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Watches of Switzerland show the rich are still spending

by LLB Reporter
18th May 22 10:28 am

If you’ve relatively wealthy the current inflationary pressures seen around the world are unlikely to have changed your lifestyle. That’s evident in the latest updates from Burberry and Watches of Switzerland which are still enjoying a boom in luxury goods sales.

Someone who is minted probably wouldn’t even notice if their energy bills had gone up or the price of their weekly food shop is a little bit more. Therefore, they certainly aren’t going to cut back on luxuries like a nice handbag or a beautiful watch.

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AJ Bell’s Russ Mould said: “Burberry’s post-Covid recovery still has more to go, given it should see greater business once Asian tourists start travelling the world again. They have historically been keen buyers of Burberry products on their travels. China’s Covid resurgence is a headwind for now, but one might presume this is only a short-term issue. “Watches of Switzerland has done extremely well in the UK and US and is now expanding into Continental Europe, suggesting there is still a considerable growth opportunity for the business. “Marketing is key to both Burberry and Watches of Switzerland as it’s all about portraying the right image to potential buyers. Judging by recent results, both are doing this with great success. “A year ago, there was talk we could see a new era of spending under the banner of the ‘roaring Twenties’. Wealthier individuals stuck indoors during the pandemics would be itching to return to their former lavish lifestyle of yachts, weekends away and flash parties. “There is every reason to believe this will still happen, even against a backdrop of high inflation. Therefore, it is easy to see why luxury goods companies remain relatively upbeat when so many other businesses are way more cautious about consumer spending.”

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