Luxury retailer Watches of Switzerland has revealed plans to launch across Europe as it posted soaring annual profits thanks to customers’ booming “disposable wealth” in the pandemic.

Under a new five-year plan, the group aims to enter the European luxury watch market through acquisitions and new boutiques in a shift away from its previous focus on the UK and US.

Luxury retailer Watches of Switzerland has revealed plans to launch across Europe as it posted soaring annual profits (PA)

Britain’s biggest retailer of Rolex, Cartier, Omega, Tag Heuer and Breitling watches said it believes the EU could account for between 5% and 8% of group revenues by 2026.

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It expects the UK’s contribution to group revenues to shrink from 67% to between 44% and 48% as a result of the EU move and further expansion across the US.

America – where the group launched in late 2017 – is set to account for up to 48% of revenues, up from a third currently.

Details of the expansion plans came as the firm reported annual profits soaring to £63.7 million for the year to May 2, up from £1.5 million the previous year.

Constant currency sales rose 13.3% to £905.1 million.

UK sales lifted 3.6% to £606.5 million as strong domestic demand offset the hit from lower tourist and airport trade amid coronavirus travel restrictions.

Soaring online sales helped the group through lockdowns, with internet trade rocketing 125% higher over the year.

Chief executive Brian Duffy said: “Our customer has accumulated disposable wealth and our category is an attractive option.”

He added that trading has remained “strong in both the UK and the US since the year-end” and that the group plans to “capitalise on the significant opportunity to accelerate our strategy”.

“We plan to achieve growth through further geographical diversification, becoming the clear leader in the US market, and establishing a presence in the EU with the targeted roll-out of our proven model,” he said.

Mr Duffy said customer numbers are still down heavily in its 148 stores across the UK and US – down 65% in London on Wednesday against 2019 levels.

But he said trading remains strong thanks to online sales and will be boosted further by “freedom day” on July 19 when the remaining Covid restrictions are lifted in the UK and as customers look to spend savings accumulated in lockdowns.

Speaking to the PA news agency, he said: “We’re predicting a bumper Christmas – we think it’s going to be huge.

“We haven’t had a proper Christmas for a couple of years. The money is there and people will enjoy themselves and indulge.”

On the group’s mask policy once restrictions lift, he said the group will not insist that customers or staff wear them.

“We’ll respect the individual’s right to choose whether to wear masks,” he said.