of-use assets – exceptional items (note 4) | 13 | ( | |
Impairment of property, plant and equipment – exceptional items (note 4) | 12 | ||
Reversal of impairment of property, plant and equipment – exceptional items (note 4) | 12 | ( | |
Loss on disposal of property, plant and equipment | 12 | ||
Loss on disposal of property, plant and equipment – exceptional items (note 4) | 12 | ||
Loss on disposal of intangible assets | 10 | ||
Gain on lease modifications and disposals | 13 | ( | ( |
Share-based payment charge | 22 | ||
Share of result of joint venture and associates | 11 | ||
Finance income | 7 | ( | ( |
Finance costs | 7 | ||
Finance costs – exceptional items (note 4) | 7 | ||
Taxation | 8 | ||
Increase in inventory | ( | ( | |
Increase in debtors | ( | ( | |
| Increase/(decrease) in creditors, provisions and pensions | ( | ||
Cash generated from operations | |||
Defined benefit pension scheme contributions | 20 | ( | ( |
| Taxation paid | ( | ( | |
Total net cash generated from operating activities | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of non-current assets: | |||
Property, plant and equipment additions | 12 | ( | ( |
Intangible asset additions | 10 | ( | ( |
Movement on capital expenditure accrual | ( | ||
Cash outflow from purchase of non-current assets | ( | ( | |
Interest received | |||
Investment in joint venture and associates | ( | ||
Disposal of European property, plant and equipment | 12 | ||
Acquisition of subsidiaries net of cash acquired | 25 | ( | ( |
Total net cash outflow from investing activities | ( | ( | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
Purchase of own shares for cancellation | 21 | ( | ( |
Proceeds of term loan | 19 | ||
Net movement on multicurrency revolving loan facility | 19 | ( | ( |
Costs directly attributable to raising new loan facility | 19 | ( | |
Payment of capital element of leases | 13 | ( | ( |
Payment of interest element of leases | 13 | ( | ( |
Interest paid | ( | ( | |
Net cash outflow from financing activities | ( | ( | |
Net decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the beginning of the period | |||
Exchange losses on cash and cash equivalents | ( | ( | |
Cash and cash equivalents at the end of period | |||
| Comprised of: | |||
Cash at bank and in hand | 16 | ||
Cash in transit | 16 | ||
Cash and cash equivalents at end of period |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 53 WEEKS ENDED 3 MAY 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
214
1. ACCOUNTING POLICIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
215
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
216
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
217
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
218
Computer software | 3 to 5 years |
Brands | 5 to 30 years |
Agency agreements | 10 years |
Land and buildings | Lease period |
Fittings and equipment | 3 to 10 years |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
219
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
Financial assets | Classification under IFRS 9 |
| Trade and other receivables | Amortised cost – held to collect as business |
| (excluding prepayments) | model and SPPI met |
Cash and short-term deposits | Amortised cost |
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
220
Financial liabilities | Classification under IFRS 9 |
| Interest-bearing loans and | Amortised cost |
| borrowings | |
| Trade and other payables (excluding | Amortised cost |
| accrued income) |
| Financial liabilities at FVPL | Subsequently measured at fair value. Gains and losses |
| are recognised in the Consolidated Income Statement | |
| Interest-bearing loans and | Subsequently measured at amortised cost using the EIR |
| borrowings | method. The EIR amortisation is included in finance |
| costs in the Income Statement | |
| Trade and other payables | Subsequently measured at amortised cost |
| (excluding accrued income) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
221
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
222
2. SEGMENT REPORTING
The key Group performance measures are Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (Adjusted EBITDA) and Adjusted Earnings
Before Interest and Tax (Adjusted EBIT), both shown pre-exceptional items, as detailed below. The segment profit/loss is disclosed on a pre-IFRS 16 basis reflecting
how results are reported to the Chief Operating Decision Makers (CODMs) and how they are measured for the purposes of covenant testing. Both Adjusted
EBITDA and Adjusted EBIT are APMs and these measures provide stakeholders with additional useful information to assess the year-on-year trading performance
of the Group but should not be considered in isolation of statutory measures.
Adjusted EBITDA represents profit for the period before finance costs, finance income, taxation, depreciation, amortisation, and exceptional items presented
in the Group’s Consolidated Income Statement (consisting of exceptional cost of sales, exceptional administrative expenses net of impairment reversal and
exceptional finance costs) on a pre-IFRS 16 basis. UK and Europe operating segments are aggregated into one reporting segment, which is reflective of the
management structure in place and meets the aggregation criteria of IFRS 8.
As a result of the acquisition of Roberto Coin Inc. in May 2024 and the continued growth of the wholesale business in the period, the Group’s organisational
structure and internal reporting to the CODM have changed. US retail and US wholesale, previously aggregated into the US reporting segment, have been shown
separately. All US direct-to-consumer sales, including ecommerce, are now reported through US retail. The comparative segmental disclosures have been
re-presented to allow for comparison.
| 53 week period ended 3 May 2026 | ||||||
| UK and Europe | US retail | US wholesale | Corporate | Eliminations | Tot al | |
| £m | £m | £m | £m | £m | £m | |
| Revenue | ||||||
External customers | 900.7 | 810.5 | 116 .7 | – | – | 1,827.9 |
Inter-segment | – | – | 10.2 | – | (10.2) | – |
Total revenue | 900.7 | 810.5 | 126.9 | – | (10.2) | 1,827.9 |
Cost of sales | (585.4) | (528.0) | (73.4) | – | 10.2 | (1,176.6) |
Net margin | 315.3 | 282.5 | 53.5 | – | – | 651.3 |
| Less: | ||||||
Showroom costs | (173.0) | (140.7) | – | – | – | (313.7) |
Overheads | (48.3) | (48.1) | (27. 5) | (5.5) | – | (129.4) |
Showroom opening and closing costs | (3.1) | (2.9) | – | – | – | (6.0) |
Share of result of joint venture and associates | – | – | – | – | – | – |
Adjusted EBITDA | 90.9 | 90.8 | 26.0 | (5.5) | – | 202.2 |
Depreciation, amortisation and loss on disposal of assets | (25.0) | (19.7 ) | (1.0) | (1.7) | – | (47.4) |
Segment profit/(loss)* | 65.9 | 71.1 | 25.0 | (7.2) | – | 154.8 |
| Impact of IFRS 16 (excluding interest on leases) | 24.0 | |||||
| Net finance costs | (36.5) | |||||
| Exceptional impairment of assets (note 4) | (9.9) | |||||
| Exceptional reversal of impairment of assets (note 4) | 2.3 | |||||
| Exceptional other administrative expenses (note 4) | (1.2) | |||||
| Profit before taxation for the financial period | 133.5 |
* Segment profit/(loss) is defined as being Earnings Before Interest, Tax, exceptional items and IFRS 16 adjustments (Adjusted EBIT)
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
223
2. SEGMENT REPORTING (CONTINUED)
| 52 week period ended 27 April 2025 | ||||||
| UK and Europe | US retail | US wholesale 1 | Corporate | Eliminations | Tot al | |
| £m | £m | £m | £m | £m | £m | |
| Revenue | ||||||
External customers | 865.9 | 680.7 | 104.9 | – | – | 1,651.5 |
Inter-segment | – | – | 4.9 | – | (4.9) | – |
Total revenue | 865.9 | 680.7 | 109.8 | – | (4.9) | 1,651.5 |
Cost of sales | (553.9) | (438.6) | (65.3) | – | 4.9 | (1,052 .9) |
Net margin | 312.0 | 242.1 | 44.5 | – | – | 598.6 |
| Less: | ||||||
Showroom costs | (170.3) | (122.4) | – | – | – | (292.7) |
Overheads | (44.0) | (38.4) | (20.2) | (3.9) | – | (106.5) |
Showroom opening and closing costs | (1.6) | (5.3) | – | – | – | (6.9) |
Share of loss of joint venture and associates | (0.2) | – | – | – | – | (0.2) |
Adjusted EBITDA | 95.9 | 76.0 | 24.3 | (3.9) | – | 192.3 |
Depreciation, amortisation, impairment and loss on disposal of assets | (25.9) | (14.8) | (0.4) | (1. 5) | – | (42.6) |
Segment profit/(loss)* | 70.0 | 61.2 | 23.9 | (5.4) | – | 149.7 |
| Impact of IFRS 16 (excluding interest on leases) | 19.7 | |||||
| Net finance costs | (35.8) | |||||
| Exceptional cost of sales (note 4) | (2.0) | |||||
| Exceptional impairment of assets (note 4) | (46.5) | |||||
| Exceptional other administrative expenses (note 4) | (7.0) | |||||
| Exceptional finance costs (note 4) | (2.2) | |||||
Profit before taxation for the financial period | 75.9 |
1 US retail and US wholesale, previously aggregated into the US repor ting segment, have been shown separately to align with the latest internal reporting to the CODM. Disclosures have been
re-presented to show all US direct-to-consumer sales, including ecommerce, within the US retail segment
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
224
Entity-wide revenue disclosures
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 2 | |
| £m | £m | |
| UK AND EUROPE | ||
Luxury watches | 769.7 | 742.2 |
Luxury jewellery retail | 70.7 | 63.2 |
Services/other | 60.3 | 60.5 |
Total | 900.7 | 865.9 |
| US RETAIL | ||
Luxury watches | 737.3 | 622.6 |
Luxury jewellery retail 1 | 50.5 | 40.0 |
Services/other | 22.7 | 18.1 |
Total | 810.5 | 680.7 |
| US WHOLESALE | ||
Luxury jewellery wholesale 1 | 116 .7 | 104.9 |
Total | 116 .7 | 104.9 |
| GROUP | ||
Luxury watches | 1, 507.0 | 1,364.8 |
Luxury jewellery retail 1 | 121.2 | 103.2 |
Luxury jewellery wholesale 1 | 116 .7 | 104.9 |
Services/other | 83.0 | 78.6 |
Total | 1,827.9 | 1,651.5 |
‘Services/other’ consists of the sale of fashion and classic watches and jewellery, servicing, repairs and product insurance. Information regarding geographical areas,
including revenue from external customers, is disclosed above.
No single customer accounted for more than 10% of revenue in any of the financial periods noted above.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
225
2. SEGMENT REPORTING (CONTINUED)
Entity-wide statutory non-current asset disclosures
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| UK AND EUROPE | ||
Goodwill | 137.6 | 137.6 |
Intangible assets | 6.4 | 5.5 |
Property, plant and equipment | 108.4 | 100.7 |
Right-of-use assets | 180.9 | 202.4 |
Investment in joint venture and associates | 0.5 | 0.5 |
Total | 433.8 | 446.7 |
US RETAIL 1 | ||
Goodwill | 81.4 | 66.8 |
Intangible assets | 14.9 | 13.3 |
Property, plant and equipment | 98.1 | 79.4 |
Right-of-use assets | 149.9 | 150.8 |
Total | 344.3 | 310.3 |
US WHOLESALE 1 | ||
Goodwill | 26.3 | 26.8 |
Intangible assets | 53.1 | 54.1 |
Property, plant and equipment | 2.4 | 2.5 |
Right-of-use assets | 2.1 | 0.4 |
Total | 83.9 | 83.8 |
| CORPORATE | ||
Property, plant and equipment | 8.1 | 9.8 |
Right-of-use assets | 5.3 | 5.0 |
Total | 13.4 | 14.8 |
| GROUP | ||
Goodwill | 245.3 | 231.2 |
Intangible assets | 74.4 | 72.9 |
Property, plant and equipment | 217.0 | 192.4 |
Right-of-use assets | 338.2 | 358.6 |
Investment in joint venture and associates | 0.5 | 0.5 |
Total | 875.4 | 855.6 |
| 53 week period ended 3 May 2026 | |||||
| Sale of goods – | Sale of goods – | Rendering of | |||
| retail and online | wholesale | Eliminations | services | Tot al | |
| £m | £m | £m | £m | £m | |
UK and Europe | 869.2 | – | – | 31.5 | 900.7 |
US | 791.1 | 126 .9 | (10.2) | 19.4 | 927.2 |
Total | 1,660.3 | 126.9 | (10.2) | 50.9 | 1,827.9 |
| 52 week period ended 27 April 2025 | |||||
| Sale of goods – | Sale of goods – | Rendering of | |||
retail and online 1 | wholesale 1 | Elimination 1 | services | Tot al | |
| £m | £m | £m | £m | £m | |
UK and Europe | 839.4 | – | – | 26.5 | 865.9 |
US | 667.7 | 109.8 | (4.9) | 13.0 | 785.6 |
Total | 1, 507.1 | 109.8 | (4.9) | 39.5 | 1,651.5 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
226
4. EXCEPTIONAL ITEMS
Exceptional items are those that, in the judgement of the Directors, need separate disclosure by virtue of their size, nature or incidence, in order to draw the
reader’s attention to unique non-recurring events that do not form part of the underlying Group’s business performance. Such items are included within the
Income Statement caption to which they relate and are separately disclosed on the face of the Consolidated Income Statement.
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| EXCEPTIONAL COST OF SALES | ||
Rolex Old Bond Street (IFRS 16 depreciation) (note 13) | – | (2.0) |
Total exceptional cost of sales | – | (2.0) |
| EXCEPTIONAL ADMINISTRATIVE COSTS | ||
Showroom impairment (i) | (6.5) | (44.5) |
Impairment and reversal of impairment of right-of-use assets (note 13) | (3.9) | (24.6) |
Impairment and reversal of impairment of property, plant and equipment (note 12) | (2.6) | (19.0) |
Other onerous contract provisions | – | (1.6) |
Lease-related gains | – | 0.7 |
Showroom closures (ii) | (1.7) | (6.2) |
Impairment of right-of-use assets (note 13) | (0.2) | (2.2) |
Impairment of property, plant and equipment (note 12) | (0.9) | – |
Disposal of property, plant and equipment (note 12) | (0.7) | (0.6) |
Other onerous contract provisions | (0.2) | (1.8) |
Lease-related gains | 2.0 | – |
Redundancy and other costs | (1.7 ) | (1.6) |
European showroom divestment (iii) | 0.4 | (0.7) |
Lease-related gains | 0.7 | – |
Other costs | (0.3) | – |
Impairment of property, plant and equipment (note 12) | – | (0.7) |
Business acquisitions (iv) | (1.0) | (2.1) |
Professional and legal expenses on actual and prospective business acquisitions | (0.6) | (0.9) |
Integration costs of business acquisitions | (0.4) | (1.2) |
Total exceptional administrative costs | (8.8) | (53.5) |
| EXCEPTIONAL FINANCE COSTS | ||
Rolex Old Bond Street (IFRS 16 interest) (note 13) | – | (2.2) |
Total exceptional finance costs | – | (2.2) |
Total exceptional items | (8.8) | (57.7 ) |
(i) Showroom impairment
The current macroeconomic environment, including higher interest and inflation rates than at the time of some initial project appraisals, gave rise to indicators of impairment in the period.
Consequently, the Group performed discounted cash flow impairment testing on relevant Cash-Generating Units (CGUs) with indicators of impairment. This resulted in a net non-cash impairment
charge of £6.5 million, comprising gross impairment charges of £8.8 million (2025: £43.6 million), partially offset by impairment reversals of £2.3 million (2025: £nil), relating to showrooms where
revised future cash flow projections support their carrying value. Impairments are allocated to right-of-use assets and property, plant and equipment in accordance with IAS 36 ‘Impairment of Assets’.
(ii) Showroom closures
In March 2026, the closure of a number of UK showrooms was announced as the Group continually assesses its operations to remain as efficient and productive as possible. The exceptional costs are
reflective of asset write downs, other onerous contract provisions and redundancy costs. A lease surrender gain of £2.0 million was also recognised in exceptionals, as the original impairment was
presented in exceptionals in the prior year.
(iii) European showroom divestment
As announced in 2024, the Group’s intention has been to reallocate investment from Europe into the US and UK. During the period, our two remaining European showrooms were divested
to brand par tners.
(iv) Business acquisitions
Professional, legal expenses and integration expenses in relation to business combinations have been expensed to the Consolidated Income Statement as an exceptional cost as they are regarded
as non-trading, non-underlying costs and are considered to be material by nature.
The total cash outflow in FY26 as a result of the above was £5.0 million, being (i) £nil + (ii) £4.6 million + (iii) £(0.1) million + (iv) £0.5 million.
The tax income on the exceptional items noted above totalled £3.6 million (52-week period ended 27 April 2025: £15.0 million income).
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
227
6. EMPLOYEES AND DIRECTORS
Staff costs recognised in operating profit for the Group during the period:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Wages and salaries | 169.6 | 151.5 |
Social security costs | 16.0 | 12.9 |
Share-based payments (note 22) | 1.8 | 1.8 |
Share-based payments social security costs | 0.2 | 0.2 |
Pensions costs – defined contribution schemes (note 20) | 3.9 | 3.5 |
Pensions costs – defined benefit scheme (note 20) | 0.2 | 0.2 |
Total | 191.7 | 170.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
228
Average number of people (including Executive Directors) employed:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
Retail | 2,064 | 2,193 |
Services | 138 | 146 |
Wholesale | 47 | 46 |
Editorial | 19 | 13 |
Administrative | 674 | 693 |
Total | 2,942 | 3,091 |
Average Full Time Equivalents (FTE) (including Executive Directors) employed:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
Retail | 1,942 | 2,041 |
Services | 134 | 140 |
Wholesale | 46 | 45 |
Editorial | 19 | 13 |
Administrative | 649 | 668 |
Total | 2,790 | 2,907 |
Further disclosure of the amounts paid to key management personnel is included within note 24.
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| FINANCE COSTS | ||
Interest payable on long-term borrowings | (12.0) | (14.9) |
Amortisation of capitalised transaction costs | (0.7) | (0.9) |
Interest on lease liabilities (note 13) | (25.5) | (22.2) |
Net foreign exchange expense on financing activities | – | (0.1) |
Total finance costs | (38.2) | (38.1) |
| FINANCE INCOME | ||
Bank interest receivable | 1.6 | 2.2 |
Other interest income | 0.1 | 0.1 |
Total finance income | 1.7 | 2.3 |
Total net finance costs excluding exceptional items | (36.5) | (35.8) |
Exceptional finance costs (note4) | – | (2.2) |
Total net finance costs | (36.5) | (38.0) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
229
8. TA X ATION
Tax charge for the period
The tax charge for the period is shown below. Tax is made up of current and deferred tax. Current tax is the amount payable on the taxable income in the period
and any adjustments to tax payable in previous periods.
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| CURRENT TAX: | ||
Current UK tax on profits for the period | 14.4 | 9.5 |
Current US tax on profits for the period | 17.2 | 16. 5 |
Adjustments in respect of prior periods – UK and Europe | 0.7 | 1.3 |
Adjustments in respect of prior periods – US | (4.5) | (0.3) |
Total current tax | 27.8 | 27.0 |
| DEFERRED TAX: | ||
Origination and reversal of temporary differences | 4.2 | (3.8) |
Impact of change in tax rate | 0.2 | – |
Adjustments in respect of prior periods – UK and Europe | (0.7) | (1.1) |
Adjustments in respect of prior periods – US | 3.0 | – |
Total deferred tax | 6.7 | (4.9) |
Tax expense reported in the Consolidated Income Statement | 34.5 | 22.1 |
In the US, the prior period adjustment primarily reflects additional bonus depreciation on capital expenditure which arose from the One Big Beautiful Bill that was
not enacted at the prior period end. This resulted in a current tax credit, largely offset by a related deferred tax charge.
Factors affecting the tax charge in the period
The tax rate for the current period was higher than the standard rate of corporation tax in the UK due to the following factors:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Profit before taxation | 133.5 | 75.9 |
Notional taxation at standard UK corporation tax rate of 25.0% (2025: 25.0%) | 33.4 | 19.0 |
Non-deductible expenses – recurring | 1.6 | 2.0 |
Non-deductible expenses – exceptional items | – | 0.2 |
Overseas tax differentials | 1.1 | 0.8 |
Deferred tax not recognised – European subsidiaries | – | 0.2 |
Adjustments in respect of prior periods | (1.6) | (0.1) |
Tax expense reported in the Consolidated Income Statement | 34.5 | 22.1 |
Tax recognised in other comprehensive income
In addition to the amount charged to the Consolidated Income Statement, tax movements recognised in other comprehensive income were as follows:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| CURRENT TAX: | ||
Foreign exchange difference on translation of foreign operations | 0.3 | 1.1 |
Tax charge in other comprehensive income | 0.3 | 1.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
230
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Deferred tax assets | 3.8 | 4.1 |
Deferred tax liabilities | (19. 5) | (15.9) |
Total | (15.7) | (11. 8) |
| 3 May 2026 | 27 April 2025 | ||
| £m | £m | ||
Accelerated capital allowances | (i) | (18.4) | (12.3) |
Non-trade tax losses | (ii) | 0.4 | 0.8 |
Trade tax losses | (iii) | 1.6 | 1.7 |
Deferred tax on leases (IFRS 16) | (iv) | 8.4 | 8.2 |
Share-based payments | (v) | 1.1 | 0.2 |
Intangible assets | (vi) | (16.8) | (4.8) |
Other temporary differences | (vii) | 8.0 | 8.3 |
Deferred tax on business combinations | (viii) | – | (13.9) |
Total | (15.7) | (11. 8) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
231
8. TA X ATION (CONTINUED)
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Balance at | (11. 8 ) | (3.0) |
| RECOGNISED IN THE INCOME STATEMENT: | ||
Accelerated capital allowances | (6.1) | 2.0 |
Pension benefit obligations | (0.2) | (0.2) |
Movement on unused tax losses | (0.5) | (0.7) |
Deferred tax on leases (IFRS 16) | 0.2 | 1.2 |
Share-based payments | 0.6 | (1.3) |
Intangible assets | (0.3) | (0.7) |
Other temporary differences | (0.3) | 4.6 |
| RECOGNISED IN OTHER COMPREHENSIVE INCOME: | ||
Foreign exchange movements | 0.1 | 0.2 |
| RECOGNISED DIRECTLY WITHIN EQUITY: | ||
Share-based payments | 0.3 | 0.4 |
Vested share-based payments | – | (0.4) |
| RECOGNISED DIRECTLY WITHIN GOODWILL: | ||
Deferred tax on business combination | 2.3 | (13.9) |
Balance at 3 May 2026 | (15.7) | (11. 8) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
232
9. EARNINGS PER SHARE (EPS)
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| BASIC | ||
EPS | 42.6p | 22.8p |
EPS adjusted for exceptional items | 44.8p | 40.8p |
EPS adjusted for exceptional items and pre-IFRS 16 | 45.2p | 41.6p |
| DILUTED | ||
EPS | 42.6p | 22.7p |
EPS adjusted for exceptional items | 44.8p | 40.8p |
EPS adjusted for exceptional items and pre-IFRS 16 | 45.2p | 41.5p |
Basic EPS is based on the profit for the year attributable to the equity holders of the Parent Company divided by the weighted average number of shares.
Diluted EPS is calculated by adjusting the weighted average number of shares used for the calculation of basic EPS as increased by the dilutive effect of potential
ordinary shares.
The following table reflects the profit and share data used in the basic and diluted EPS calculations:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Profit after tax attributable to equity holders of the Parent Company | 98.8 | 53.8 |
| ADJUST FOR EXCEPTIONAL ITEMS: | ||
Exceptional items (note 4) | 8.8 | 57.7 |
Tax on exceptional items | (3.6) | (15.0) |
Profit adjusted for exceptional items attributable to equity holders of the Parent Company | 104.0 | 96.5 |
Pre-exceptional IFRS 16 adjustments, net of tax | 0.9 | 1.8 |
Profit adjusted for exceptional items and IFRS 16 attributable to equity holders of the Parent Company | 104.9 | 98.3 |
The following table reflects the share data used in the basic and diluted EPS calculations:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| WEIGHTED AVERAGE NUMBER OF SHARES: | ‘000 | ‘000 |
Weighted average number of ordinary shares in issue | 231,905 | 236 ,518 |
Weighted average shares for basic EPS | 231,905 | 236,518 |
Weighted average dilutive potential shares | 259 | 224 |
Weighted average shares for diluted EPS | 232,164 | 236,742 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
233
| 3 May 2026 | ||||||
| Licence with | ||||||
| Agency | indefinite | Computer | ||||
| Goodwill | Brands | agreement | useful life | software | Tot al | |
| £m | £m | £m | £m | £m | £m | |
| COST | ||||||
| At 28 April 2025 | 231.2 | 16.6 | 2.6 | 53.7 | 16.5 | 320.6 |
Acquired on business acquisition (note 25) | 15.9 | 3.0 | – | – | – | 18.9 |
Additions | – | – | – | – | 3.3 | 3.3 |
Disposals | – | – | – | – | (0.9) | (0.9) |
Foreign exchange differences | (1.8) | (0.3) | – | (1.0) | (0.1) | (3.2) |
At 3 May 2026 | 245.3 | 19.3 | 2.6 | 52.7 | 18.8 | 338.7 |
| ACCUMULATED AMORTISATION AND IMPAIRMENT | ||||||
| At 28 April 2025 | – | 4.6 | 2.0 | – | 9.9 | 16.5 |
Charge for the period | – | 1.0 | 0.3 | – | 2.2 | 3.5 |
Disposals | – | – | – | – | (0.9) | (0.9) |
Foreign exchange differences | – | – | (0.1) | – | – | (0.1) |
At 3 May 2026 | – | 5.6 | 2.2 | – | 11. 2 | 19.0 |
| NET BOOK VALUE | ||||||
At 3 May 2026 | 245.3 | 13.7 | 0.4 | 52.7 | 7.6 | 319.7 |
At 27 April 2025 | 231.2 | 12.0 | 0.6 | 53.7 | 6.6 | 304.1 |
| 27 April 2025 | ||||||
| Licence with | ||||||
| Agency | indefinite | Computer | ||||
| Goodwill | Brands | agreement | useful life | software | Tot al | |
| £m | £m | £m | £m | £m | £m | |
| COST | ||||||
At 29 April 2024 | 199.3 | 14.1 | 2.8 | – | 15.6 | 231.8 |
Acquired on business acquisition (note 25) | 37. 5 | 3.4 | – | 57.2 | – | 98.1 |
Additions | – | – | – | – | 3.6 | 3.6 |
Disposals | – | – | – | – | (2.6) | (2.6) |
Foreign exchange differences | (5.6) | (0.9) | (0.2) | (3.5) | (0.1) | (10.3) |
At 27 April 2025 | 231.2 | 16.6 | 2.6 | 53.7 | 16.5 | 320.6 |
| ACCUMULATED AMORTISATION AND IMPAIRMENT | ||||||
At 29 April 2024 | – | 4.1 | 1.8 | – | 10.2 | 16.1 |
Charge for the period | – | 0.8 | 0.3 | – | 2.2 | 3.3 |
Disposals | – | – | – | – | (2.4) | (2.4) |
Foreign exchange differences | – | (0.3) | (0.1) | – | (0.1) | (0.5) |
At 27 April 2025 | – | 4.6 | 2.0 | – | 9.9 | 16.5 |
| NET BOOK VALUE | ||||||
At 27 April 2025 | 231.2 | 12 .0 | 0.6 | 53.7 | 6.6 | 304.1 |
At 28 April 2024 | 199.3 | 10.0 | 1.0 | – | 5.4 | 215.7 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
234
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Heritage (UK) | 137.6 | 137.6 |
Watches of Switzerland (US) | 30.8 | 31.4 |
Roberto Coin Inc. (US) | 26.3 | 26.7 |
Betteridge (US) | 20.5 | 20.9 |
Deutsch & Deutsch (US) | 15.8 | – |
Mayors Jewelers (US) | 11.4 | 11. 5 |
The Wynn Resort, Las Vegas (US) | 2.8 | 2.9 |
Analog:Shift (US) | 0.1 | 0.2 |
Total | 245.3 | 231.2 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
235
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Current assets | 5.3 | 2.9 |
Non-current assets | 9.1 | 5.3 |
Current liabilities | (4.4) | (1.0) |
Non-current liabilities | (8.7) | (6.0) |
Net assets | 1.3 | 1.2 |
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Revenue | 12.3 | – |
Result for the financial period | – | (0.6) |
Total comprehensive loss | – | (0.6) |
Group’s share of result for the financial period | – | (0.2) |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Net assets | 1.3 | 1.2 |
Proportion of the Group’s ownership interest | 0.5 | 0.5 |
Carrying amount of the Group’s interest | 0.5 | 0.5 |
12. PROPERTY, PLANT AND EQUIPMENT
| 3 May 2026 | |||
| Fittings and | |||
| Land and buildings | equipment | Tot al | |
| £m | £m | £m | |
| COST | |||
At 28 April 2025 | 2.2 | 382.1 | 384.3 |
Additions | – | 68.3 | 68.3 |
Acquired on business acquisition (note 25) | – | 6.5 | 6.5 |
Disposals | – | (20.9) | (20.9) |
Disposals – exceptional items (note 4) | – | (1.2) | (1.2) |
Foreign exchange differences | – | (2.6) | (2.6) |
At 3 May 2026 | 2.2 | 432.2 | 434.4 |
| ACCUMUL ATED DE PRECIATION | |||
At 28 April 2025 | 1.7 | 190.2 | 191.9 |
Charge for the period | 0.1 | 43.3 | 43.4 |
Impairment – exceptional items (note 4) | – | 4.9 | 4.9 |
Impairment reversal – exceptional items (note 4) | – | (1.4) | (1.4) |
Disposals | – | (20.0) | (20.0) |
Disposals – exceptional items (note 4) | – | (0.5) | (0.5) |
Foreign exchange differences | – | (0.9) | (0.9) |
At 3 May 2026 | 1.8 | 215.6 | 217.4 |
| NET BOOK VALUE | |||
At 3 May 2026 | 0.4 | 216.6 | 217.0 |
At 27 April 2025 | 0.5 | 191.9 | 192.4 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
236
| 27 April 2025 | |||
| Fittings and | |||
| Land and buildings | equipment | Tot al | |
| £m | £m | £m | |
| COST | |||
At 29 April 2024 | 2.2 | 342.4 | 344.6 |
Additions | – | 68.0 | 68.0 |
Acquired on business acquisition (note 25) | – | 1.0 | 1.0 |
Disposals | – | (18.2) | (18.2) |
Disposals – exceptional items (note 4) | – | (3.8) | (3.8) |
Foreign exchange differences | – | (7.3) | (7.3) |
At 27 April 2025 | 2.2 | 382.1 | 384.3 |
| ACCUMUL ATED DE PRECIATION | |||
At 29 April 2024 | 1.6 | 151.6 | 153.2 |
Charge for the period | 0.1 | 40.7 | 40.8 |
Impairment – exceptional items (note 4) | – | 19.7 | 19.7 |
Disposals | – | (15.3) | (15.3) |
Disposals – exceptional items (note 4) | – | (3.2) | (3.2) |
Foreign exchange differences | – | (3.3) | (3.3) |
At 27 April 2025 | 1.7 | 190.2 | 191.9 |
| NET BOOK VALUE | |||
At 27 April 2025 | 0.5 | 191.9 | 192 .4 |
At 28 April 2024 | 0.6 | 190.8 | 191.4 |
Assets under construction totalled £25.6 million at 3 May 2026 (2025: £13.1 million). During the year, additions amounted to £23.8 million (2025: £11.7 million),
while £11.3 million (2025: £24.6 million) were completed and are now in operation. The cost of assets which continue to be used that have a £nil net book value
(excluding impaired assets) total £69.4 million (2025: £48.8 million).
Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes, a CGU is defined as the smallest identifiable group of assets that generate independent cash flows which are monitored by
management and the CODMs. The Group considers this to be showroom locations or offices. Each CGU is tested for impairment at the balance sheet date
if any indicators of impairment have been identified.
The value-in-use of each CGU is calculated based on the Group’s latest forecast cash flows, which have regard to historic performance and knowledge of the
current market, together with the Group’s views on the future achievable growth. Cash flows beyond year one are extrapolated using a long-term growth rate
based on management’s future expectations, with reference to forecast GDP growth. These growth rates do not exceed the long-term growth rate for the
Group’s operations in the relevant territory. Revenues used for showroom impairment include revenues generated by those showrooms only, and no overlay
is made for ecommerce sales.
The key assumptions in the value-in-use calculations are the growth rates of sales and gross profit margins, long-term growth rates and the risk-adjusted pre-tax
discount rates. Pre-tax discount rates are derived from the Group’s weighted average cost of capital, which has been calculated using the capital asset pricing
model, the inputs of which include a country risk-free rate, equity risk premium and a risk adjustment (beta). The pre-tax discount rates are 13.9% (2025: 13.3%)
in the UK and 13.2% (2025: 13.1%) in the US. Pre-tax discount rates are used to discount pre-tax cash flows. The post-tax discount rates, calculated in the same
manner as the pre-tax discount rates, are 10.7% (2025: 10.5%) in the UK and 10.1% (2025: 10.4%) in the US.
During the period, the Group recognised a net exceptional impairment charge of £4.1 million relating to right-of-use assets, and £3.5 million relating to property,
plant and equipment. The Group reviewed the profitability of its showroom network, taking into account the potential future impact on customer demand and
increased costs. At 3 May 2026, following the impairment having been booked, all showroom asset values are supported by their value-in-use recoverable amount.
As disclosed in the accounting policies (note 1), the cash flows used within the impairment model are based on assumptions which are sources of estimation
uncertainty and movements in these assumptions could lead to further impairments. Management has performed sensitivity analysis on the key assumptions
in the impairment model using reasonably possible changes in these key assumptions across the showroom portfolio.
Reducing the expected FY27 sales by 5.0% and modelling this lower performance through the outer periods would result in an increased impairment charge of
£2.1 million. A 2.0% increase in the discount rate would increase the impairment charge by £0.1 million. In combination, a 5.0% sales reduction and a 2.0% increase
in discount rate would increase the impairment charge by £2.7 million. This analysis does not assume any improvement in macroeconomic conditions or interest
rates. Reasonably possible changes of the other assumptions would have no further significant impact on the impairment charge.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
237
13. LEASES
Group as a lessee
Right-of-use assets have been grouped into two groups being Properties and Other. Properties are defined as land and buildings leased for our showrooms and offices
which are generally leased for between five and ten years with some office buildings leased for longer. Other leases are mainly motor vehicles which are in general
leased for four years. There are several lease contracts that include extension and termination options and variable lease payments. Management assesses the lease
term at inception based on facts and circumstances applicable to each property including the period over which the investment appraisal was initially considered.
Management reviews the retail lease portfolio on an ongoing basis, taking into account retail performance and future trading expectations. In certain instances,
management may exercise break options, negotiate lease reductions or decide not to negotiate a lease extension at the end of the lease term. The most significant
factor impacting future lease payments is the changes management chooses to make to the showroom portfolio.
A number of the retail property leases incur payments based on a percentage of revenue achieved at the location. Changes in future variable lease payments will
typically reflect changes in the Group’s retail revenues. In line with IFRS 16, variable lease payments which are not linked to an index are not included in the lease
liability.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
| Properties | Other | Tot al | |
| £m | £m | £m | |
At 28 April 2025 | 357.8 | 0.8 | 358.6 |
Additions | 31.3 | – | 31.3 |
Acquired on business acquisition (note 25) | 9.0 | – | 9.0 |
Lease surrenders and breaks | (8.2) | – | (8.2) |
Impairment – exceptional items (note 4) | (5.0) | – | (5.0) |
Impairment reversal – exceptional items (note 4) | 0.9 | – | 0.9 |
Depreciation | (53.5) | (0.4) | (53.9) |
Lease renewals | 10.1 | – | 10.1 |
Lease modifications | (1.6) | – | (1.6) |
Foreign exchange differences | (3.0) | – | (3.0) |
At 3 May 2026 | 337.8 | 0.4 | 338.2 |
| Properties | Other | Tot al | |
| £m | £m | £m | |
At 29 April 2024 | 380.6 | 1.2 | 381.8 |
Additions | 75.4 | 0.1 | 75.5 |
Acquired on business acquisition (note 25) | 1.9 | – | 1.9 |
Lease surrenders and breaks | (15.4) | – | (15.4) |
Impairment – exceptional items (note 4) | (26.8) | – | (26.8) |
Depreciation | (54.0) | (0.5) | (54.5) |
Depreciation – exceptional items (note 4) | (2.0) | – | (2.0) |
Lease renewals | 6.4 | – | 6.4 |
Lease modifications | 1.1 | – | 1.1 |
Foreign exchange differences | (9.4) | – | (9.4) |
At 27 April 2025 | 357.8 | 0.8 | 358.6 |
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liabilities
| Properties | Other | Tot al | |
| £m | £m | £m | |
At 28 April 2025 | (454.1) | (0.5) | (454.6) |
Additions | (29.9) | – | (29.9) |
Acquired on business acquisition (note 25) | (9.0) | – | (9.0) |
Lease surrenders and breaks | 13. 3 | – | 13.3 |
Interest (note 7) | (25.5) | – | (25.5) |
Lease renewals | (10.1) | – | (10.1) |
Lease modifications | 0.7 | – | 0.7 |
Payments | 83.5 | 0.4 | 83.9 |
Foreign exchange differences | 3.6 | – | 3.6 |
At 3 May 2026 | (427.5) | (0.1) | (427.6) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
238
Lease liabilities
| Properties | Other | Tot al | |
| £m | £m | £m | |
At 29 April 2024 | (459.3) | (1.1) | (460.4) |
Additions | (73.0) | (0.1) | (73.1) |
Acquired on business acquisition (note 25) | (1.9) | – | (1.9) |
Lease surrenders and breaks | 20.5 | – | 20.5 |
Interest (note 7) | (22.2) | – | (22.2) |
Interest – exceptional items (note 4) | (2.2) | – | (2.2) |
Lease renewals | (6.0) | – | (6.0) |
Lease modifications | (1.2) | 0.1 | (1.1) |
Payments | 80.0 | 0.6 | 80.6 |
Foreign exchange differences | 11. 2 | – | 11. 2 |
At 27 April 2025 | (454.1) | (0.5) | (454.6) |
The following are the amounts recognised in the Consolidated Income Statement:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Depreciation expense of right-of-use assets | (53.9) | (54.5) |
Depreciation expense of right-of-use assets – exceptional items (note 4) | – | (2.0) |
Interest expense on lease liabilities | (25.5) | (22.2) |
Interest expense on lease liabilities – exceptional items (note 4) | – | (2.2) |
Impairment of right-of-use assets – exceptional items (note 4) | (5.0) | (26.8) |
Impairment reversal of right-of-use assets – exceptional items (note 4) | 0.9 | – |
Gain on lease modifications and disposals | 4.2 | 5.5 |
Expense relating to short-term leases (included within cost of sales) | (1.2) | (1.1) |
Variable lease payments (included within cost of sales) | (3.9) | (5.0) |
Total amount recognised in the Consolidated Income Statement | (84.4) | (108.3) |
Rental expense for contracts not in the scope of IFRS 16 totalled £2.9 million (2025: £3.7 million). Contracts not in the scope of IFRS 16 are contracts that were
considered to be leases under IAS 17 which do not meet the definition under IFRS 16, principally because the supplier is considered to have substantive substitution
rights over the associated assets.
Total cash flows in relation to leases, as defined in IFRS 16, in the 53-week period ended 3 May 2026 are £90.1 million (2025: £87.5 million). This relates to
payments of £58.4 million (2025: £56.2 million) of lease principal, £25.5 million (2025: £24.4 million) of lease interest, £5.0 million (2025: £5.8 million) of variable
lease payments and £1.2 million (2025: £1.1 million) of other lease payments principally relating to short-term leases and leases in which tenancy has continued after
the lease term has ended.
Maturity analysis of lease liabilities
The below table gives the undiscounted cash flows which relate to the leases recognised in line with IFRS 16. For leases which contain a break clause, the full liability
to the end of the lease term is shown, unless highlighted in the narrative below.
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Within 1 year | 80.5 | 78.0 |
Between 1 and 2 years | 73.8 | 76.5 |
Between 2 and 3 years | 74.5 | 73.4 |
Between 3 and 4 years | 70.0 | 70.9 |
Between 4 and 5 years | 58.8 | 65.7 |
Total for the periods thereafter | 177.3 | 211. 5 |
Total | 534.9 | 576.0 |
As at 3 May 2026, nine (2025: 12) leases have cash flows that exceed ten years. The value of undiscounted cash flows greater than ten years totals £20.8 million
(2025: £28.0 million).
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
239
13. LEASES (CONTINUED)
Future possible cash outflows not included in the lease liability
Some leases contain break clauses to provide operational flexibility. In some instances, the Group has identified certain leases where it is reasonably likely that a
break will be served and as such has reflected this in the term of the lease. Potential future undiscounted lease payments not included in the reasonably certain
lease term and hence not included in lease liabilities total £1.9 million (2025: £9.9 million).
Future increases or decreases in rentals linked to an index or rate, which is applicable to two properties, are not included in the lease liability until the change in
cash flows take effect. Approximately 43.9% of leases (2025: 48.6%) will be subject to rent reviews in future periods with rental changes linked to rent reviews
which typically occur on a five-year basis. The Group is committed to payments totalling £16.9 million (2025: £31.0 million) in relation to leases that have been
agreed but have not yet commenced and as such, do not form part of the lease liability balance and are not included within the maturity analysis above.
Impairment of right-of-use assets
The Group has incurred an exceptional net impairment charge of £4.1 million (2025: £26.8 million) in the year in relation to right-of-use assets. Refer to note 12 for
further disclosure relating to impairment of non-current assets including right-of-use assets.
3 May 2026 | 27 April 2025 | |||
| Current | Non-current | Current | Non-current | |
| £m | £m | £m | £m | |
Trade receivables | 28.3 | – | 32.4 | – |
Other receivables | 11. 2 | 4.5 | 15.4 | 4.5 |
Allowance for expected credit losses | (0.4) | – | (0.9) | – |
39.1 | 4.5 | 46.9 | 4.5 | |
Prepayments | 9.4 | – | 9.1 | – |
Total | 48.5 | 4.5 | 56.0 | 4.5 |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Opening balance | 0.9 | 0.5 |
Increase/(decrease) in allowance | 3.0 | (0.1) |
Receivables written off as uncollectable | (3.5) | (0.1) |
Acquired on business combination | – | 0.6 |
Balance at period end | 0.4 | 0.9 |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Finished goods | 435.2 | 439.0 |
Work in progress | 17.1 | 8.4 |
Raw materials | 5.8 | – |
Inventories | 458.1 | 4 47.4 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
240
16. CASH AND CASH EQUIVALENTS
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Cash at bank and in hand | 42.0 | 80.4 |
Cash in transit | 23.1 | 18.5 |
Cash and cash equivalents | 65.1 | 98.9 |
Included in cash and cash equivalents is restricted cash of £19.9 million (2025: £19.2 million).
3 May 2026 | 27 April 2025 | |||
| Current | Non-current | Current | Non-current | |
| £m | £m | £m | £m | |
Trade payables | (112 .4) | – | (114.1) | – |
Other taxation and social security | (18.1) | – | (19.5) | – |
Accruals and deferred income | (104.5) | ( 7.3) | (121.3) | (4.6) |
Purchase commitment for non-controlling interests (note 25) | (4.5) | (4.4) | – | – |
Total | (239.5) | (11. 7 ) | (254.9) | (4.6) |
3 May 2026 | 27 April 2025 | |||
| Current | Non-current | Current | Non-current | |
| £m | £m | £m | £m | |
Dilapidations | (2.3) | (9.1) | (1.9) | (8.3) |
Onerous contracts | (0.3) | (1.4) | (0.5) | (2.0) |
Total | (2.6) | (10.5) | (2.4) | (10.3) |
| 53 week period | |
| ended | |
| 3 May 2026 | |
| £m | |
Opening balance | (10.2) |
Increase in provision | (2.1) |
Acquired on business acquisition | (0.2) |
Utilised | 1.1 |
Balance at period end | (11. 4 ) |
| 53 week period | |
| ended | |
| 3 May 2026 | |
| £m | |
Opening balance | (2.5) |
Released to Income Statement | 0.1 |
Utilised | 0.7 |
Balance at period end | (1.7) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
241
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| NON-CURRENT | ||
Ter m loan | (92.1) | (93.9) |
Multicurrency revolving loan facility | (30.0) | (101.2) |
Associated capitalised transaction costs | 1.6 | 2.3 |
Total borrowings | (120.5) | (192.8) |
| 28 April 2025 | Cash flow | Non-cash changes 1 | Foreign exchange | 3 May 2026 | |
| £m | £m | £m | £m | £m | |
Cash and cash equivalents | 98.9 | (33.6) | – | (0.2) | 65.1 |
Ter m loan | (93.9) | – | – | 1.8 | (92.1) |
Multicurrency revolving loan facility | (101.2) | 71.7 | – | (0.5) | (30.0) |
Net debt excluding capitalised transaction costs (pre-IFRS 16) | (96.2) | 38.1 | – | 1.1 | (57.0) |
Capitalised transaction costs | 2.3 | – | (0.7) | – | 1.6 |
Net debt (pre-IFRS 16) | (93.9) | 38.1 | (0.7) | 1.1 | (55.4) |
Lease liabilities | (454.6) | 83.9 | (60.5) | 3.6 | (427.6) |
Net debt (post-IFRS 16) | (548.5) | 122.0 | (61.2) | 4.7 | (483.0) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
242
20. POST-EMPLOYMENT BENEFIT OBLIGATIONS
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Administrative expenses | (0.2) | (0.2) |
Charge within labour costs and operating profit | (0.2) | (0.2) |
Defined benefit charge to the Consolidated Income Statement | (0.2) | (0.2) |
Defined contribution schemes | (3.9) | (3.5) |
Total charge to the Consolidated Income Statement | (4.1) | (3.7) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
243
20. POST-EMPLOYMENT BENEFIT OBLIGATIONS (CONTINUED)
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Actuarial gains due to changes in financial assumptions | 0.6 | 1.0 |
Actuarial losses due to experience adjustments | (0.1) | – |
Loss on scheme assets greater than discount rate | (0.1) | (0.7) |
Actuarial losses due to demographic changes | (0.2) | (0.2) |
Actuarial gains recognised in other comprehensive income | 0.2 | 0.1 |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Bonds | 13. 0 | 13.1 |
Fair value of scheme assets | 13.0 | 13.1 |
Present value of defined benefit obligation | (11. 8 ) | (12.6) |
Net pension asset | 1.2 | 0.5 |
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Opening defined benefit obligation | (12.6) | (13.4) |
Interest cost | (0.7) | (0.6) |
Actuarial gains on defined benefit obligation | 0.3 | 0.8 |
Benefits paid | 1.2 | 0.6 |
Closing defined benefit obligation | (11. 8 ) | (12.6) |
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Opening scheme assets | 13.1 | 13. 2 |
Return on scheme assets | 0.7 | 0.7 |
Actuarial losses on pension scheme assets | (0.1) | (0.7) |
Employer contributions | 0.7 | 0.7 |
Benefits paid | (1.2) | (0.6) |
Administrative expenses | (0.2) | (0.2) |
Closing scheme assets | 13.0 | 13.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
244
3 May 2026 | 27 April 2025 | |
Discount rate | 6.20% | 5.55% |
Rate of future inflation – RPI | 3.40% | 3.15% |
Rate of future inflation – CPI | 2.80% | 2.55% |
Rate of increase in pensions in payment | 3.15% | 2.95% |
Proportion of employees opting for a cash commutation | 100.0% | 100.0% |
3 May 2026 | 27 April 2025 | |||
| Non-pensioner | Non-pensioner | |||
| Pensioner aged 65 | aged 45 | Pensioner aged 65 | aged 45 | |
| Life expectancy at age 65 (years): | ||||
Male | 22 | 23 | 21 | 22 |
Female | 24 | 25 | 24 | 25 |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
0.25% increase in discount rate | 0.3 | 0.3 |
0.25% decrease in discount rate | (0.3) | (0.3) |
0.25% increase in pension growth rate | (0.2) | (0.3) |
0.25% decrease in pension growth rate | 0.2 | 0.3 |
1 year increase in life expectancy | (0.3) | (0.4) |
1 year decrease in life expectancy | 0.3 | 0.4 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
245
21. EQUITY
| Capital | Foreign | ||||||||
| Nominal | Share | redemption | Merger | Other | Retained | exchange | |||
| value | Shares | Share capital | premium | reserve | reserve | reserves | earnings | reserve | |
| £ | No. | £m | £m | £m | £m | £m | £m | £m | |
| As at 27 April 2025 | 0.0125 | 236,767,569 | 3.0 | 147.1 | – | (2.2) | (13.3) | 414.7 | (9.7) |
Other comprehensive income, net of tax | – | – | – | – | – | – | – | 99.0 | (5.1) |
Purchase of own shares for cancellation | – | – | – | – | – | – | (12.9) | – | – |
Own shares cancelled | – | (3,465,947) | (0.1) | – | 0.1 | – | 13.8 | (0.9) | – |
Purchase commitment for non-controlling interests (note 25) | – | – | – | – | – | – | (6.9) | – | – |
Share-based payment charge | – | – | – | – | – | – | – | 1.8 | – |
Share-based payments exercised | – | – | – | – | – | – | 0.8 | (0.8) | – |
Tax on items credited to equity | – | – | – | – | – | – | – | 0.3 | – |
As at 3 May 2026 | 0.0125 | 233,301,622 | 2.9 | 147.1 | 0.1 | (2.2) | (18.5) | 514.1 | (14.8) |
22. SHARE-BASED PAYMENTS
During the period to 3 May 2026, the Group operated four (2025: four) separate share-based payment schemes. The Group has granted a number of different
equity-based awards to employees which it has determined to be share-based payments as detailed below.
Long-Term Incentive Plan (LTIP)
The LTIP is a discretionary executive share plan under which the Board may grant options over shares in Watches of Switzerland Group PLC, subject to pre-
determined Adjusted EPS and Return on Capital Employed (ROCE) performance conditions. The Group grants awards with one to three-year performance
periods. Grants vest and become exercisable after the performance period and are awarded as nil-cost options. There are no cash settlement alternatives.
Details of the share options outstanding are as follows:
3 May 2026 | 27 April 2025 | |
Outstanding at 27 April 2025 | 1,703,490 | 2,093,838 |
Granted | 951,330 | 1,271,895 |
Exercised | (81,486) | (1,198,711) |
Forfeited/lapsed | (294,236) | (463,532) |
Outstanding at 3 May 2026 | 2,279,098 | 1,703,490 |
Exercisable price | £nil | £nil |
Exercisable at period end | 35,129 | 28,819 |
Average fair value at grant | £4.12 | £4.87 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
246
Deferred Bonus Plan (DBP)
The DBP is a discretionary bonus plan under which the Board may issue one-third of a bonus in the form of conditional share awards in Watches of Switzerland
Group PLC. The annual bonus is linked to annual earnings targets. Two-thirds of the bonus is settled in cash. The remaining third of the bonus is deferred as
share options and accounted for as an equity-settled share-based payment. These deferred shares are subject to a three-year vesting period with no additional
performance conditions except for continued employment. Deferred shares are awarded as nil-cost options. In the period ended 27 April 2025, the Remuneration
Committee determined that the Deferred Bonus Plan is limited to Executive Directors who have not met the shareholding guidelines. Where an Executive
Director has met their shareholding guideline, and for all other employees, annual bonuses are paid entirely in cash.
Details of the share options outstanding are as follows:
3 May 2026 | 27 April 2025 | |
Outstanding at 27 April 2025 | 146,558 | 372,886 |
Granted | – | 27, 541 |
Exercised | (18,652) | (251,975) |
Forfeited/lapsed | – | (1,894) |
Outstanding at 3 May 2026 | 127,906 | 146,558 |
Exercisable price | £nil | £nil |
Exercisable at period end | 70,312 | 40,203 |
Average fair value at grant | £6.82 | £6.92 |
Save As You Earn (SAYE) (UK)/Employee Stock Purchase Plan (ESPP) (US)
The Company operated one (2025: two) SAYE schemes for UK employees and one (2025: one) ESPP scheme for US employees in the period.
Options are granted at the prevailing market rate less a discount of 15%, being exercisable after three years (UK employees) and two years (US employees) from
the date of grant. The scheme permits a maximum saving of £500 (or US equivalent at the time of invitation) per month out of taxed income. SAYE/ESPP options
are accounted for as an equity-settled award under IFRS 2.
Details of the share options outstanding are as follows:
3 May 2026 | 27 April 2025 | |
Outstanding at 27 April 2025 | 754,455 | 202,549 |
Granted | – | 764,610 |
Forfeited | (179,062) | (212,704) |
Outstanding at 3 May 2026 | 573,393 | 754,455 |
Exercisable price | £nil | £nil |
Exercisable at period end | Nil | Nil |
Average fair value at grant | £3.49 | £3.99 |
FY22 Free share issue
During FY22, the Group issued 50 free shares to all colleagues who were employed by the Group on 15 December 2021. Employees were required to remain
employed for a period of three years to earn the shares. The UK shares are administered through a Share Incentive Plan. The US shares are issued under the LTIP
and subject to the Employee Benefit Trust. The Trust results are consolidated by the Group. During the year, the required three-year employment period ended,
giving employees the option to exercise shares earned.
Details of the share options outstanding are as follows:
3 May 2026 | 27 April 2025 | |
Outstanding at 27 April 2025 | 48,600 | 73,450 |
Exercised | (6,350) | (16,700) |
Forfeited | (2,200) | (8,150) |
Outstanding at 3 May 2026 | 40,050 | 48,600 |
Exercisable price | £nil | £nil |
Exercisable at period end | 40,050 | 48,600 |
Average fair value at grant | £12.66 | £12.66 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
247
22. SHARE-BASED PAYMENTS (CONTINUED)
Charged to the Consolidated Income Statement
The amounts recognised in the Consolidated Income Statement within administrative expenses (excluding employer’s national insurance) in relation to these
schemes were as follows:
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
LTIP | 1.4 | 0.4 |
DBP | 0.1 | 0.7 |
SAYE/ESPP | 0.3 | 0.5 |
Free shares | – | 0.2 |
1.8 | 1.8 |
Fair value of share schemes
The fair value of equity-settled share options and share awards granted is estimated at the date of grant using share option valuation models. The schemes are
valued using the Black-Scholes model.
The following tables list the inputs to the models for options and share-based payment costs during the year:
| LTI P | ||||
3 May 2026 | 27 April 2025 | 28 Apr 2024 | 30 Apr 2023 | |
Share price (£) | £3.27/£3.38 | £4.14/£4.56 | £4.89/£6.70 | £7. 51 |
Exercise price (£) | nil | nil | nil | nil |
Dividend yield (%) | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (%) | 3.86% | 3.83% | 4.39% | 3.72% |
Expected life of share option | 1-3 yrs | 1-3 yrs | 3 yrs | 3 yrs |
DBP | SAYE /E SPP | ||
27 April 2025 | 30 Apr 2023 | 3 May 2026 | |
Share price (£) | £3.59 | £7. 56 | £3.49 |
Exercise price (£) | nil | nil | nil |
Dividend yield (%) | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (%) | 3.83% | 3.71% | 3.83% |
Expected life of share option | 4 yrs | 4 yrs | UK 3 yrs |
| US 2 yrs |
No new schemes were entered into during the 53-week period ended 3 May 2026.
The Group did not enter into any share-based payment transactions with parties other than employees during the current period.
23. FINANCIAL INSTRUMENTS
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
| FINANCIAL ASSETS – HELD AT AMORTISED COST | ||
Trade and other receivables* | 37.3 | 51.4 |
Cash and cash equivalents | 65.1 | 98.9 |
Total financial assets | 102.4 | 150.3 |
| FINANCIAL LIABILITIES – HELD AT AMORTISED COST | ||
| Interest-bearing loans and borrowings: | ||
Term loan (net of capitalised transaction costs) | (91.6) | (93.2) |
Multicurrency revolving loan facility (net of capitalised transaction costs) | (28.9) | (99.6) |
Trade and other payables** | (206 .1) | (216.1) |
(326.6) | (408.9) | |
Lease liability (IFRS 16) | (427.6) | (454.6) |
Total financial liabilities | (754.2) | (863.5) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
248
| 3 May 2026 | ||||
| Between one and | Greater than five | |||
| Less than one year | five years | years | Tot al | |
| £m | £m | £m | £m | |
Ter m loan | – | (92.1) | – | (92.1) |
Multicurrency revolving loan facility | – | (30.0) | – | (30.0) |
Trade and other payables | (194.4) | (11.7 ) | – | (206 .1) |
Lease liabilities (IFRS 16) | (80.5) | (277.1) | (177.3) | (534.9) |
Total | (274.9) | (410.9) | (177.3) | (863.1) |
| 27 April 2025 | ||||
| Between one and | Greater than five | |||
| Less than one year | five years | years | Tot al | |
| £m | £m | £m | £m | |
Ter m loan | – | (93.2) | – | (93.2) |
Multicurrency revolving loan facility | – | (99.6) | – | (99.6) |
Trade and other payables | ( 211. 5) | (4.6) | – | (216.1) |
Lease liabilities (IFRS 16) | (78.0) | (286.5) | ( 211. 5) | (576.0) |
Total | (289.5) | (483.9) | ( 211. 5 ) | (984.9) |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
249
23. FINANCIAL INSTRUMENTS (CONTINUED)
| 53 week period | 52 week period | |
| ended 3 May | ended 27 April | |
| 2026 | 2025 | |
| £m | £m | |
Interest rate increase of 0.5% | (0.6) | (1.0) |
Interest rate decrease of 0.5% | 0.6 | 1.0 |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Not past due | 25.5 | 22.8 |
Less than one month past due | 1.1 | 3.9 |
One to two months past due | 0.5 | 2.0 |
More than two months past due | 1.2 | 3.7 |
Total | 28.3 | 32.4 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
250
| 3 May 2026 | ||||
| Sterling | US Dollar | Other | Tot al | |
| £m | £m | £m | £m | |
| FINANCIAL ASSETS | ||||
Trade and other receivables | 12. 5 | 23.5 | 1.3 | 37.3 |
Cash and cash equivalents | 36.6 | 28.3 | 0.2 | 65.1 |
Total financial assets | 49.1 | 51.8 | 1.5 | 102.4 |
| FINANCIAL LIABILITIES | ||||
Ter m loan | 0.5 | (92.1) | – | (91.6) |
Multicurrency revolving loan facility | (28.9) | – | – | (28.9) |
Trade and other payables | (88.4) | (105.2) | (12. 5) | (206.1) |
Lease liabilities | (235.7) | (190.5) | (1.4) | (427.6) |
Total financial liabilities | (352.5) | (387. 8) | (13.9) | (754.2) |
| 27 April 2025 | ||||
| Sterling | US Dollar | Other | Tot al | |
| £m | £m | £m | £m | |
| FINANCIAL ASSETS | ||||
Trade and other receivables | 18.5 | 32.9 | – | 51.4 |
Cash and cash equivalents | 61.1 | 37.4 | 0.4 | 98.9 |
Total financial assets | 79.6 | 70.3 | 0.4 | 150.3 |
| FINANCIAL LIABILITIES | ||||
Ter m loan | 0.7 | (93.9) | – | (93.2) |
Multicurrency revolving loan facility | (88.4) | (11. 2) | – | (99.6) |
Trade and other payables | (106.7) | (104.8) | (4.6) | (216.1) |
Lease liabilities | (265.5) | (186. 5) | (2.6) | (454.6) |
Total financial liabilities | (459.9) | (396.4) | (7.2) | (863.5) |
| Effect on profit | Effect on profit | ||
| (Increase)/ | after tax 53 week | after tax 52 week | |
| decrease | period ended | period ended | |
| in rate | 3 May 2026 | 27 April 2025 | |
| £m | £m | £m | |
US Dollar | (5%) | (2.7) | (1.9) |
US Dollar | 5% | 3.0 | 2.1 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
251
| 53 week period | 52 week period | |
| ended | ended | |
| 3 May 2026 | 27 April 2025 | |
| £m | £m | |
Short-term employment benefits – fixed pay | 1.7 | 1.5 |
Short-term employment benefits – variable pay | 1.8 | 0.3 |
Share-based payments | 0.8 | 0.3 |
Total | 4.3 | 2 .1 |
25. BUSINESS COMBINATIONS
Deutsch & Deutsch
On 22 January 2026, the Group, through a newly formed holding company Deutsch & Deutsch (WOS) LLC, acquired the trade and assets of four Deutsch &
Deutsch showrooms. As consideration, Deutsch & Deutsch (WOS) LLC paid £32.0 million as cash consideration and issued equity units in Deutsch & Deutsch
(WOS) LLC representing 12.19% NCI to the Sellers (Deutsch’s of McAllen, Inc., Deutsch Bros of El Paso, Ltd., Deutsch’s of Victoria II, LLC, and Relojs II, Ltd.). The
acquisition further advances the Group’s expansion strategy.
The business contributed revenue of £16.4 million from the 22 January 2026 acquisition date to 3 May 2026. The profit before tax contribution was £2.4 million in
this initial start-up period.
The following table summarises the consideration paid for the acquisition, and the provisional fair value of assets and liabilities acquired at the acquisition date:
| £m | |
Total cash consideration | 32.0 |
| Provisional fair value of net assets acquired | |
Inventories | 8.7 |
Trade and other receivables | 0.3 |
Intangibles – brand | 3.0 |
Property, plant and equipment | 6.5 |
Trade and other payables | (2.8) |
Right-of-use assets | 9.0 |
Lease liabilities | (9.0) |
Deferred tax asset | 2.3 |
Total identifiable net assets | 18.0 |
Non-controlling interest measured using the Proportionate Share method | (1.9) |
Goodwill | 15.9 |
Total assets acquired | 32.0 |
A deferred amount of £2.2 million is being held to cover the indemnification of certain acquisition balances for two years from the acquisition date.
The goodwill recognised is attributable to the profitability of the acquired showrooms and is expected to be deductible for tax purposes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
252
| £m | |
Total cash consideration net of cash acquired | 106.2 |
| Fair value of net assets acquired | |
Inventories | 53.9 |
Trade and other receivables | 13.2 |
Intangibles – licence with indefinite useful life | 57.2 |
Intangibles – brand | 0.5 |
Property, plant and equipment | 1.0 |
Trade and other payables | (32.3) |
Provisions | (0.4) |
Right-of-use assets | 1.9 |
Lease liabilities | (1.9) |
Deferred tax liability | (15. 5) |
Total identifiable net assets | 77.6 |
Goodwill | 28.6 |
Total assets acquired | 106.2 |
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
253
25. BUSINESS COMBINATIONS (CONTINUED)
| £m | |
Total cash consideration net of cash acquired | 10.7 |
| Fair value of net assets acquired | |
Inventories | 0.2 |
Trade and other receivables | 0.1 |
Intangibles – brand | 2.9 |
Trade and other payables | (1.4) |
Total identifiable net assets | 1.8 |
Goodwill | 8.9 |
Total assets acquired | 10.7 |
27. POST-BALANCE SHEET EVENTS
No post-balance sheet events have been identified.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
254
Note
3 May 2026
£m
27 April 2025
£m
FIXED ASSETS
Investments C2 471.9 471.9
CURRENT ASSETS
Debtors: amounts receivable within one year C3 1.0 0.2
CURRENT LIABILITIES
Creditors: amounts falling due within one year C4 – (13 .7 )
Net current assets/(liabilities) 1.0 (13.5)
Net assets 472.9 458.4
EQUITY
Share capital C6 2.9 3.0
Share premium C6 147.1 147.1
Capital redemption reserve C6 0.1 –
Other reserves C6 (11. 6 ) (13. 3)
Retained earnings 334.4 321.6
Total equity 472.9 458.4
The Company’s profit after tax was £12.7 million (2025: £9.4 million). The profit in year is a result of a dividend received which allowed repayment of management
recharges from subsidiary entities, and enabled the purchase of shares in respect of the share buyback.
The Financial Statements were approved and authorised for issue by the Board and were signed on its behalf by:
L A ROMBERG
CHIEF FINANCIAL OFFICER
Date: 13 July 2026
The notes on pages 257 to 260 form part of these Financial Statements.
Company number: 11838443
COMPANY BALANCE SHEET
AS AT 3 MAY 2026
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
255
Share capital
£m
Share premium
£m
Capital
redemption
reserve
£m
Other reserves
£m
Retained earnings
£m
Total equity
attributable to
owners
£m
Balance at 28 April 2024 3.0 147.1 – (23.4) 345.5 472.2
Profit for the financial period – – – – 9.4 9.4
Purchase of own shares for cancellation – – – (12.1) – (12.1)
Own shares cancelled – – – 11. 3 (11. 3 ) –
Committed share buyback – – – – (12 .9) (12.9)
Share-based payments charge – – – – 1.8 1.8
Share-based payments exercised – – – 10.9 (10.9) –
Balance at 27 April 2025 3.0 147.1 – (13.3) 321.6 458.4
Profit for the financial period – – – – 12.7 12.7
Purchase of own shares for cancellation – – – (12.9) – (12.9)
Own shares cancelled (0.1) – 0.1 13. 8 (0.9) 12.9
Share-based payments charge – – – – 1.8 1.8
Share-based payments exercised – – – 0.8 (0.8) –
Balance at 3 May 2026 2.9 147.1 0.1 (11. 6) 334.4 472.9
COMPANY STATEMENT OF CHANGES IN EQUITY
AS AT 3 MAY 2026
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
256
C1. GENERAL INFORMATION
Watches of Switzerland Group PLC (the ‘Company’) is a public limited company, limited by shares, which is listed on the London Stock Exchange and incorporated
and domiciled in England and Wales. The registered number is 11838443 and the address of the registered office is Aurum House, 2 Elland Road, Braunstone,
Leicester, LE3 1TT.
These Financial Statements present information about the Company as an individual undertaking and not about its Group. The Financial Statements of Watches of
Switzerland Group PLC have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (FRS 102) and the Companies Act 2006. The Financial Statements are presented
in Pounds Sterling (£), which is the Group’s presentational currency, and are shown in £millions to one decimal place.
Accounting policies
The accounting policies set out in the notes below have been applied in preparing the Financial Statements for the 53-week period ended 3 May 2026 and the
comparative information presented in these Financial Statements for the 52-week period ended 27 April 2025.
The Company is included within the Consolidated Financial Statements of Watches of Switzerland Group PLC. The Consolidated Financial Statements of Watches
of Switzerland Group PLC are prepared in accordance with IFRS and are publicly available. In these Financial Statements, the Company is considered to be a
qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:
– The requirement to prepare a statement of cash flows
– Certain disclosures in relation to share-based payments
– Key Management Personnel compensation
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the Company is not presented as part of the Financial Statements.
The Company’s accounting policies are the same as those set out in note 1 of the Consolidated Financial Statements, unless noted below.
Investments
Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary
undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid.
Impairment
The carrying values of non-financial assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any impairment
loss arises, the asset is adjusted to its estimated recoverable amount and the difference is recognised in the Income Statement.
Trade and other debtors/creditors
Trade and other debtors are recognised initially at transaction price plus attributable transaction costs. Trade and other creditors are recognised initially at
transaction price less attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less
any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal
business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.
Share-based payments
Some employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions). The fair value of the equity-settled awards is calculated at grant date using a Black-Scholes model.
The resulting cost is charged in the Income Statement over the vesting period of the option or award and is regularly reviewed and adjusted for the expected and
actual number of options or awards vesting. This applies to LTIP Awards, Deferred Share Bonus Schemes, Save as You Earn and Employee Stock Purchase Plan
Awards, and Free Share Awards.
Service and non-service performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. No expense is recognised for
awards that do not ultimately vest because of non-market performance and/or service conditions that have not been met.
The social security contributions payable in connection with the grant of the share options is determined at each balance sheet date as a liability with the total cost
recognised in the Income Statement over the vesting period.
Own shares held
Own shares represent the shares of Watches of Switzerland Group PLC that are held in an Employee Benefit Trust which has been set up for this purpose. The
Company adopts a ‘look-through’ approach which, in substance, accounts for the Trust as an extension of the Company. Own shares are recorded at cost and are
deducted from equity.
Financial risk management
The Company’s financial risk is managed as part of the Group’s strategy and policies as discussed in note 23 to the Consolidated Financial Statements.
Company result for the period
In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own Income Statement or
Statement of Comprehensive Income.
Directors’ remuneration and staff numbers
The Company has no employees other than the Directors, who did not receive any remuneration for their services directly from the Company in either the
current or preceding period. Refer to note 24 to the Group Financial Statements for Key Management Personnel compensation.
External Auditor’s remuneration
The remuneration paid to the External Auditor in relation to the audit of the Company is disclosed in note 5 to the Consolidated Financial Statements. The fees for
the audit of the Company’s Financial Statements are borne by a subsidiary of the Company and are not recharged.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
257
C2. FIXED ASSET INVESTMENTS
Our activities and interests are operated through subsidiaries, joint ventures and associates which are subject to the laws and regulations of many different
jurisdictions. As at 3 May 2026:
Entity Principal activity
Country of
incorporation Registered office
Type of share held
by the Group
Proportion of
ordinary shares
held by Group
companies
Jewel UK Midco Limited* Intermediate holding
company
England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Jewel UK Bidco Limited Intermediate holding
company
England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Watches of Switzerland Operations
Limited
Intermediate holding
company
England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Aurum Acquisitions Limited Intermediate holding
company
England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Watches of Switzerland Company
Limited
Retailer England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Mappin & Webb Limited Non-trading England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Goldsmiths Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
WoS Dormant 1 Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
WoS Dormant 2 Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Aurum Insurance (Guernsey)
Limited**
Captive insurance
company
Guernsey Heritage Hall, Le Marchant Street,
St Peter Port, Guernsey GY1 4JH
Ordinary 100%
Watches of Switzerland Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary &
redeemable preference
100%
Aurum Pension Trustees Limited Pension trustee
company
England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Audemars Piguet (Manchester)
Limited
Trading England and
Wales
Audemars Piguet (UK) Limited, 82-84 Grosvenor
Street, 1st Floor, London W1K 3JZ
Ordinary 40%
Watches of Switzerland Group USA
Inc
Holding company USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland (Nevada)
LLC
Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland (A/S) LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Mayors Jewelers LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Roberto Coin Inc. Wholesaler
and Retailer
USA 579 5th Avenue, 17th Floor, New York 10017 Ordinary 100%
Deutsch & Deutsch (WOS) LLC Retailer USA 1209 Orange Street, Wilmington, Delaware 19801 Ordinary 87.81%
RC Employee Services LLC Non-trading USA 579 5th Avenue, 17th Floor, New York 10017 Ordinary 100%
RBC 100 LLC Non-trading USA 579 5th Avenue, 17th Floor, New York 10017 Ordinary 100%
Hodinkee LLC Holding USA 13450 W. Sunrise Blvd. Suite 500, Sunrise FL 33323 Ordinary 100%
Hodinkee Insurance Holding Inc. Holding USA 255 Centre Street, 4th Floor, New York 10013 Ordinary 100%
Hodinkee Insurance Agency Inc. Trading USA 255 Centre Street, 4th Floor, New York 10013 Ordinary 100%
Mayors Jewelers of Florida LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland Group
(Denmark) Aps
Non-trading Denmark Store Kongensgade 68, 1264 København K,
Denmark
Ordinary 100%
WOSG (Germany) GmbH Non-trading Germany Maximiliansplatz 17, 80333, Munchen, Germany Ordinary 100%
* Investment in Jewel UK Midco is directly held. All other investments are indirectly held
** Results of this company are fully taxable in the UK as a controlled foreign company
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
258
All subsidiary undertakings are included in the Consolidated Financial Statements. The proportion of the voting rights in the subsidiary undertakings held directly
by the Company do not differ from the proportion of ordinary shares held.
Investment in subsidiaries at the period end was as follows:
3 May 2026
£m
27 April 2025
£m
Investment in subsidiaries
471.9
471.9
Investments in Company undertakings are recorded at cost, which is the fair value of the consideration paid.
C3. DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR
3 May 2026
£m
27 April 2025
£m
Amounts owed by Group undertakings
1.0
0.2
Amounts owed by Group undertakings are unsecured and repayable on demand.
C4. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
3 May 2026
£m
27 April 2025
£m
Other creditors
–
(13 .7 )
At 27 April 2025, other creditors included £13.7 million in respect of the share buyback programme, which was settled in the current period.
C5. FINANCIAL INSTRUMENTS
3 May 2026
£m
28 April 2024
£m
FINANCIAL ASSETS – HELD AT AMORTISED COST
Amounts owed by Group undertakings
1.0
0.2
FINANCIAL LIABILITIES – HELD AT AMORTISED COST
Other creditors
–
(13 .7 )
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
259
C6. EQUITY
Nominal value
£
Shares
No.
Share capital
£m
Share premium
£m
Capital
redemption
reserve
£m
Other reserves
£m
Retained earnings
£m
As at 27 April 2025 0.0125 236,767,569 3.0 147.1 – (13.3) 321.6
Profit for the financial period – – – – – – 12.7
Purchase of own shares for cancellation – – – – – (12.9) –
Own shares cancelled – (3,465,947) (0.1) – 0.1 13. 8 (0.9)
Share-based payments charge – – – – – – 1.8
Share-based payments exercised – – – – – 0.8 (0.8)
As at 3 May 2026 0.0125 233,301,622 2.9 147.1 0.1 (11. 6 ) 334.4
Share capital
233,301,622 ordinary shares of £0.0125 nominal value.
Share premium
This reserve represents the amount of proceeds received for shares in excess of their nominal value of £0.0125 per share.
Capital redemption reserve
The capital redemption reserve relates to the repurchase and cancellation of shares of the Company. During the year, the aggregate nominal value of shares
cancelled and transferred to the capital redemption reserve was £43,324, resulting in a cumulative balance of £78,358 (2025: £35,034).
Other reserves
Other reserves represent own shares purchased by the Company. These shares are held by an Employee Benefit Trust. The Company adopts a ‘look-through’
approach which, in substance, accounts for the Trust as an extension of the Company. Own shares are recorded at cost. At the year end the Company held
1,556,055 (2025: 1,889,509) own shares.
During the period to 27 April 2025, the Company announced a £25.0 million share buyback programme, of which £12.1 million of shares had been purchased for
cancellation and £12.9 million of share buyback was committed and accrued in retained earnings in the prior period. The outstanding £12.9 million share buyback
was purchased, paid, and cancelled in the current period. £0.9 million of shares purchased in the prior period but paid and cancelled in the current period were
transferred to retained earnings.
C7. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemptions under FRS 102.33 ‘Related Party Transactions’ for wholly owned subsidiaries not to disclose intra-group
transactions.
C8. SHARE-BASED PAYMENTS
Details of the Company’s share-based payments are disclosed within note 22 to the Consolidated Financial Statements.
C9. GUARANTEES
At the date of signing the accounts, the Company has provided cross guarantee arrangements to Barclays Bank PLC, BNP Paribas London Branch, Citibank N.A.
London Branch, Fifth Third Bank National Association, HSBC UK Bank PLC, Lloyds Bank PLC, National Westminster Bank PLC, Northern Bank Limited Trading as
Danske Bank and Crédit Industriel et Commercial London Branch in respect of the obligations of certain fellow subsidiary undertakings in relation to the Group’s
lending facilities.
C10. POST-BALANCE SHEET EVENTS
No post-balance sheet events have been identified.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
CONTINUED
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
260
ALTERNATIVE PERFORMANCE MEASURES
The Directors use Alternative Performance Measures (APMs) as they believe
these measures provide additional useful information on the underlying trends,
performance and position of the Group. These measures are used for
performance analysis. The APMs are not defined by IFRS and therefore may
not be directly comparable with other companies’ APMs. These measures are
not intended to be a substitute for, or superior to, IFRS measures.
The majority of the Group’s APMs are on a pre-IFRS 16 basis. This aligns with
the management reporting used to inform business decisions, investment
appraisals, incentive schemes and banking covenants.
To ensure APMs are balanced between Financial and Non-Financial
performance, and to align to current business segments, 4-wall EBITDA %
has been removed.
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBIT MARGIN
For each of these areas as defined in the Glossary, the Group shows the
measures as a percentage of Group revenue.
Why used
Profitability as a percentage of Group revenue is shown to understand how
effectively the Group is managing its cost base.
Reconciliation to IFRS measures
£million FY26 FY25
Revenue 1,827.9 1,651.5
Net margin 651.3 598.6
35.6% 36.3%
EBITDA (unadjusted) 208.2 199.4
11.4% 12.1%
Adjusted EBITDA 202.2 192.3
11.1% 11.6%
Adjusted EBIT (segmental profit) 154.8 149.7
8.5% 9.1%
ADJUSTED EARNINGS BEFORE INTEREST AND TAX (ADJUSTED EBIT)
Operating profit before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional costs and IFRS 16
adjustments to allow for comparability between years.
This measure was linked to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled in note 2 to the Consolidated Financial Statements.
ADJUSTED EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION (ADJUSTED EBITDA)
EBITDA before exceptional items presented in the Group’s Consolidated Income
Statement. Shown on a continuing basis and before the impact of IFRS 16.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years. This measure was linked
to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled within note 2 to the Consolidated Financial Statements.
ADJUSTED EARNINGS PER SHARE (ADJUSTED EPS)
Basic Earnings Per Share before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years. This measure was linked
to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled within note 9 to the Consolidated Financial Statements.
GLOSSARY
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
261
GLOSSARY
CONTINUED
ADJUSTED PROFIT BEFORE TAX (ADJUSTED PBT)
Profit before tax before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years.
Reconciliation to IFRS measure
£million FY26 FY25
Segment profit (as reconciled in note 2 to the
Consolidated Financial Statements)
154.8 149.7
Net finance costs excluding exceptional items (note 7) (36.5) (35.8)
IFRS 16 lease interest (note 13) 25.5 22.2
Reversal of pre-IFRS 16 onerous lease interest (0.4) –
Adjusted profit before tax 143.4 136.1
AVERAGE RETAIL SELLING PRICE (ASP)
ASP represents gross revenue generated in the period from sales of the category,
divided by the total number of units of such products sold during the period. This
metric is a measure of sales performance.
Why used
Measure of sales performance.
Reconciliation to IFRS measures
Not applicable.
CONSTANT CURRENCY BASIS
Results for the period had the exchange rates remained constant from the
comparative period.
Why used
Measure of revenue growth that excludes the impact of foreign exchange.
Reconciliation
Revenue (£/US$ million)
FY26 Group revenue (£) 1,827.9
FY26 US revenue ($) 1,245.0
FY26 US revenue (£) @ FY26 exchange rate 927.2
FY26 US revenue (£) @ FY25 exchange rate 972.0
FY26 Group revenue (£) at constant currency 1,872.7
Adjusted EBIT (£/US$ million)
FY26 Group adjusted EBIT (£) 154.8
FY26 US adjusted EBIT ($) 128.1
FY26 US adjusted EBIT (£) @ FY26 exchange rate 95.4
FY26 US adjusted EBIT (£) @ FY25 exchange rate 100.0
FY26 Group adjusted EBIT (£) at constant currency 159.4
FY26 exchange rate £1: $1.34
FY25 exchange rate £1: $1.28
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION (EBITDA)
EBITDA before exceptional items presented in the Group’s Consolidated
Income Statement. Shown on a continuing basis before the impact of IFRS 16
and showroom opening and closing costs. These costs include rent (pre-IFRS
16), rates, payroll and other costs associated with the opening or closing of
showrooms, or during closures when refurbishments are taking place.
Why used
Measure of profitability that excludes one-off exceptional and non-underlying
items, IFRS 16 adjustments and showroom opening and closing costs to allow
for comparability between years.
Reconciliation to IFRS measures
£million FY26 FY25
Adjusted EBITDA 202.2 192.3
Showroom opening and closing costs 6.0 6.9
Share of result of joint venture and associates – 0.2
EBITDA 208.2 199.4
EXCEPTIONAL ITEMS
Items that in the judgement of the Directors need to be disclosed by virtue
of their size, nature or incidence, in order to draw the attention of the reader
and to show the underlying business performance of the Group.
Why used
Draws the attention of the reader and shows the items that are significant
by virtue of their size, nature or incidence.
Reconciliation to IFRS measures
Disclosed in note 4 to the Group’s Consolidated Financial Statements.
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
262
FREE CASH FLOW
Cash flow shown on a pre-IFRS 16 basis excluding expansionary capex,
acquisitions of subsidiaries, exceptional items, financing activities and the
purchase of own shares.
Why used
Represents the cash generated from operations including maintenance of capital
assets. Demonstrates the amount of available cash flow for discretionary
activities such as expansionary capex, dividends or acquisitions
Reconciliation to IFRS measures
£million FY26 FY25
Net decrease in cash and cash equivalents (33.6) (15.4)
Net financing cash flow 182.1 21.1
Interest paid (12.7) (13.4)
Lease payments (83.9) (80.6)
Acquisitions 39.3 106.9
Investment in joint venture and associates – 0.7
Exceptional items – cash (note 4) 5.0 8.6
Expansionary capex 65.9 72.6
Disposal of property, plant and equipment (0.4) (2.7)
Free cash flow 161.7 97.8
FREE CASH FLOW CONVERSION
Free cash flow divided by Adjusted EBITDA.
Why used
Measurement of the Group’s ability to convert profit into free cash flow.
Reconciliation to IFRS measures
Free cash flow of £161.7 million divided by Adjusted EBITDA of £202.2 million
shown as a percentage.
LIQUIDITY HEADROOM
Liquidity headroom is unrestricted cash plus undrawn available facilities.
Why used
Liquidity headroom shows the amount of unrestricted funds available to the Group.
Reconciliation to IFRS measures
£million FY26 FY25
Multicurrency revolving credit facility 275.0 275.0
Term loan ($125.0 million USD) 92.1 93.9
Total facility 367.1 368.9
Facility drawn (122.1) (195.1)
Unrestricted cash (note 16) 45.2 79.7
Total headroom 290.2 253.5
NET CASH/(DEBT)
Total borrowings (excluding capitalised transaction costs) less cash and cash
equivalents and excluding IFRS 16 lease liabilities.
Why used
Measures the Group’s indebtedness.
Reconciliation to IFRS measures
Reconciled in note 19 to the Consolidated Financial Statements.
NET MARGIN
Revenue less inventory recognised as an expense, commissions paid to
the providers of interest-free credit and inventory provision movements.
Why used
Measures the profit made from the sale of inventory before showroom
or overhead costs.
Reconciliation to IFRS measures
£million FY26 FY25
Revenue 1,827.9 1,651.5
Inventory recognised as an expense (1,182.4) (1,064.4)
Other inc. supplier incentives 5.8 11.5
Net margin 651.3 598.6
RETURN ON CAPITAL EMPLOYED (ROCE)
ROCE is defined as Adjusted EBIT divided by average capital employed,
calculated on a Last Twelve Months (LTM) basis. Average capital employed is
total assets less current liabilities. It is presented pre-IFRS 16 and post-IFRS 16.
Why used
ROCE demonstrates the efficiency with which the Group utilises capital.
This measure was linked to management incentives in the financial year.
Reconciliation to IFRS measures
Adjusted EBIT divided by the average capital employed, which is calculated
as follows:
£million FY26 FY25
Pre-IFRS 16 total assets 1,129.5 1,123.0
Pre-IFRS 16 current liabilities (260.9) (275.0)
Pre-IFRS 16 capital employed 868.6 848.0
IFRS 16 adjustments 291.3 313.8
Post-IFRS 16 capital employed 1,159.9 1,161.8
Pre-IFRS 16 average capital employed 858.3 788.6
Post-IFRS 16 average capital employed 1,160.9 1,107.4
Pre-IFRS 16 and pre-exceptional Adjusted EBIT 154.8 149.7
IFRS 16 adjustments 24.0 19.7
Post-IFRS 16 and pre-exceptional Adjusted EBIT 178.8 169.4
OTHER DEFINITIONS
EXPANSIONARY CAPITAL EXPENDITURE/CAPEX
Expansionary capital expenditure relates to new showrooms or offices,
relocations or refurbishments greater than £250,000.
LUXURY WATCHES
Watches that have a Recommended Retail Price greater than £1,000. In the period,
this definition has been updated to include brands considered to be luxury by
virtue of the materials used and craftsmanship.
LUXURY JEWELLERY
Jewellery that has a Recommended Retail Price greater than £500.
SHOWROOM MAINTENANCE CAPITAL EXPENDITURE/CAPEX
Capital expenditure which is not considered expansionary.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
263
GLOSSARY
CONTINUED
IFRS 16 ADJUSTMENTS
The following tables reconcile from pre-IFRS 16 balances to statutory
post-IFRS 16 balances.
FY26 Consolidated Income Statement
£million
Pre-IFRS 16
and
exceptional
items
IFRS 16
adjustments
Exceptional
items Statutory
Revenue 1,827.9 – – 1,827.9
Net margin 651.3 – – 651.3
Showroom costs (313.7) 71.2 – (242.5)
Overheads (129.4) – (3.2) (132.6)
EBITDA 208.2 71.2 (3.2) 276.2
Showroom opening and closing
costs (6.0) 4.3 – (1.7)
Share of result of joint venture
and associates
– – – –
Adjusted EBITDA 202.2 75.5 (3.2) 274.5
Depreciation, amortisation, loss
on disposal, impairment of fixed
assets and lease modifications
(47.4) (51.5) (5.6) (104.5)
Adjusted EBIT (segment profit) 154.8 24.0 (8.8) 170.0
Net finance costs (11.4) (25.1) – (36.5)
Adjusted profit before tax 143.4 (1.1) (8.8) 133.5
Adjusted Basic EPS 45.2p (0.4)p (2.2)p 42.6p
FY26 Balance Sheet
£million Pre-IFRS 16
IFRS 16
adjustments Post-IFRS 16
Goodwill and intangibles 319.7 – 319.7
Property, plant and equipment 218.0 (1.0) 217.0
IFRS 16 right-of-use assets – 338.2 338.2
Investment in joint venture and associates 0.5 – 0.5
Inventories 458.1 – 458.1
Trade and other receivables 62.4 (9.4) 53.0
Trade and other payables (296.2) 45.0 (251.2)
IFRS 16 lease liabilities – (427.6) (427.6)
Net debt (57.0) – (57.0)
Other (49.5) 27.5 (22.0)
Net assets 656.0 (27.3) 628.7
FY25 Consolidated Income Statement
£million
Pre-IFRS 16
and
exceptional
items
IFRS 16
adjustments
Exceptional
items Statutory
Revenue 1,651.5 – – 1,651.5
Net margin 598.6 – (2.0) 596.6
Showroom costs (292.7) 65.9 – (226.8)
Overheads (106.5) – (7.0) (113.5)
EBITDA 199.4 65.9 (9.0) 256.3
Showroom opening and closing
costs (6.9) 4.7 – (2.2)
Share of loss of joint venture and
associates
(0.2) – – (0.2)
Adjusted EBITDA 192.3 70.6 (9.0) 253.9
Depreciation, amortisation, loss
on disposal, impairment of fixed
assets and lease modifications
(42.6) (50.9) (46.5) (140.0)
Adjusted EBIT (segment profit) 149.7 19.7 (55.5) 113.9
Net finance costs (13.6) (22.2) (2.2) (38.0)
Adjusted profit before tax 136.1 (2.5) (57.7) 75.9
Adjusted Basic EPS 41.6p (0.8)p (18.0)p 22.8p
FY25 Balance Sheet
£million Pre-IFRS 16
IFRS 16
adjustments Post-IFRS 16
Goodwill and intangibles 304.1 – 304.1
Property, plant and equipment 191.9 0.5 192.4
IFRS 16 right-of-use assets – 358.6 358.6
Investment in joint venture and associates 0.5 – 0.5
Inventories 447.4 – 447.4
Trade and other receivables 71.1 (10.6) 60.5
Trade and other payables (305.5) 46.0 (259.5)
IFRS 16 lease liabilities – (454.6) (454.6)
Net debt (96.2) – (96.2)
Other (47.0) 33.4 (13.6)
Net assets 566.3 (26.7) 539.6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
264
FY26 Cash Flow
£million Pre-IFRS 16
IFRS 16
adjustments
Post-IFRS
16
Adjusted EBITDA 202.2 75.5 277.7
Share-based payment charge 1.8 – 1.8
Share of result of joint venture and associates – – –
Working capital (4.3) 7.4 3.1
Defined benefit scheme pension contributions (0.7) – (0.7)
Taxation (23.3) – (23.3)
Cash generated from operating activities 175.7 82.9 258.6
Maintenance capex (3.0) – (3.0)
Net interest (11.0) (25.5) (36.5)
Free cash flow 161.7 57.4 219.1
Expansionary capex (65.9) 1.0 (64.9)
Acquisitions (inc. contingent consideration) (39.3) – (39.3)
Share buyback (13.8) – (13.8)
Disposal of property, plant and equipment 0.4 – 0.4
Lease payments – (58.4) (58.4)
Exceptional items – cash (5.0) – (5.0)
Cash flow 38.1 – 38.1
Net repayment of borrowings (71.7) – (71.7)
Net decrease in cash and cash equivalents (33.6) – (33.6)
FY25 Cash Flow
£million Pre-IFRS 16
IFRS 16
adjustments
Post-IFRS
16
Adjusted EBITDA 192.3 70.6 262.9
Share-based payment charge 1.8 – 1.8
Share of loss of joint venture and associates 0.2 – 0.2
Working capital (52.2) 10.0 (42.2)
Defined benefit scheme pension contributions (0.7) – (0.7)
Taxation (29.7) – (29.7)
Cash generated from operating activities 111.7 80.6 192.3
Maintenance capex (2.8) – (2.8)
Net interest (11.1) (24.4) (35.5)
Free cash flow 97.8 56.2 154.0
Expansionary capex (72.6) – (72.6)
Acquisitions (inc. contingent consideration) (106.9) – (106.9)
Investment in joint venture and associates (0.7) – (0.7)
Share buyback (11.3) – (11.3)
Disposal of property, plant and equipment 2.7 – 2.7
Costs directly attributable to raising new loan facility (1.5) – (1.5)
Lease payments – (56.2) (56.2)
Exceptional items – cash (8.6) – (8.6)
Cash flow (101.1) – (101.1)
Net proceeds of borrowings 85.7 – 85.7
Net decrease in cash and cash equivalents (15.4) – (15.4)
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
265
COMPANY
Watches of Switzerland Group PLC
Registered office address
Aurum House, 2 Elland Road, Braunstone, Leicester LE3 1TT
Registered in England and Wales
Company Number: 11838443
VAT number: 834 8634 04
ADVISERS
Independent Auditor
Ernst & Young LLP, 1 More London Place, London, SE1 2AF
Corporate solicitors
Slaughter and May, One Bunhill Row, London, EC1Y 8YY
Registrars
Equiniti, Highdown House, Yeoman Way, Worthing, West Sussex, BN99 3HH
Joint brokers
Barclays Bank plc, 5 The North Colonnade, Canary Wharf, London, E14 4BB
BofA Securities, 2 King Edward Street, London, EC1A 1HQ
UBS AG London Branch, 5 Broadgate, London, EC2M 2QS
Financial PR
Headland PR Consultancy LLP, Cannon Green, 27 Bush Lane, London,
EC4R 0AA
FINANCIAL CALENDAR
AGM and Trading Update: 3 September 2026
Trading update: November 2026
H1 FY27 results: December 2026
Trading Update: February 2027
Financial year-end: 2 May 2027
ANNUAL GENERAL MEETING
The AGM will be held at 2.30pm on Thursday, 3 September 2026 at our
offices at 36 North Row, London, W1K 6DH. The Notice of Meeting which
accompanies this report and accounts sets out the business to be transacted.
SHAREHOLDING INFORMATION
Registrars
Please contact our Registrar Equiniti directly for all enquiries about your
shareholding. Visit their website shareview.co.uk for online information about
your shareholding. You will need your shareholder reference number which
can be found on your share certificate or telephone the Registrar direct
on +44 (0)371 384 2577. The overseas shareholder helpline number is
+44 (0)371 384 2577. Lines are open 8.30am to 5.30pm Monday to Friday.
For more information see thewosgroupplc.com/investors/shareholder-contacts.
FORWARD LOOKING STATEMENTS
Cautionary statement: The Annual Report and Accounts contain certain
forward looking statements with respect to the operations, performance and
financial conditions of the Group. By their nature, these statements involve
uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. The forward looking
statements reflect knowledge and information available at the date of
preparation of this Annual Report and Accounts and the Company undertakes
no obligation to update these forward looking statements. Nothing in this
Annual Report and Accounts should be construed as a profit forecast. Certain
regulatory performance data contained in this Annual Report and Accounts are
subject to regulatory audit.
TERMS USED IN THIS REPORT
The term ‘Group’ means Watches of Switzerland Group PLC (Company
registration number 11838443) and its subsidiaries, associates and joint ventures.
ONLINE ANNUAL REPORT
Our Annual Report and Accounts are available online. View or download the full
Annual Report and Accounts from: thewosgroupplc.com/investors/results-centre.
WARNING TO SHAREHOLDERS
Please be very wary of any unsolicited contact about your investments or offers
of free company reports. It may be from an overseas ‘broker’ who could sell
you worthless or high risk shares. If you deal with an unauthorised firm, you will
not be eligible to receive payment under the Financial Services Compensation
Scheme. Further information and a list of unauthorised firms that have targeted
UK investors is available from the Financial Conduct Authority at: fca.org.uk.
SHAREHOLDER INFORMATION FOR WATCHES OF
SWITZERLAND GROUP PLC
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2026
266
Printed by Principal Colour on FSC
®
certified paper.
Principal Colour works to the EMAS standard and its Environmental Management System is certified to
ISO 14001
This report is printed on Splendorgel EW digital uncoated paper which is derived from sustainable
sources. Manufactured at a paper mill registered to the Environmental Management System ISO 14001
and Forest Stewardship Council
®
chain of custody certified.
Designed and produced by SampsonMay
Telephone: 020 7403 4099
www.sampsonmay.com
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
267
WATCHES OF SWITZERLAND GROUP PLC
AURUM HOUSE
2 ELLAND ROAD
LEICESTER
LE3 1TT
THEWOSGROUPPLC.COM