Richemont's Watchfinder grows 18% yet burns cash: strategic CPO test
Bottom Line Impact
Watchfinder's growth-with-losses profile underscores that certified pre-owned will likely depress reported margins in the near term but, if strategically integrated, can enhance long-term revenue quality, strengthen market control over residual values, and reinforce brand equity through lifecycle stewardship.
Key Facts
5- Watchfinder's FY 2024-25 revenue rose 17.8% to £110m, reversing sales declines seen since 2021 and signaling renewed demand for certified pre-owned luxury watches.
- The UK accounts for approximately 85% of Watchfinder's turnover at £93m, with the rest of Europe at £5.1m (~5%) and rest of world at £11.7m (~11%), revealing a highly concentrated geographic risk profile.
- Despite revenue growth, Watchfinder posted an operating loss of £12.6m in FY 2024-25, taking cumulative operating losses over the past three years to £37m, implying an average annual operating loss run-rate of ~£12m.
- The period to March 31, 2025 saw no material post-balance sheet events, suggesting that the reported loss profile is a good proxy for the current underlying economics absent major restructuring.
- Watchfinder confirms it remains the UK market leader in luxury pre-owned watches and plans to further elevate brand positioning and expand its presence in key international locations.
Time Horizons
Key Roles Affected
Executive Summary
Watchfinder has returned to top-line growth with FY 2024-25 sales up 17.8% to £110m, but remains structurally loss-making with a £12.6m operating loss and £37m cumulative losses over three years. For Richemont and peers, the business is evolving into a strategic lab for certified pre-owned (CPO) capabilities and pricing intelligence, while highlighting the risks of inventory-heavy models in a volatile secondary watch market.
Actionable Insights
Immediate Actions (Next 30-90 days)
Reposition CPO operations from standalone P&L centers to strategic infrastructure for lifecycle management, pricing control, and customer acquisition, with explicit non-financial KPIs alongside profitability targets.
Rationale: Watchfinder's £37m cumulative losses show that insisting on short-term profitability can undermine the strategic benefits of CPO; reframing the mandate clarifies why the group should tolerate measured losses in exchange for higher primary-market pricing power and CLV.
Role affected:CEO
Urgency level:immediate
Short-term Actions (6-12 months)
Implement a tighter capital-at-risk framework for CPO: cap inventory exposure by brand/price segment, increase consignment and buy-back-to-order models, and link purchasing limits to real-time price index movements.
Rationale: An annualized operating loss of ~£12m on £110m revenue implies margin drag likely driven by mispriced and slow-moving stock; a dynamic risk framework can reduce volatility in gross margin and free up 10-20% of working capital tied in inventory.
Role affected:CFO
Urgency level:short-term
Integrate CPO more visibly into brand storytelling and clienteling (trade-in programs, loyalty benefits for repeat CPO buyers, certified refurbishment narratives) while reinforcing the premium of new launches.
Rationale: Watchfinder's UK market leadership provides a captive audience and data set; using CPO as an on-ramp for younger and value-conscious clients can deepen brand penetration without heavy above-the-line spend, particularly in a softer UK macro.
Role affected:CMO
Urgency level:short-term
Strategic Actions
Build a unified primary-secondary pricing and inventory analytics layer using Watchfinder-style data to inform production planning, allocation, and controlled scarcity strategies across maisons.
Rationale: CPO platforms generate granular transaction data across models, ages, and geographies; using this as an integrated signal can improve primary-market assortment and volume decisions, potentially adding 100-200 bps to group operating margin over 3-5 years.
Role affected:Chief Digital/Chief Strategy Officer
Urgency level:strategic
Risks & Opportunities
Primary Risks
- Continued price declines and volatility in key CPO segments (e.g., high-volume sports steel models) could deepen operating losses and force inventory write-downs, further diluting group margins.
- Over-reliance on the UK market, currently ~85% of Watchfinder's revenue, exposes the business to local macro weakness, regulatory shifts, and consumer confidence shocks.
- Reputational risk if consumers perceive brand-controlled CPO as inconsistent in quality, pricing fairness, or trade-in values compared with independent platforms and peer-to-peer channels.
Primary Opportunities
- Using Watchfinder's data and market leadership to actively manage residual values of Richemont maisons, reinforcing price integrity and desirability in the primary market.
- Scaling CPO-integrated trade-in programs at boutique and e-commerce levels to drive incremental new watch sales, particularly among younger and upgrade-seeking clients.
- Leveraging CPO as a sustainability and circularity proof point, enhancing ESG narratives and meeting regulators' and investors' expectations on product lifecycle responsibility.