Watches of Switzerland Group PLC (WOSG) Earnings Call Transcript & Summary

So good afternoon, everybody. I hope you enjoyed our opening video. Thought you'd like to see how we spend your money wisely. I'm Brian Duffy, the CEO of the group, and you'll be hearing from me, then Eric Macaire, Executive Director of Buying & Merchandising; then David Hurley, President of North America and Deputy Group CEO; and Craig Bolton, President of U.K. and Europe, [indiscernible] on new projects and acquisitions and then Anders Romberg, our CFO, will present the financials. I have some closing remarks to make, and then the presentation team will join me on stage to take your questions. So joining us today, we have here in the front, some other members of our wider executive team, they will be available after the presentation, and please take the opportunity to meet them. So our business is doing very well. We are way ahead of the LRP that we presented to you all back in July '21. Our unique model is proven and working in all of our markets. Our U.S. business is particularly strong with great growth momentum. The luxury watch and the luxury branded jewelry markets are both dynamic offering exciting growth prospects. The luxury watch Pre-Owned market is already large and will go through significant positive change with the launch of Rolex Certified Pre-Owned. The plan that we are presenting to you today has really been built in granular painstaking detail. Has growth from our existing businesses through further investment and proven successful formats, both showrooms and online and has exciting new sources of growth in the luxury watch Pre-Owned sector and branded jewelry sector. We're in the process of closing on the acquisition of 19 Ernest Jones luxury showrooms in the U.K., and we have a program of planned investment and M&A and new market opportunities. This plan results in more than doubling of our sales by fiscal '28 and increasing group profitability through fiscal year '28, a strong cash flow and a strong return on capital employed. It's a great plan. We're very proud of it. And as you will hear from the team, we all feel very good and confident that we can deliver on this plan and hopefully go one step further. So let's start by looking at the market context. This chart shows the estimated retail value of Swiss luxury watch exports calendar '19 through calendar '22. We see that the market recovered quickly from the impact of COVID lockdown with U.K. and U.S. markets ahead of 2019 by 2021. The U.S. market has been very strong, showing a '22 or '19 CAGR of plus 20%, U.K. for the same period, plus 8%, EU plus 6%. Year-to-date September 2023, exports to the U.S. are running at plus 11, U.K. plus 8 and EU plus 9. Export data is, of course, [sell-in] and our market information from brands in the U.S. and U.K., also GFK data in the U.K. indicates that it has been less than [sell-in]. We are confident that we're gaining market share in both major markets. The 2023 trends reflect market normalization following exceptional growth in '21 and '22. We project this normalization to continue into calendar '24 and the markets returning to good levels of growth from later in '24. This slide shows the corporate status of the brands in our portfolio with major independents of Rolex, Patek and Audemars and the 3 major groups of Swatch, Richemont and LVMH. I would draw your attention to the group on the right side, smaller independents, although individually small brands, collectively, this group has been the fastest-growing group for us and in total has become quite meaningful. This chart, which I'm sure you've all seen, compiled by Morgan Stanley shows a relative size of watch brands globally with Rolex as a clear market leader and OMEGA and Cartier, the #2 and #3, respectively. Our group continues to work more and more closely with our key partner, Rolex, on developing our mutual business. We are the oldest and the largest retailer of Rolex. We have strong market positions, clearly here in the U.K. and in the U.S. We have full visibility of projects out several years and actually, it's the first time we've had visibility that far forward. We will open the largest European flagship for Rolex in Bond Street next year. We have expanded our service capacity for Rolex to both improve client experience and support Certified Pre-Owned, and we've worked very closely with Rolex in the U.S. and U.K. for the successful launch of CPO. We work closely with Rolex in all commercial plans, client events, co-op advertising, et cetera. We sell Rolex to ROI, Registration of Interest list clients and continue to have a good conversion of these lists and to grow the lists. I presented our LRP to Rolex management, who are supportive of our direction and strategies for growth. This chart shows the relative size of the luxury watch category in key markets per capita. Again, using estimated retail value of exports and simply dividing by the market size -- dividing the market size by the total population, the U.K. market on this basis is the #1 globally and is approximately 2.5x the U.S. The Nordics is the lowest EU market. We believe that the main reason for these differentials is the level of retail investments. The U.S. is now the #1 market in absolute value. This chart is from the Deloitte Swiss Watch Market study 2022. The gray bar for all of these age groups is the net value of responses to the statement, owning a watch being more or less important to me, it becomes less important as you get older. But you can see the positive response from millennial and Gen Z. There's no question that a younger cohort today are positively buying into luxury watches. This chart is from the more recently published 2023 Deloitte study and shows that for those buying watches with an investment focus, 28% see luxury watches as a hedge against inflation in 2023 versus 13% in 2022. Value preservation and appreciation has always been a key motivator for luxury watches. New products are increasingly important to luxury watches, including updates of icons, never change in the aesthetic, obviously, but often upgrading of movements, different straps, dial colors, case sizes, et cetera. Color is an important trend with more and more bright color dials and the matching straps. Innovation is ongoing with movements, but even more so with case [indiscernible] materials, ceramics, fused alloys, carbon, sapphire crystal cases, et cetera. Interestingly, it's with the smaller independent brands that these innovations are even more prevalent. And sustainability is increasingly an important topic with consumers of watches and the industry are now really focusing on recyclable materials and reduced packaging, et cetera. The first watch shown in this line is the ID Genève, which is made from completely recyclable materials. We are the exclusive retailer of this brand, U.K. and U.S. and interestingly, Leonardo DiCaprio just invested in this business. The jewelry market is huge and resilient. On a per capita basis, the U.S. is by far globally the #1 and the U.K., the clear leader in Europe. A lower CAGR growth is positive for the year shown, year-to-date year-on-year trends are minus 3 U.S. and U.K. And again, this is a [ sell-in ] data. The dynamic trend in the jewelry market is the growth of luxury jewelry brands, and this category shows a CAGR of plus 13% from 2019 through the projected 2027. Our plans that you'll hear from Eric shortly focus on this branded market. And now looking at the track record of our group's performance. Our previous long-range plan had ambitious goals of sales plus 18% CAGR and profits of plus 25%, including the midpoint of our guidance for fiscal year '24. We outperformed these goals through fiscal year '24, with a sales CAGR of plus 23%, 24% and 21% and EBIT of plus 32%. Our business continues to perform very well, showing an impressive and consistent growth, again, using the midpoint of the guidance for fiscal year '24, which we confirmed this morning. Our CAGR on sales '24 and '14, 10-year period is plus 19% annually over a decade. And on profit, '24 on '14 -- '24 on '15, excuse me, is a CAGR of plus 43.6%. Our balance sheet has been consistently well managed to with net cash at fiscal '23 year-end of GBP 60 million and a ROCE for the year of 27.9%. Our sales performance is even more impressive when looked at on a domestic market basis. VAT-free tourist shopping was removed following Brexit and the tourist business has been hugely impacted and airport business significantly reduced. Whereas the group sales CAGR of '23 on '19 is plus 19%, which when looked at on a domestic market basis has increased to plus 30%. The U.K. CAGR of '23 on '19 of plus 11 increases to plus 21% when looked at on a domestic basis. The U.S. business has been fantastic for our group, driving group sales and profit growth. We've only been in the U.S. for just over 5 years. And as shown here, the U.S. accounted for just 24% of our fiscal year '19 sales of 774 million and had increased to 42% of the fiscal year '23 sales of 1.543 billion. Based on the plan that we present today, the U.S. will be our #1 market by calendar '26. Our online business benefited as many did, during lockdown, effectively doubling in fiscal year '21. Our e-com teams have done an amazing job by holding this gain and continuing to grow. I remind everyone that Rolex, Patek and Audemars are not transactable online. All of our capital investments worked, delivering strong ROIs and paybacks, looking firstly at showroom investment. This is not just refurbishment. These projects, in most cases, involve showroom expansion, will always include additional brand distribution and can often be a showroom relocation. Our cash payback, which we review ongoing is between 2 and 3 years on these projects. So investing in our showrooms is a key driver of profitable growth, and you will hear and see some great investment programs later today. Our New York flagship show a combined cash payback -- or show a cash payback of between 3 and 4 years. Combined sales for these 2 Manhattan stores are exceeding $120 million. The stores are only open for around 5 years, and we started from scratch, as I often say, with a PowerPoint and a dream, no awareness, no team, no database and the performance of these stores is really outstanding. Like many people, we love New York. And acquisitions, mainly in the U.S. show a cash payback of 4 to 4.5 years. All of our investment formats have worked honestly beyond our expectations and further investment for growth is the basis of the plan that we're presenting to you today. So our results have been strong, and this is because we have a unique business model. We design beautiful, large contemporary stores, are inviting, intriguing and browsable. Landlords value what we do and come firstly to the watches of Switzerland Group as happened in the U.S. with Hudson Yards, the Wynn Resort in Vegas, American Dream in New Jersey and recently Broadgate and Battersea here in London. Our brand partners want to be in our stores. And consequently, we provide the best choice of brands for our clients. And almost 3,000 colleagues do an amazing job of delivering [ Xenia ] elevated client experience and fully utilizing our CRM tools. We invest heavily in team training, both with our brand partners and through in-house L&D. We are truly multichannel through flagships, multibrands, monobrands, airports, online. Our virtual boutique of fully trained sales colleagues assisting clients for shopping online, driving great conversion and making store appointments, et cetera. We will grow this resource in the U.S. and the U.K. and the virtual boutique will play a really important role in Rolex CPO. Our SAP systems support all operations in stores and provide trends and analytics to support our buying team and merchandising teams. Our marketing programs vary from mass market digital campaigns, achieving billions of online impressions to hugely impactful PR campaigns in the U.S. reaching huge audiences to the ultimate and VIP events, both here in the U.K. and in the U.S. After sales is very important for client loyalty and is a valuable source of profitable growth. We have expanded significantly in this area, and we will again double our facilities by fiscal '28. We have diversified internationally. We have learned so much from our U.S. experience, which has benefited our U.K. business. And equally, we've taken best practices from the U.K. and apply these practices in the U.S. We take nothing for granted, of course, and we're constantly looking to learn and to adapt and to improve. So this is how we've organized the presentation of growth projects, Certified Pre-Owned and luxury jewelry will present firstly, as these projects apply to both U.K. and U.S. We will then have the growth plans by region, U.S., U.K., EU, including our Rolex store plans, showroom investments, e-com, mono brands and so on. Craig will present the Ernest Jones luxury showroom acquisition, and I will present M&A and new store projects. So just looking at our first growth opportunity in Pre-Owned, the Pre-Owned market is large and growing. We have based this chart here on information from sources through 2021 and then made our estimate of 2022 and projected 2028. The secondary market declined in the second half of 2022 and '23 due to price reductions, as I'm sure you all know. We understand that the volume has remained strong, but value is clearly down. I do point out, however, the Pre-Owned business in our group continue to enjoy -- continue to grow through '22 and '23, maintaining good margins. The launch of Rolex CPO has, we believe, added to the total market and stimulated interest in the category. Clearly, the Pre-Owned market is significant and is particularly strong in Western markets, especially in the U.S. and also skewed historical towards online sales. This chart from the Deloitte 2023 study shows the motivation of Pre-Owned purchases, which is, value is number one and then availability is number two, while our hard-to-find product limited exclusive, et cetera. The likelihood of watch consumers surveyed of buying a Pre-Owned watch increased markedly in 2023 to 39% from 32%, which we believe has been influenced by the introduction of Rolex CPO. The Pre-Owned market represents a major opportunity for the Watches of Switzerland Group. We have now launched Rolex CPO in the U.K. and the U.S. to add to our already successful analog shift in U.K. Pre-Owned businesses. We launched Rolex CPO in 7 showrooms in the U.S. in July and 5 showrooms in the U.K. in September. To date, marketing has been very limited and in-store presentation is merely the product in cabinets. We've made a great acquisition of analog shift in the U.S. in 2020, and we've successfully developed this brand, both in-store and online. Here, you see the SoHo store on the left where our partnership began and the American Dream, most recent installation on the right. Looking at the status and performance of the combined Rolex CPO and non-Rolex CPO, [indiscernible] last week, we have our CPO and 15 showrooms now in the U.S., still 5 in the U.K. Both markets are online. And we have analog shift in 20 showrooms in the U.S. and CPO and 11 showrooms in the U.K., again, both online. Combined sales since our CPO launched have been very strong at plus 102% in the U.S., and that's over 13 weeks, plus 75% in the U.K. over a 5-week period. Our expansion plans through the early part of the LRP is to expand our CPO to all Rolex agencies, to install our CPO furniture and window displays in spring/summer of 2024, to really push on digital online advertising, a major push of the business online and a step-up of procurement to support demand. For analog shift non-Rolex CPO, we will rebrand U.K. CPO to analog shift. We will increase distribution to all of our watch agencies, and we will equally push this business online. We plan to introduce Pre-Owned to the EU market. And once again, we'll step up procurement to support demand. Our goals for the LRP are that our CPO to become 20% of our Rolex new product sales in the U.S. and 10% in the U.K. by fiscal '28. Non-Rolex CPO to grow at a minimum of 35% annually in the U.S. and a minimum of 25% annually in the U.K. So just moving briefly on to another growth opportunity in the U.K. Craig will present the detail of the recent acquisition of Ernest Jones showrooms that is now into the market and was included in the Q2 RNS this morning. Eric will refer to it just to make sure that everybody knows of the deal and knows what's going on. We are acquiring 19 luxury showrooms from Ernest Jones. The showrooms all carry luxury watches. The deal will formally close in late November, but the transition is underway. The showrooms are closed as of last Saturday and TP, transfer processes are ongoing. The target is for us to have all showrooms rebranded, fully integrated systems, training, re-merchandising, et cetera, all fully done by Q4 of fiscal '24, and we expect to have a really good impact in fiscal '25. So I'll now hand over to Eric. He'll take you through our luxury branded jewelery opportunity. Eric?

Thank you, Brian. Good evening, everyone. My name is Eric Macaire. I'm the Group Executive Director in-charge of Global Buying & Merchandising across watches and jewelry. I joined the group last January '23, and I'm based in the U.K. I relocated from Hong Kong, where I lived 15 years. Prior to Watches of Switzerland Group, I worked in luxury jewelry at Van Cleef & Arpels, part of Richemont Group and more recently, at DFS, Duty Free Shoppers part of LVMH Group. I oversaw at DFS, the global watch buying and fashion jewelry department with operations across the U.S., Oceania, Europe, Middle East and Asia. Today, I would like to share with you our acceleration plan on luxury branded jewelry. This segment within our group is clearly underdeveloped and offer significant growth opportunities. We have build solid foundations on luxury brand management in general and watches in particular. We have also learned more on luxury branded jewelry from our recent Betteridge and Mayors acquisitions in the U.S. and are now ready to action. Our recent growth has come mainly from watches. As a result, our group has been underweighted on jewelry. Our product mix between watches and jewelry in the U.K. and the U.S. is the opposite to the market. Last fiscal year '23, jewelry business contributed to 7% of our sales. Our group operates across 2 significant markets for jewelry, giving us a strong position to leverage and accelerate. The U.S. is the #1 domestic jewelry market in the world per capita while the U.K. is the #1 in Europe. The projected growth will come predominantly from the luxury branded jewelry, as Brian described. By 2027, we estimate luxury branded jewelry to account for 34% of the market compared to approximately 25% today. The luxury branded jewelry industry is organized around a few large luxury groups, such as LVMH, Kering, Richemont, Swatch or WS Group, but also around several independent jewelry brands such as Roberto Coin, Chopard, David Yurman or [indiscernible]. WS Group based in the U.K. achieved over USD 6.6 billion of sales in 2022 across its brands and mining activities alone. A quick look at the industry players shows 4 mega brands: Cartier, Tiffany & Co, Bvlgari and Van Cleef & Arpels. These mega brands are today under LVMH and Richemont, heavily focused on retail and direct to clients. We do have a very successful mono-brand boutique with Bvlgari in Aventura Mall Miami, Florida. Many of the brands listed here are European or American and have grown significantly in the past decade. However, they often have focused on large cities and not invested in many U.S. states or the regions in the U.K. They are in quest to recruit new clients and therefore, interested in our distribution strength and watch client database to cross over and address their white spots. We can create a point of difference versus our competitors by offering a portfolio of brands to the clients that they wouldn't be able to have. These brands are selective in their distribution and choice of partners. Our elevation in retail and luxury watch selection offers the perfect environment for them to agree to join us. Taking a quick look at the U.K. It's interesting to notice the strength of the business outside of London with similar spending on watches. When it comes to jewelry, the distribution is concentrated in London and around Bond Street Flagship boutiques, Harrods and Selfridges. Looking at the jewelry demographics, we observed that 56% of the buyers are women and are the main influencers in the purchase decisions and more and more are also holding the buying power. 35% consider themselves self-purchasers. Engaging them is critical for our future success in jewelry, but also in driving further our watches business. Focusing on millennials is essential too, as the whole majority of the jewelry spending and spend more than an average clients. Luxury branded jewelry is aspirational, hard luxury. It triggers customers who are shopping by brand, status seeker or luxury fashion advocates. It's more of a lifestyle wear, an impulse purchase, coming with the intent to own an iconic and timeless design. It's about creating a collection to mix and match and stack up jewelry. It can be dressed or casual and the multiple ways to wear offer opportunity to engage more regularly clients into purchasing versus a classic jewelry or bridal engagement purchase by nature, less frequent and more planned. We noticed also a growing appeal for men jewelry, and we will address this segment as well. So why do we believe we can make a difference in jewelry? We have the winning model to execute our strategy and achieve with luxury brand jewelry what we did with luxury watches. Our skills in brand management have allowed us to grow significantly our sales and market shares with strong leaders in their markets, but also to incubate and grow new brands to very sizable levels. In a nutshell, we are in key markets for jewelry with strong nationwide distribution coverage, particularly in the U.K. We are a solid group with infrastructure and resources able to scale. We are credible in the watch and jewelry industry, allowing us to get brand support and to build global strategic partnerships. We have an expert buying team able to detect new trends rapidly, thanks to robust market insights. We are jewelers ourselves, running luxury owned jewelry brands such as Mappin & Webb, Betteridge, Goldsmiths or Mayors jewelry, all going through elevation. We have first-in-class marketing capabilities and the [indiscernible] service experience. We run a multichannel operation offline and online across various retail officials. And lastly, we have an impressive loyal domestic client database that we can cross over between watches and jewelry. What we are about to present is a significant development for the jewelry industry in the U.K., a new concept never seen before, especially outside of London. We will create a unique flagship for luxury jewelry in the Mappin & Webb in Manchester City Center. On this slide, you can see the beautiful historical facet of the Mansfield Chambers, a grade II listed building, essential and visible location on St Ann's Square with Mappin & Webb recognizable identity, but also the first WS boutique outside of London operated by us. So why Manchester? Manchester after London is the next major city for luxury retail with a large catchment area in the Northwest. The city is well connected with an affluent audience liking art, fashion, lifestyle and social activities, not forgetting football, of course. The group has a strong presence in Manchester already, and this will strengthen in 2024. In the City Center on St Ann's Square, we operate already a Mappin & Webb with Rolex and Watches of Switzerland showroom as well as TAG Heuer mono brand. We will have a new Goldsmiths showroom from the acquisition of Ernest Jones and will also open the first [indiscernible] house outside of London next year. We are also in Manchester, key shopping mall at Trafford Center with 2 renovated Goldsmiths showrooms and more mono-brand operations. The brands joining this flagship will all be exclusive with us in Manchester. We will have a selection of international luxury jewelry brands, but also designer brands and Mappin & Webb jewelry. We will also represent the growing men jewelry segment. The objective is to create a destination of style, curation and trends for our clients, empowered to make their own decisions. We want them to feel comfortable in a luxury set up, yet intimist and contemporary, allowing them to browse and discover new products, brands and trends but also to receive advice in the [ baseband, ] a large space will be dedicated to hospitality, where our Xenia experience can fully live and where our clients can feel at ease and mingle. It will be a fantastic event venue and launch pad for brands in the north as well. The space will host a bar, private lounges and sales rooms. The showroom will be treated as a flagship opening, an activity with a dedicated localized plan. The plan will consist of events, media, local partnerships, press, social media and branded animations. To note also that 2025 marks the 250-year anniversary of Mappin & Webb. This flagship will be the epicenter of our marketing campaign. We target to open by full 2024. Talking about new brands, we are proud to announce our partnership with [De Beers'] will join our flagship project in Manchester, as mentioned, and open its first boutique outside of London, operated by us by full 2024. Another example of our partnership acceleration, this time with an existing brand partner will be with Roberto Coin. Roberto Coin has been a strong partner for the group in the U.K. and the U.S. and one of our fastest-growing brands with a well-established name in the U.S. nationwide. In the life of the plan, we will improve the brand visibility in our network and offer personalized environments to elevate the experience, sales and average price points. We will accelerate also with the brand across marketing, product assortment and e-commerce, both in the U.S. and in the U.K. We are ramping up our partnership with current and new brands, making more space in our showrooms for jewelry. Another example is Pomellato, part of Kering Group. The brand has been an existing partner of Betteridge in the U.S. and will be rolled out next year in Mayor's network. In the U.K., we have confirmed the road map to introduce the brand into the regions with Mappin & Webb and Goldsmiths. Pomellato was recently introduced in Liverpool Goldsmiths. Same goes with Fred, part of LVMH, entering our Liverpool Goldsmiths showroom this year for the first time outside of London. We have a plan to roll out the brand in more locations in the coming 12 months. The rest of our network of showrooms has also new formats being rolled out that will be more fit for purpose to sell and present luxury jewelry and branded jewelry. Craig and David will touch on this point. Worth noting that we will create in the U.S., a contemporary version of Betteridge with a new jewelry flagship in Greenwich, Connecticut by calendar 2025. We target to bring the number of luxury branded jewelry agencies from 115 to 260 by FY '28. You can expect more brands partnership announcement to come, as we shape the plan and update the distribution. As a summary, we have a number of initiatives already in progress from our flagship projects, new showroom design concept, elevated hospitality approach and expanding distribution. I can say the plan is very much alive and in motion. The specific attention to improve our jewelry visibility on our e-commerce sites across the U.K. and the U.S. is also considered. We have not assumed the rollout of the luxury jewelry multi-brand concept in this plan, but we are excited about the concept and the opportunity it could represent in the major cities in the U.K., U.S. as well as in the airports. Last but not least, I will end this presentation by saying that this plan could not be already happening without the impressive support and enthusiasm of the luxury jewelry brand community, but also our colleagues who have responded very positively to this strategy. Thank you for your attention. And now moving on to our next section with David to go over the U.S. strategy and plan.

Good afternoon, everyone. Well, we've had a great first 5 years of retailing in the U.S. market. And we've got a great team and they produced really great results. But this is still only the beginning, and we're confident in our ability to continue to grow significantly in the world's #1 watch and jewelry market. So I'm going to quickly bring you to the past 5 years in 5 minutes, and then we'll go through the building blocks for the next 5. We started working on the U.S. market in 2015, but our first entry into retailing was with the acquisition of Mayors in October of 2017. We acquired a great team with the ability to scale and post IT integration began the first investments into the store portfolio. The first store we worked on was American Coral Gables. The store was the first full new Mayors store design and the sales are now well over 3x pre-investment. The store hasn't been touched in years. And this is what it looks like now. Our boutique in Lennox Atlanta was one of the flagship stores in the Mayors portfolio. We moved from a B- to an A+ location. This is what the showroom looks like today and the sales today are over 4x pre-investment and we're out of space. I'll come back to that later. In November '17, we took over the retailing of luxury time pieces in the Wynn resort in Las Vegas. This is where we started, and this is what it looks like today. Over the last 5 years, we've also added Breitling and OMEGA mono-brand boutiques and lastly, renovated the Rolex boutique from this to what it looks like today. The sales in the Wynn are now over 3.5x the business we acquired and continue to get stronger. We're in the best resort in the city that constantly reinvents itself. There's now an NFL stadium and franchise with the Super Bowl being held there next year, which now also allows major stadium Act concerts. You can see the sphere, which opened earlier this year with my fellow country menu to and the Las Vegas F1 race. The Wynn Resort is the place to stay, and we tailor our merchandise assortment for these events. We opened up in New York firstly in SoHo in November 2018 and then in Hudson Yards in March of 2019. In one of the most competitive retailing cities in the world for luxury type pieces, we do comfortably over 120 million between these 2 stores. They continue to grow year after year. And we've added to that with the opening of American Dream, and there's more to be done in New York. Analog shift was a small but very important acquisition for our group in September 2020. We acquired a great brand in Vintage and Pre-Owned, but more importantly, a great team that we've continued to scale up to support our growth in this category and also to support the launch of Rolex-CPO. There's been a lot of noise on prices coming down in the preowned market, but in the last fiscal year, we more than doubled the business with no drop in margins. Since then, we've acquired Betteridge and stores in Texas, Minneapolis, and Martin New Jersey. It is rocket science. We apply the same formula to the stores we've already renovated or relocated. But it does take time, and we're dependent on our key partners in terms of their designs and furniture sourcing. We launched e-commerce officially in 2020. We've continuously invested and improved our marketing and we've had incredible levels of PR. In the last 12 months alone, we've had over 10 billion impressions. And we will open up expanded offices in Fort Lauderdale early next calendar year to support our next phase of growth. This will allow us to expand our service center, virtual boutique and also online support. The business has grown significantly in the last few years with a CAGR of 40%. And we look forward to be able to celebrate over GBP 1 billion in annual sales in the not-too-distant future. So how are we going to do it? Firstly, I'm going to quickly bring you through what I can share on our store development pipeline. Online is a major growth opportunity, and our size and scale is going to help us to grow ahead of the market. And we're going to continue to invest in strategic partnerships and innovative marketing to establish ourselves as the key destination for luxury time pieces in jewelry. We've had great early success with our mono brand rollout. And just like our multi-brands, we can continue to mature and grow the sales for the stores already opened. Pre-owned and vintage has been the fastest-growing category in our U.S. business for the last 2 years, and we're confident we can continue to grow the market share in this area. Eric has already spoken to our jewelry strategy, and this will see us expand jewelry in our current showrooms and make a major statement with our Betteridge, Greenwich refurb and invest heavily into the digital space. And look, we've a track record of acquisitions in the U.S., and we're confident we can continue to execute more deals. We have new showrooms planned, including a new Rolex and Cartier Watches of Switzerland showroom opening in Minneapolis in early 2025. So you're the first to get a sneak peek of our new Rolex boutique in Millenia Mall in Orlando, which opens in just a few days. And stores almost trebled in size to 3,000 square feet. We've had a Rolex boutique in Orlando since 2011 but we needed this additional space to give the full Rolex experience to our valued clients. The mall is one of the strongest in the U.S. and this boutique will be a fantastic addition to our Tudor boutique and our Mayors multi-brand showroom. In Plano, Texas, we're moving to a great corner location and are adding Rolex, Cartier and Tudor to the brand portfolio in a mall that recently welcomed Louis Vuitton, Gucci and Tiffany. Jacksonville is also a great market and we have a fantastic location adjacent to Tiffany and Louis Vuitton. Rolex will be the anchor brand for the store. And we're also going to be adding shop-in-shops for our key jewelry partners. So there are further expansions in FY '25, genuinely huge projects. International Plaza in Tampa, is going from the B location to A+ in between Louis Vuitton and Tiffany. In Atlanta, we'll be converting our Rolex shop-in-shop to a full boutique, as well as an expanded Mayors boutique. We know we can do significantly more sales in this powerhouse mall. Honestly, we've just been out of the space. But we have a great relationship with Simon, who are the largest mall operator in the U.S. and we've worked together to significantly expand our footprint. So plenty of expansions and renovations in the next few years and more to come. Again, we have great paybacks. We don't sign up to these spaces without the support of our brand partners and we go for the best possible locations. Okay. We're really delighted with the success of the SoHo and Hudson Yards, New York flagships. These stores continue to mature and grow in sales. And we still, we believe we can continue to grow in Manhattan and in the Tristate area. One Vanderbilt will be our next Manhattan flagship. Located next to the Grand Central terminal at the base of arguably the premium office tower in New York City, the building is host to the first Amex Centurion lounge which spans a full floor of the building. The SUMMIT is a viewing gallery that needs to be seen to be believed and then there's the 750,000 visitors using Grand Central daily. The boutique is anchored by Cartier and OMEGA and will open up in Q4 of this year. We're also delighted with our acquisition of Betteridge, which gave us 3 incredible locations in Greenwich, in Vail and Aspen. We've taken our time to understand these markets and have now detailed renovation plans for all. Greenwich is being expanded by 2,500 square feet, both on the ground and the lower ground. This will allow us to create large showrooms for Rolex and for Patek Philippe. And then the Betteridge showroom itself will be anchored by our key jewelry partners, Betteridge jewelry, estate jewelry, as well as Cartier and OMEGA. And we're going to have great hospitality throughout the showroom. The showroom design is by the same architects who did the Mayors concept, as well as the Bergdorf's jewelry department. And this is coupled with new creative to promote all 3 of our Betteridge showrooms. By the end of FY '26, we plan to have all of our Betteridge, Watches of Switzerland and Mayors showrooms transformed. We believe online is a significant opportunity for growth and our scale, coupled with our in-house marketing and creative team gives us great opportunity to gain market share. Over the last few years, we've built up significant credibility with our brand partners who are supporting us with their co-op advertising to drive unique content for jewelry. And then you can see an example here with Grand Seiko on timepieces. And again, here with OMEGA and we've done this with many of our major brand partners to help drive sales. Each of these campaigns will have individual ambassadors and allow us to tap into music, culture, food, architecture, sports and many other areas. Digital marketing is by far the largest percentage of our marketing spend and we will continue to push our unique content in partnership with our key brands to differentiate our group as the destination for luxury timepieces and jewelry. We've just hosted the Nominated Timepieces for GPHG or watch Oscars in New York at our SoHo showroom for the second year running. The announcement of the exhibition alone generated over 322 million impressions. We're delighted with the partnership and we'll be announcing another great strategic partnership in the U.S. early in the calendar year. Let's take a quick look at a video of the event. [Presentation]

See there, SoHo store is a great place to have a party. Okay. Moving onto mono-brand boutiques. Our focus remains on growing market share and enhancing our partnerships overall with the brands. The key to this is our expertise in developing the productivity of these businesses, particularly in CRM, product profiling and exclusives in order to drive both the volume of sales and ASP, supported by frequent events and one-to-one clienteling. All of this is underpinned by great teams, expertly trained with the brands and focused on the client experience. Lastly, I'm happy to announce we'll be opening a Rolex anchor showroom in a newly renovated mall in Minneapolis, in Southdale. Our store will be one of the key anchors along with Louis Vuitton. So in closing, we know we're growing ahead of the market. We've got a great pipeline of projects. We've got a track record of acquisitions in the U.S. Preowned luxury jewelry brands and e-commerce will continue to grow and we know we can continue to grow monobrands. And we got a great team who are really excited by what we've achieved to date and highly motivated to continue to grow. So lots done and lots more to do. And with that, I'll pass it over to Craig.

Thanks, Dave. Afternoon, everyone. So my name is Craig Bolton. I'm the President of our business here in the U.K. and Europe. Also in case you hadn't noticed, the fourth accent today, following the Scottish, French, Irish and now you've got a Geordie for a little while. So hopefully, you're going understand it. Firstly, I want to just show you a slide, which gives you the detail of how we performed here in the U.K. The sales over the 9-year period have delivered a very impressive 11% CAGR, which we believe is market leading in the U.K. And this growth has been driven primarily but not exclusively by our focus on luxury watches, delivering a very impressive 15% CAGR, as shown here. We have transformed our business over the past 9 years, delivering an elevated estate, significant gains in productivity and excellent sales growth for the U.K. group. But we're not done yet. We have a lot to do. Our model continues to be focused on investment and we plan to repeat, enhance and accelerate it to leverage the future growth. The strategy is focused on these key areas and I will start with a significant pipeline of Rolex projects we have planned. I'm delighted to confirm that the design work is now complete for the new Rolex boutique on Old Bond Street in London and work on site has commenced with the opening date set for October 2024. This boutique will be the single Rolex agency on Bond Street from what was previously Four Points of sale. The client facing space will be over 8,000 square feet across 4 floors, 2 main floors dedicated to sales and hospitality, providing facilities for day-to-day client experience, as well as Venton space for more intimate occasions. The lower ground floor will be dedicated to the first Rolex-certified preowned shop-in-shop in the U.K. as well as an education on the history of Rolex. The second floor will be dedicated to after sales and servicing, home to 6 watchmakers and technicians and will be a key hub for Rolex aftersales in the heart of London. We have also agreed with Rolex to double the size of our boutique on Buchanan Street, Glasgow. This hugely successful showroom has traded beyond all expectations since opening in 2019 and now requires this expansion to allow us to service increased number of clients as well as retail Rolex-certified preowned in a dedicated space and create a quality after-sales area with in-house watchmakers. Our Glasgow project will complete in October 2024. In the multi-brand Rolex showrooms, we have major projects planned with a number of high profile and high turnover showrooms completing within the next 12 months. In the next 4 weeks, we have these 4 major projects completing where the showrooms have been expanded, significantly allowing for circa 1,200 square feet of Rolex space plus expanded areas for several luxury watch and jewelry brands plus elevated hospitality and aftersales. These expansions and elevations continue in 2024 with plans such as Fenchurch Street in London and Brighton, culminating in one of our most important investments as we embark on the elevation of our Mayors and Northern Goldsmiths showroom in Newcastle. We're known for being the U.K.'s first ever Rolex retailer back in 1919, a real special one for me personally. Moving on to Travel Retail. Passenger numbers continue to improve and in T5, passenger numbers are now exceeding 2019 levels. We remain optimistic that sometime in the future, a form of duty free will return to the U.K., albeit this has not been assumed in our planned sales. In the meantime, the airport remains a strong shopping environment with a good demographic with inclination to shop. In Terminal 5, we are adjoining the Rolex boutique, to the Watches of Switzerland multi brand and a great location near Chanel. This extensive investment will be fully complete by October 2025. We will also refurbish the Rolex boutique in T2 in the life of the plan. As you can see from this chart, we have the best ever pipeline of Rolex projects with visibility and confirmation out to the end of FY '26. Whilst our Watches of Switzerland showrooms largely benefit from all the great work planned with Rolex, we also have other great initiatives. We are focusing increased attention on independent brands. And in Knightsbridge, London, we will reorganize the 7,500 square feet showroom, developing an amazing selection of these brands shown which includes, first for us, with the likes of H. Moser and Arnold & Son. Knightsbridge will be completed by April 2024 and we were reviewing all other showroom opportunities. In our famous 155 showroom on Regent Street, we are on-site expanding and elevating the Patek Philippe area. This new area will be circa 1,300 square feet and benefit from luxurious consultation areas, as well as VIP space and a dine-in room. This project will be complete by the end of January 2024. As previously announced, we have agreed to enter into a joint venture agreement with Odoo Mall [ pk ] to open a townhouse in King Street, Manchester, which will be the single point of sale in the U.K. for Odoo malls outside of London. Across 6,500 square feet, the townhouse has been designed with the highest level of client experience in mind. Offering dine-in facilities, VIP space, music lounge and rooftop Venton space. The planned opening is October 2024. All Watches of Switzerland showrooms will be fully expanded and refitted during the life of the plan. We will also celebrate our 100-year anniversary in 2024 for Watches of Switzerland, an amazing milestone in our history. We have an extensive celebration plan, which includes great support from our brand partners with exclusive product totaling over GBP 7 million, including many iconic products. The anniversary will be wrapped around a U.K.-wide marketing campaign as well as a sequence of private events culminating in a Grand Ball late in 2024, where we will be supporting the Watches Of Switzerland Group Foundation. Next, moving on to our Mappin & Webb brand. We have successfully developed a new design for Mappin & Webb focused on a more modern, contemporary design, whilst respecting the great heritage of the brand. Here, you can see our new Mappin & Webb showroom in York. We have now relocated onto the Davey Gate, in York, significantly increasing our footprint to over 3,000 square feet with this beautiful showroom, accommodating a large Rolex room, a new luxury jewelry gallery and luxury watch branded areas. Feedback has been overwhelmingly positive and trading is well ahead of expectations. Here is a short video to bring the design to life. [Presentation]

It's an amazing space. I'd encourage you to see it if you're on the Northeastern line anytime on the way to Newcastle, you can stop off at York and have a look. Since York opened, we've also developed our showroom in Guernsey, as you can see here on the slide. Pre-Christmas, we will deliver the new design to Glasgow Mappin & Webb and Bluewater, whilst post-Christmas, we will start work on our new Mappin & Webb showroom in Multrees Walk, Edinburgh, in the heart of luxury retail in the city. It's many years since we featured Mappin & Webb in Edinburgh, so we're very pleased to be back in this great city. In the life of the plan, we will complete 100% of our Mappin & Webb with estate with the new design and more immediately, 70% of our estate will be completed by the end of FY '26. 2025 sees Mappin & Webb celebrate its 250-year anniversary. Mappin & Webb has a hugely distinguished history, holding Royal Warrants since 1897, issued then by Queen Victoria. Our anniversary will be supported by beautiful new jewelry collections designed by the Crown Jeweler, Mark Appleby. Looking now at the rollout of our Goldsmiths Luxury design, which has been working very well since its launch. Recently, we completed the most significant and largest transformation for Goldsmiths in Liverpool's city center, 6,500 square feet across 2 floors of luxury watches and jewelry, including a 1,200-square feet Rolex room and a 500-square feet Cartier room. We have also introduced many new luxury jewelry brands into the showroom, including Roberto Coin, Pasquale Bruni, Marco Bicego and Pomellato plus others and will form the basis of brands we will introduce into future Goldsmiths projects. Here is a short video to bring the new design to life. [Presentation]

It's a super impressive store. Following this huge project in Liverpool, pre-Christmas, we will complete 3 of our top 5 turnover showrooms in Goldsmiths, including our highest turnover showroom in The Trafford Centre, Manchester. Whilst the majority of developments mentioned to this point for Goldsmiths have been Rolex, we will continue to elevate our showrooms that lead with great brands such as OMEGA and Breitling. On the slide, you can see here the work we completed in the Westquay mall in Southampton, providing all the elements of the new design and facilities. We have a very busy schedule of investments planned for Goldsmiths Luxury and all of our showrooms will be completed in the life of the plan and 75% of our showrooms will be completed by the end of FY '26. Moving on to our mono-brand store network, which remains a key strategic objective and has grown significantly in recent years. By the end of FY '24, the number of boutiques for these brands will be 52. Our mono-brand boutiques have significant presence across all major cities in the U.K. And while slowing in terms of new openings for FY '25, we will continue to develop this category during the life of the plan. In FY '25, we will focus on the retail integration with our multi-brand fascia to maximize the potential of each location for our group. And as David has already discussed, our priority across both U.K. and U.S. is improving productivity of these boutiques to grow market share. Our online sites are our best marketing asset with over 45 million visitors per year. We've enjoyed significant online success in recent years. And whilst the platform is successful as a singular channel, our focus remains on multichannel productivity. We will continue to add luxury watch brands along with developing online success of Rolex-certified preowned and our own Analog Shift pre-owned, as well as developing a strong luxury branded jewelry proposition. As we integrate the Ernest Jones showrooms, we will benefit from our multichannel capabilities, giving our new colleagues access to a large increase of brands and web-enabled sell-in technology. So as Brian mentioned earlier, I'm very pleased to confirm the planned asset purchase of a group of showrooms from Ernest Jones U.K. Ernest Jones is part of Signet, which is predominantly a U.S.-based group focused on own branded jewelry. Ernest Jones ceased partnering with Rolex in 2012 but continued their relationship with most other luxury brands. The plan is to acquire a selection of Ernest Jones rooms, which carry the brands, particularly OMEGA, Cartier, Breitling, Tudor and TAG Heuer. The deal once finalized will consist of 19 showrooms with a total of 80 luxury brand agencies in the portfolio. These showrooms are very much in our space of luxury watches with great potential for growth in luxury jewelry too. All in good geographical locations, complementary to our current estates with good teams. We will pay less than 10% above asset value for the showrooms and we do believe this is a very good deal for our group. LTM sales and acquisition are circa [ GBP 45 million ] and is our plan to achieve our group profitability by the start of FY '25 and our group productivity by the start of FY '26. The focus immediately is to leverage our group systems, technology and infrastructure to support our new colleagues to improve sales growth. We will rebrand the showrooms prior to Christmas and immediately improve stock holding and open up all relevant stock online and make available for web-enabled sales, including preowned, which has not been available to these showrooms before. We will fully support the showrooms from a performance marketing perspective, whilst also using our virtual boutique team as a conduit between online and offline to support. By the end of FY '24, we will execute the full integration of these showrooms into the main Watches of Switzerland group estate. Further improvements such as introducing our clienteling system, [ Captivate ] will add real value for our new colleagues. A full merchandise and space review will take place focused on improving productivity across all product categories. All new colleagues will receive an extensive L&D program, particularly focused on luxury watches and jewelry, but also introduced to our client experience [indiscernible] Xenia. We will complete a full review of capital investment requirements and timing with all showrooms receiving our new designs due in the life of the plan. So in summary for the U.K., our sales will continue to grow ahead of the market as a result of the elevation and brand enhancements planned, supported by the best ever pipeline of Rolex projects. Market share gains will be achieved by the delivery of the great new designs for Goldsmiths Luxury and Mappin & Webb, including the integration of Ernest Jones showrooms acquired. Alongside this, the significant new projects such as Rolex Old Bond Street and Audemars Piguet Townhouse as well as our new luxury jewelry show room in Manchester. We also have additional leverage areas such as luxury branded jewelry and pre-owned, which we intend to take a market-leading position with. E-commerce has seen amazing growth in recent years and will continue and further development in our multichannel capabilities is a priority. Similarly, productivity growth within our mono-brand boutiques is a real priority focus in order to drive market share gains. Finally, all of our key drivers are underpinned by the investment in our people, including our key strategic client experience initiative, Xenia. Now if I could switch gears for a second to the EU strategy. Our plans for development in the EU are still at an early stage, and we believe the opportunity to be very exciting and one way we can take our proven model and apply it to the markets with success. Northern Europe has been our immediate focus, but all areas of Europe will be considered in the life of the plan. Today, we have opened 9 mono-brand boutiques, and these remain a key focus for further development. Showrooms in Sweden and Denmark are now annualizing with the exception of the new boutique recently opened in Gothenburg. All are building momentum as we grow awareness, and we grow our client database. Germany is a very good market with multiple large cities to focus on similar to the U.K. Our recent opening in Berlin is at a very early stage of trading and is starting to build traction. Entering the market with boutiques has hugely elevated the brand position in the cities and significantly increased sales versus the previous multi-brand only retailers. All our brand partners are very positive about the impact we have made. We have recruited excellent teams in all locations who are very passionate about the brands they represent or heavily invested in learning and very focused on the client experience. We have found interesting dynamics in the market, such as a high level of repeat and purchases and watch collectors as well as a very high ASP. One-to-one clienteling and [indiscernible] is a key feature in all showrooms as our teams focus on driving their own traffic and building registrations for product in the future. I am pleased to announce today our entry into the Netherlands. We have agreed with Westfield to occupy a space of 2,400 square feet in the Mall of the Netherlands near the Hague. The mall benefits from circa 14 million people with strong demographics and good retail. This will be our first multi-brand location in Europe and first entry to the market for the Watches of Switzerland brand. We will continue to explore mall opportunities with our brand partners. We have a great lineup of brands leading with Cartier, OMEGA, Breitling, TUDOR and TAG Heuer and the showroom is due to open by October 2024. We will also take this opportunity to launch e-commerce in Europe using Watches of Switzerland. Initially, we will launch [ dispatching stock ] from our showrooms as we develop in the markets and deliver -- and when we deliver an acquisition, we will move to Phase 2, which will include larger scale e-commerce launch with wider range of both luxury watches and luxury jewelry. So overall, our plans have commenced, and steady progress has been made. We will run 2 parallel streams, one looking at new project opportunities and underserved markets. And the other, reviewing acquisition opportunities, acquisition being a key priority for our team. The Watches of Switzerland brand will be launched in Europe in 2024, along with Phase 1 e-commerce launch. As in the U.K., our business plan is underpinned by excellent teams whose skill level and productivity are improving as their experience grows. With the indicative plan we have laid out, we estimate that the EU revenue will represent 4% to 6% of total group revenue by FY '28. And I very much look forward to updating you further in future presentations. Thank you for now. I'm going to hand back to Brian.

So clearly, we don't have enough going on. We're going to do some acquisitions. We're going to do some of the new projects and keep these guys busy. They have spare time. So as presented earlier, the U.K. is the #1 market on a per capita basis. The U.K. market is strong nationwide, disciplined and well invested. The U.S. and the EU markets are underdeveloped by comparison and more fragmented. Distribution has been rationalized by the brands across these territories and investment in larger urban store formats is clearly the way forward. We are now very well established in the U.S. and developing our presence in the EU, and we have significant opportunity to grow through both new stores and underserved markets, new developments that are happening and also through M&A. So if you look again at our track record in the U.S., new development, Hudson Yards is a phenomenal success for us. American Dream is off to a great start. Completely new developments to landlords came to us. So it was a classic example of an underserved market. In fact, a market not served at all by luxury watch retail and that to a phenomenal success. In Cincinnati, the Kenwood Towne Centre Mall had developed a luxury credibility, creating the opportunity of a luxury watch retail that had not been taken by local retailers, giving us the opportunity to step in. And we are proving very clearly, as you've [ just heard the ] great markets like Stockholm and Copenhagen have clearly been underserved. So acquiring, integrating and investing in businesses in the U.S. has been the backbone of our success in that market. Mayors in Florida and Atlanta has been fantastic for us. This deal also gave us the U.S. business, a [ market HQ in ] Fort Lauderdale. [indiscernible] fantastic. We got expansion plans there. As you've heard, Betteridge showrooms are in great locations and new designs are almost there, all will be upgraded and expanded by fiscal '26. Minneapolis for moving into the [ Southdale ] Luxury Mall, Analog Shift gave us expertise and credibility in the pre-owned and vintage sector and propelled our growth in this category and Marlton, New Jersey is a great addition our tri-state presence. And if we stand back there and look at the sources of our business, our U.S. business in fiscal '23, we can see that 41% was what we acquired in sales directly. 36% is a benefit for investing in acquired showrooms. And we're only just around halfway through that level of investment, 23% is new like New York. And in '24, '28 plan, we will grow our business in each of these segments, and we have potential projects, including M&A at various stages of discussion. So I've discussed and confirmed these basic principles, sounds like [indiscernible] when you hear them, but I agree these basic principles of collaboration with our key partners. So [ 4 ] acquisitions when our business is for sale, an owner doesn't have succession or change in lifestyle whatever, and we agree a valuation in principle. And the good market, long-term opportunities for the brands. The brands want to stay there, and we come up with a good plan as we always would. Then these opportunities are going to receive field support. For new projects in underserved markets offer new development projects, what we do -- what we have been doing successfully all along, finding great locations with the right agencies and again, these opportunities are going to be supported. So we planned investment spend of GBP 350 million to GBP 500 million in these areas. There's undoubtedly opportunity to do more but we are conscious of the pace of support, particularly from a supply standpoint and also internally from the pace of execution. So M&A and new projects in either underserved markets or new developments will play an important part in our growth in coming years. So I'll now hand over to Anders Romberg for the financial review.

Thanks, Brian. I'm Anders Romberg, the Group CFO. As you heard from Brian, our plan results in more than a doubling of sales and EBIT by FY '28 compared to our base year of FY '23. We anticipate an improving macroeconomic environment from calendar '25, while we think there will be a gradual improvement through '24. The Swiss watch market had a high level of growth across 2022, as you heard, with the market expected to normalize in '23 and '24 and then returning to sustained growth. As you heard earlier in the presentation, pre-owned watches and luxury branded jewelry will bring incremental opportunity. These 2 categories represents a big market opportunity. In our addressable markets, the secondary pre-owned market is disproportionately large, particularly in the U.S. We will continue to invest in our showrooms, generating good returns. We also see the opportunity from the integration of the Ernest Jones showrooms, as you heard Craig talk about. In the U.S. and the EU, we see further opportunities from growth from acquisitions and new showrooms. We started in the U.S. late 2017, and this segment now represents over 42% of the group's revenue. And our view is that the market remains underdeveloped and fragmented. So a clear opportunity for further consolidation. We do expect operational leverage across our plan, and we've used [indiscernible] for the translation rate from the U.S. dollar. We don't have any real transactional exposure since we source in local currency. We've had a luxury watch sales CAGR of 19% between FY '19 and '23. It's been driven by both volume at 12% and ASP mix of 7%. The volume growth has been driven by both our strategic partner brands growing. But interestingly is that our supply constraint brands have still -- show strong growth with a unit CAGR of 10%. Our elevation plan for jewelry have seen an ASP mix growth of 16% within the overall CAGR of 19%. During this period, we pulled back on promotional activity, which has a dampening effect on volume growth, but drives higher average selling price and better margins. Overall, we enter into the next 5 years with better visibility of projects than when we did our last 5-year plan back in 2021. The focus on luxury jewelry and pre-owned watches are both new versus what we included in our last plan. In the U.K., we expect the sales CAGR of between 8% and 10%, about 2% to 3% ahead of what we expect the market to grow at. This is less than what we achieved between 2020 and '23. During the past 4 years, the U.K. market had severe disruption through lockdowns and loss of tax-free to overseas clients. Sales to our domestic clients in the past 4 years has grown at a CAGR of 21%. We've gained market share through our capital programs and expansion of our mono-brand concept while driving our e-commerce channel. As you will have seen in the earlier part of the presentation, we have an extensive upgrade program agreed with key brands. In addition, we will increase our focus on pre-owned watches. Rolex Certified Pre-Owned is off to a good start and branded jewelry, which both of these categories are mostly additive to our existing business. We also will benefit from the Ernest Jones acquisition and further e-com growth. The U.S. market growth is expected to outpace the U.K. as it is, in our view, still underdeveloped. We anticipate the market to grow at an average of between 8% and 10%. We planned a sales CAGR of between 20% and 25% in this market, so well ahead of the market. As already mentioned, the market is fragmented, and consolidation is an opportunity. So in this market, acquisitions form part of our growth strategy. In addition to this, there is quite a few locations that we define as underdeveloped and should have distribution of luxury watches. So to gain distribution, you don't always have to acquire a business. We've identified quite a few such locations and are discussing them with our brand partners. The pipeline of new projects you have seen is giving us good visibility over the years to come. We have seen the benefit of our capital programs in Mayors and in the Wynn Hotel in Las Vegas, as you heard David talk about. And we don't really expect this to change as we complete our upgrade program over the next few years. The 3 Betteridge stores will be completed by FY '26. Rolex Certified Pre-Owned is off to a good start, and we are expanding the number of points of sales. The U.S. is by far the biggest market for jewelry, and we will be more active in this segment over the next 5 years. Our e-commerce in the U.S. is still in its early stage. There is a huge market opportunity in the U.S. for e-com. And as you heard Craig say, we think the EU will contribute between 4% and 6% of our sales at the end of the planning period. This will include acquisitions. Over the 5-year period, we plan to spend between GBP 300 million and GBP 350 million of showroom capital. Our historical return on capital investment has been very good, as you've seen in the previous section of this presentation. On average, our payback on capital programs has been between 2 and 4 years depending on format and location. We also plan to spend between GBP 350 million and GBP 500 million on acquisitions and new projects over the period. This could obviously go up if further opportunities were to materialize, but this is what we used in our plan, as you heard Brian say. We do expect to further improve our operational leverage over the planning period. In our existing markets, we've seen improved leverage as we invest behind our stores and drive productivity. We do expect this to continue going forward. The productivity gains come from better traffic using our multichannel tools, improved mix with higher average selling price, stable margins and higher conversion on traffic. In addition, we expect branded jewelry and Certified Pre-owned to help drive further productivity. The geographical mix is another factor impacting our overall profitability with the U.S. having a higher EBIT margin than what we enjoy in the U.K. So in total, we expect to add about 50 to 150 basis point of leverage by the end of the plan. We expect to maintain a strong ROCE over the plan period. Last year, we closed at the ROCE of 27.9%, and we plan to range between 24% and 28% over the life of the plan. Expanded EBITDA, coupled with good capital management is expected to deliver this. Capital intensity is planned to reduce in the latest years of the plan as we finish off our big upgrade programs in the U.K. as well as in the U.S. We will need some working capital investment in jewelry and pre-owned watches in order to drive sales and gain market share. The plan delivered strong cash flow to fund organic and inorganic growth. In addition to that, obviously, we have our existing facilities. We have planned a free cash flow conversion rate at between 65% and 70%. We will continue to prioritize growth in the business through investment in showrooms, new projects and acquisitions. We will continue to maintain some flexibility and be optimistic for investments in case we could grow that number beyond the 500. So capital allocation of any excess cash will be advised at the time. So the plan calls for more than doubling of sales and EBIT over the 5 years. This chart illustrates the building blocks behind our model and indicates where we see the market opportunities. Vertically shows in which market we see the opportunity, and on the horizontal axis, it indicates the size of opportunity. Capital investment into existing stores has -- is a proven model with good returns. We plan to spend in this area between GBP 300 million and GBP 350 million, which includes space expansion and/or relocations of existing stores. E-commerce growth is expected to continue and certainly in the U.S. Certified Pre-Owned will further drive growth in this channel, which is the biggest channel within that category. Certified Pre-Owned is a segment which has limited distribution in our store network, as you heard before, and we see that as an add-on to our existing underlying growth. Luxury branded jewelry is an area where we see significant growth potential. We haven't really included a really aggressive growth in this category in our plan, as you heard Eric say, if the model works, it could become, obviously, a bigger opportunity over the years to come. So we just closed the acquisition of the Ernest Jones showrooms or about to close, and this will drive further growth in the U.K., obviously. In addition to this, we plan to spend between GBP 350 million and GBP 500 million on acquisitions and new stores. Track record, as you heard Brian say, is very good. The payback of 4 to 4.5 years is beyond what we expected when we did these acquisitions. This will predominantly take place in the U.S. and the EU market. As mentioned, we expect improved operational leverage by between 50 and 150 basis points. And please don't use the scale on the horizontal when you go home and take out your ruler. So in summary, we have a proven model of success, which is scalable, and we operate in a fragmented market with strong market dynamics and all of our investment programs has worked so far. We operate in a very dynamic categories and have market leadership in the U.K. and the U.S. luxury watch markets with a significant growth opportunity in the EU. We have strong multifaceted growth plans, as you heard about. We expect further operational leverage over the plan through driving higher productivity. We also planned in significant investment to support growth over the plan period, and we have the infrastructure in place to support this growth plan. I will now hand over to Brian for some closing remarks. Thank you.

Thanks, Anders. First, little apology, I actually saw a typo there on the improvement -- profitability is 50 to 150 bps. And those of you that are still paying full attention might have seen that come up at [indiscernible]. So we'll correct that. So thanks to all my colleagues for their presentations to you today and all of you for your attention. As a management team, we feel confident in the plans that we have presented to you today. The market opportunity is undoubtedly there. We have the credibility, the momentum and the resources to grab the opportunity and deliver impressive growth. To date, we have executed plans very well transforming our U.K. business, launching with great success in the U.S. and building our infrastructure there, and they're launching in EU. In doing so, we have grown sales and profitability consistently every year with great balance sheet management. Our unique model works. We have brought an approach to the world of watch retailing that honestly did not exist before, and we'll do the same for branded jewelry. We are in markets that are underdeveloped, and we have the development plans and the support of our brand partners. We have great growth plans [ completing the rollout of ] Mayors, Goldsmiths Luxury, Mappin & Webb contemporary and Watches of Switzerland, a new contemporary design for Betteridge, developing our successful e-com businesses U.K. and U.S. and launching in Europe, expanding and driving the productivity of mono-brands becoming a leading player in the pre-owned markets through our Rolex CPO and Analog Shift, growing our jewelry business through our focus on luxury brands and that's [ turning new ] multi-brand concept and the acquisition of 19 Ernest Jones stores here in the U.K. and then adding incremental business through acquisitions and the new showroom opportunities in the U.S. and EU, all of which [indiscernible] our plan for more than doubling sales, improving profitability and driving great returns on investment. So finally, many thanks to all involved in putting the plan and presentation together and thank you to all of our colleagues who do amazing work and inspire us continually. So we're now ready to open the floor to Q&A. And my colleagues will join me back up here. I think we've got a roving microphone.

Louise Singlehurst from Goldman Sachs. Thank you for all the information here this afternoon. It's very exciting times ahead by the sounds of things. I wondered if you could just clarify a couple of things. I thought the presentation from Eric and also Craig, just in terms of the merchandising opportunity, particularly for the U.K. Can you just tell us about how much exposure you have today in the stores for jewelry? Just so we can try to contextualize the size of jewelry today and how far that can go. And then also just on a question for Anders as well on the CapEx. Can you help us think about the CapEx cycle for the organic business today [ pre any ] future programs or projects? And does that start to normalize post 2026? It sounds like there's a lot of the CapEx and the refurbishments, which comes to the end of the cycle in 2026.

Jewelry, [indiscernible].

Yes, I can help with that I think, and I'll hand back, Eric. The truth is, and a lot of the [ refurbs ] we've done over the years gone by, we have reduced space for jewelry. And predominantly, it has been our own branded jewelry as well rather than necessarily luxury branded jewelry. And we've probably gone too far and maybe even the case for Mayors too in the U.S. We've probably gone too far. So -- but now the opportunities with stores like Liverpool that we're doing 6,500 square feet. We're just about to do 6,500 square feet in Trafford, a similar sort of size showroom in Bullring. We've now got enough space to elevate the watch brands and also elevate the jewelry within the same space. And our balance and mix of space will be much more equal between our own brand jewelry and bringing in the luxury branded jewelry that wasn't there before. So I guess our opportunity is therefore twofold, additional space in tool towards jewelry. And then within that additional space towards the luxury brands that Eric's been negotiating to get us over the last number of months. I think that's a pretty simple answer to it, I think.

CapEx?

In terms of capital, as you saw, we planned between 300 and 350 or so on existing store networks, and that would include a few [ more ] brands and so forth as well. But fundamentally, not expanding into any major developments of stores. So that's sort of the number that we have done project by project going out in the years, looking at our current [ state ] and if you added mono-brands I said. So that's part of it, the capital. And yes, it's more front-loaded than it is backloaded because we have full visibility, as you've seen from the guys of the projects that we're going to execute over the next 3 years. So we'll burn through a lot of that in that period. And then we have the other part, with GBP 350 million to the GBP 500 million, which is new store development, as you heard about Cincinnati and the likes, which are quite capital intense to build, but they generate really good returns. So we'd like to do them and acquisitions. So our preference is always to open up sort of new development because we don't have to pay a multiple on the earnings. But then again, if you buy something, you get the benefit out of the gate.

[indiscernible], Anders.

Both are good.

Anne-Laure Bismuth from HSBC. I have 2 questions. The first one is, if my understanding is correct from this morning's conference call the Rolex CPO profitability profile is broadly neutral on the [ group ] possibility. What it is about the Non-Rolex CPO? Is it the same profile? And the second question is about the growth, the midterm plan growth. What is the split between volumes and average selling price? Is it over the plan? Is it mostly -- Will it be mostly coming from volume as it was the case in the past?

Okay. Yes. So our plan is that we'd be profitability neutral [indiscernible] on pre-owned. It applies equally to Rolex and Non-Rolex, the same approach. In the case of Rolex -- and we'll get there, we'll have a lower gross margin, but then we have lower costs. And so our focus is on EBIT profitability being neutral overall. Currently, in Rolex, as we kind of transitioning, we obviously had a reasonable amount of stock in pre-owned before Certified Pre-Owned came along with Rolex. We had authenticated and done all the work on those products, but they still had to go back to Rolex. And so they've been double-locked. So we've taken a [indiscernible] margin a couple of points just during this period where we transitioned through that stock. But yes, the goal is that we'd be profit neutral on this growing segment. And obviously, the segment is expected to be largely incremental. Value and ASP, Anders?

In terms of value and ASP, obviously, we've gone through this by brand. And that clearly, starting from '23, which was partially subdued by the economics. So volume will probably recover a bit faster than value over the first 2 years of this plan, where you recover in that market segment, and we obviously see that as a big opportunity. And with the acquisition of Ernest Jones, which is Non-Rolex-anchored penetration of distribution is going to increase in those segments. So -- and we're opening up Vanderbilt is a Non-Rolex-anchored. So there will be probably a bit more volume than value in the first part of the plan. As we get along, obviously, Rolex Certified Pre-Owned is actually a higher selling price than new watches in some cases. So if you look at that, obviously, that will drive the average selling price in the opposite direction so higher. So it's a little bit tricky to work out exactly that. But over time, this category has been more value-driven than it has been volume-driven. So historically, it's been about 3% or so of volume and about 4% or so of value. So we think that mix is going to be something that we are going to enjoy going forward long term.

So he's not sure, really. Yes, the one thing we would say we haven't assumed, we never assumed pricing going forward. So in our current year, we aren't assuming -- and traditionally, there are price reviews that happened in the early part of the calendar year, but we haven't assumed any for this year. But effectively, as Anders says, looking at our historical numbers, it's included pricing and mix to drive ASP. So using that as a base going forward, effectively, you're assuming there'll be some ongoing ASP improvement.

It's Richard Taylor from Barclays. Two questions, please. Firstly, on jewelry, can I ask what percentage of revenue you're sort of assuming by the out year there? So does it grow faster or slower than the group overall? And secondly, on Rolex CPO, I realize it's very early days, but can you give us an impression of what sort of proportion of revenue it's doing at the moment? And I'm really keen to understand just how you came to those assumptions at the end of the period? 20% of Rolex in U.S. and 10% into the U.K. So sort of how is it going so far? And why did you end up with those sorts of numbers by FY '28?

I'll answer a [indiscernible] answer -- Yeah. I mean we did -- we obviously are selling our CPO at a good rate per store. We can look at the distribution expansions that we're planning. We then -- there's a lot of positives to come on it. We're going to do marketing. Right now, clients don't know that it's even in the store. We don't have [ it in the windows ]. We don't want advertising anywhere. We're not doing any online advertising. So clients are coming in and discovering they want to buy a Rolex, so discovering they can't get one and then we do introduce Rolex Pre-Owned to them, and that's effectively how the deal is getting done. But it's not a destination, therefore, as effectively converting people in store. So when you add marketing to it when we add presence online, when we get our salespeople even more trained and experienced and confident in selling a CPO, a lot of positives. On the flip side, we're going to have more competition inevitably. We are [indiscernible] retailer in the U.K. at the moment, the U.S., a couple have just added in the U.S. So we're going to get more competition. But we are looking [ at about ] using the sales per door that we have at the moment and modeling that into full distribution. And we thought the best way to express it because what we haven't ever talked about are pre-owned business. It doubled last year, but we haven't actually said what the value of it as we're probably [indiscernible] years going forward, but we haven't done yet. And we thought the best way to express it, you could probably all calculate what our Rolex business is and where it would be in '28. So take a 1/5 of it in the U.S. and take 10% in the U.K. So [indiscernible] easy ready reckoner. In jewelry, we've got quite a number of things in the hope on jewelry. So we didn't want to give a misleading impression on that either. So we aren't giving that percentage. The numbers that we are using [indiscernible] that you put up there showing where the [ uptake ] is coming from, but we got a few other things happening in jewelry that we think will benefit that percentage that we'll hopefully announce in the weeks and months ahead.

Piral Dadhania from RBC. If we could just maybe go back to jewelry, could you help us understand what the retail productivity is for the jewelry category versus watches in the stores where you merchandise jewelry already. And maybe just also give us what the average ASP would look like for watches versus jewelry, just so we can try and do some modeling going forward? That would be helpful. And then in terms of the CapEx program for new stores, the GBP 350 million to GBP 500 million, what does that imply on a per year basis in terms of new store openings? And what would the split be between the U.K. and -- U.K., Europe and then U.S., if that's possible? And then finally, just on CPO. if this CPO Rolex price falls below retail price for the majority of the offer, does that -- would you be able to maintain your profitability at the current level?

Again, I'll take the easy one last, yes. And I actually think in years ahead, products sold at good value is going to be a big part. And you saw the motivation of pre-owned purchasers that value was the #1 thing. And our approach is always going to be to maintain margin. And some of these really excessive crazy prices that have been around the last couple of years, we are glad to see them coming out of the market in some kind of common sense. I think you're always going to be paying premium for some [ Mariners and GMTs ] into [indiscernible] for a long time to come, but we are hoping the market and expecting it will move more towards value. The questions on jewelry, ASP and productivity?

I would say, you don't have a one size fit all, right, between the U.K. and the U.S. market. Your U.S. market has a higher ASP, and the U.K. is more of a lower price point. So all our work we will do on productivity is also reviewing showroom by showroom and addressing wherever we have pocket of opportunities on jewelry, and elevating the branded jewelry where we have the opportunity. So sometimes you have locations with very strong productivity in a small space. So how do we expand the jewelry in this environment and vice versa? You also have the online where you tend to have a slightly lower ASP as well in those markets, actually, where we see an increasing opportunity for also to enter. So it will be a combination of the 2. And you also have between the retail [indiscernible] different dynamics that you can also expect.

I think our big learning in jewelry, as we've been underplaying -- we've been underspacing, as Craig said earlier, with our focus on the watches. And we've been underplaying the price potential. And again, I think the U.S. has helped us understand what you can really do with the beautiful precious items. So over -- the ASP improvement we've made over the last couple of years is already significant. And we've done a lot of individual VIP events, some of the events that we do in Florida are fantastic.

Great VIP events, but also it has been great work done by Eric and the team, especially since Eric came in, in January, just looking at every one of our showrooms. I mentioned at the start, the first Mayors showroom that we did was in [indiscernible], and it's doing over 3x the sales prior to the investment into it. But we're now going back and we're putting jewelry into branded shop-in-shops there because we know it's a significant opportunity. And we probably erred like Craig mentioned too much on the side of timepieces. So they're already based on the sales that they're doing in case line, just [ define it ] to the winter shop-in-shops. And we know when we do that, we see significant increases in productivity, and we have that for pretty much every store that we're going to be renovating or refurbishing over the next 3 to 4 years.

In terms of your question on capital, we haven't given the specifics where we're going to deploy that capital. But what we've given is an indication of what revenue we're going to get out of Europe. So if you take out your little calculator and you do your math, you'll get the sales number on that. And you can go back and see what we historically paid for businesses. So that's my steer to anybody who wants to sort of work out that number. But we haven't actually been that specific in our guidance because we don't want to have to be held to detail guidance on more than what we need to be frank.

But the GBP 350 million to GBP 500 million is U.S. and EU. It's not U.K.

Edouard Aubin, Morgan Stanley. So just a few follow-ups on jewelry, sorry. So today, could you just remind us what's the mix in terms of branded versus your own brand on jewelry? And where do you plan to take that? And I guess a question for Eric, when a brand like Messika and so on have the opportunity to grow DTC or through multi-brand players like you kind of what's the incentive you provide in order for them to expand with you? And could you consider down the road doing mono-brand jewelry, like you do mono-brand watch stores? So that's number one on jewelry. And sorry, on the transition on mono-brand watch stores. So what's the dynamics between the brands pushing you to open these stores and you're really wanting to open these stores? You seem to -- if I understood reading between the lines that you seem to be having some issues with the brand -- with the store productivity. Could you just give us some idea in terms of -- or maybe not. Could you just give us some idea in terms of the sales density, the returns, the margin you're having with these stores?

Yes. I'm glad you made the comment because we were concerned that people would draw that wrong conclusion that when we talked about increasing productivity, they think we had a problem, which we don't. The brands are definitely very supportive of mono-brands, and we want to probably do more than we do at the end of the day. We've got to look for financial numbers that for us makes sense. And on mono-brands, whatever we can do them adjacent. We immediately get financial benefits of [indiscernible] share management, share leasing and so on. So we are the ones that select financial cases that worked very well for us as an open door [indiscernible] very keen that we do mono-brands overall. But what we are learning is that our mono-brand environment is a bit different from a multi-brand environment. There's different ways of productivity. We're particularly finding it in Scandinavia real people who really love the brands. They want to become collectors, want to be [ every event ] and so on. So the importance of very frequent CRM and communication and so on is higher. We're about to use -- we have a great in-house system for a CRM called [ Captivate ], but we're about to have a bit of a test of using Breitling's sales force system in the Breitling stores because they have a lot of really great programs reaching out to clients and prospects and all that. So we're going to do that. We're going to do more on product. They should be supporting the mono-brands more than they do. It's part of our wholesale allocation of product going to the mono-brands. They deserve more than that. So there's an area, again, where we can make a big difference. So we can improve the profitability, but it's not a problem. It's been a very good development for us overall. Jewelry, mono-brands and your comments in jewelry, again, I'll pass Jewelry, branded, non-branded. Yes, sure.

We normally will -- I mean, we'll [indiscernible] disclosing the breakdown between branded and non-branded jewelry. But traditionally, our offers are a lot more around our own branded jewelry, Mappin & Webb, Goldsmiths, Betteridge or Mayors. You also have a lot more of attention on bridal and engagement like more like classic offering in the past. So with -- what we're going to bring is like a branded jewelry is going to add an additional offer on top. So the -- for the brands themselves, they really are in that journey as well of developing their visibility, becoming more known. What we can offer to them is the platform. We have the distribution and also in the regions in the U.K. or in the U.S., we have the ability to cross over our watch clients to the jewelry clients as the jewelry clients. I mean we know that they are very connected clients. And these brands, they basically want to have access to all our marketing and all our platforms to really leverage that growth. And that will be the next step of development before you go to the mono-brand execution, which is basically what we've done with watches when you start and then after you start to build bigger and better visible space within multi-brand. And then after you also -- when the brand has reached a certain level of development, the brand can afford to be standing on its own and have a mono-brand operation.

And your question on the DTC and so on and how do we compete with that? The answer [indiscernible] watch brands as we compete very well with it. Probably the best retailer, if you looked at all of the watch brands, you would say is Cartier [indiscernible] the focus. Our fastest-growing brand in U.K. and U.S. has been Cartier. And it's because [indiscernible] in the regions. From an online standpoint, we are very, very competitive and very, very visible and spend a lot of marketing. We have the size and the scale. So we do fantastically well with Cartier online. So no problem with that. And Messika and [indiscernible] mono-brands with them at some point. Of course, it's under the view of the success with Bulgari, I think, is great in the U.S. and we're looking at other opportunities there. But yes, we will apply all of our learnings and success in the world of watches to the luxury jewelry brands fundamentally.

[indiscernible]. Just 3 questions. In terms of brand mix, I know you can't give specifics, but maybe where you thought versus where you were a couple of years ago with your previous CMD, where you think you're going to be directionally especially given Patek and Rolex and some of the other brands? Secondly, you gave a great table up there with all the different jewelry brands. A lot of them are under the same group, Richemont, LVMH. I'm wondering why not Cartier, but -- let's see, why not Tiffany but other brands from LVMH. So is that an aspiration and just some color. And then thirdly, on the AP House in Manchester, given it's a JV, what exactly is your role in it? And is this something you'd be looking to do more of?

We do have a [indiscernible] Cartier and Tiffany. Whenever it happens, I'm going to retire at that point, it would be the ultimate accomplishment. But there's a compelling logic for Cartier and Tiffany as I regularly presented on why wouldn't you be in the regions. I've even presented Scotland as a different country and said that's going to happen at some point. And we could represent you in that country in Glasgow and Edinburgh. So far, I'm getting nice smiles, but nothing specific. So obviously, that's not in our plan, but I do think there is a logic for it overall. But everything else, we're having a go. And I definitely -- our credibility with the groups is hugely influential and Eric been able to get in there and open the doors and make the progress that he's had overall. Brand mix and watches, how has it changed over the last few years?

No, I mean, listen, we obviously expect to see our relationship with Rolex. Some people question the Bucherer and whatever. Our relationship has never been better, actually. So we don't expect any supply disruption coming through in that space. [indiscernible] has consolidated our distribution, which we see as a positive because obviously, they're still going to need to sell the same number of units. And proportionately, we haven't lost more than anybody else, I would say. So as a result of that, we will just get sort of better productivity out of the agencies that we have and [ it frees up ] space otherwise. So I don't think the mix of those 2 brands will drastically change in our portfolio. As pointed out by David and Brian to some degree, these niche brands are interesting because there are things happening in that space. And some of these players will be big. Richard Mille, as an example, came out of that cohort some years ago. So there are things happening in this space that could lead to a change in mix, I guess. It would be additive. So I wouldn't have a problem with that, actually. So no issue. Pre-owned as a category will be a bigger portion of our business in 5 years than what it is today. That's for sure. Rolex Certified Pre-Owned, as you heard, is going to be, on average, around 15% of the group. That is all the group's Rolex revenue. So it's going to be a big number. It will be probably our second biggest brand, actually, by the end of the plan. So that's where we are. I do see sort of -- amongst sort of the strategic partner brands, they're all hungry for growth and love to work with good partners like ourselves. So I expect those to continue to do reasonably well. They're all [ transactional ] online. And obviously, in the U.S., we're in the early stages of our online journey. So they will grow really fast once we get that channel going more aggressively in the U.S.

AP House?

Yes. Unlikely, there would be any more AP Townhouses, I think. And that's a real plus point. They're allowing us to do all of the north and all of England and Scotland outside of London. So we're very, very pleased with that. They'll have their own townhouse. They've got on Bond Street. They are going to relocate, we believe, to a bigger location. They've got Harrods. They've got [indiscernible] on Sloane Street. And I can't see that growing from there. Our involvement so far has been pretty good. We've helped them with the design of the showroom. We've helped them with all the local authority things. We are, by definition, a minority shareholder in the JV. That's how they do it and how they organize it throughout the whole world. We'll help them with recruitment. But once the showroom is actually operational, we won't operate it directly, we'll have a great partnership with them, as we always have done. We'll get the sales numbers and I guess we're going to check from them every once in a while for the work that we're doing.

We have a minority percentage of the CapEx, the investment and the profits at the end of it is just a fundamentally basic JV from that standpoint. But the big thing is an AP House in Manchester is fully supplied by them, which will be -- is going to be a big number. So the percentage we have of that big number is a very attractive one to have and it's a central casting for AP in Manchester over the [ football house ] in Coronation Street.

This is Rogerio Fujimori from Stifel. I have a question perhaps for Brian, Craig and David about opportunities in terms of opening Rolex-anchored multi-brand stores in highly attractive areas like California and [indiscernible] areas for the group. And in the EU, do you see potential for that to happen? And just a clarification on Rolex brand mix, I think more or less, I think, expected to be about half of group sales. Does it include CPO or is -- or not?

Okay. Easy one, again, doesn't include CPO, right? CPO is going [ to add ], as Anders said, on average 15%. But the opportunity in...

I mean, we are looking at opportunities in California, but we're not restricting ourselves to one state. We proved that we can open up across the U.S. and open up successfully, whether it's mono-brands or multi-brands. I think there was an expectation that when we were going to come into the U.S. that we were going to stick to New York, Miami, L.A., et cetera, but there's a huge amount of business that gets done outside of there. We've got a business in Atlanta that when we do these renovations can end up being a $100 million business in itself and places like Cincinnati have been hugely successful. So we're looking at California, but we're also looking at basically across every state, and we still believe there's huge potential to grow.

EU?

Yes. I mean they're all so different is the truth. There's going to be some markets where you go and you believe, possibly the only way to enter would be through an acquisition. The market is pretty mature. There's good retailers doing what they do and therefore, new opportunities is less prevalent, I think, and then there's other markets and much less mature markets where you think if we couldn't acquire something there, we could certainly turn up and offer Rolex and alternative -- and Patek and others actually much better alternative with our model and what we do. So I think it's going to be a real different approach in each area, and we're being relatively opportunistic in those areas. We're looking at them all and seeing what our best route is. Some may be acquisitions, some maybe new opportunities, but we'll update as we go forward.

And one other thing is- [ that would be interesting]. We've only got planned the one mall operation in Europe. And we think really good quality malls have been overlooked, Westfield type malls, so the Mall of the Netherlands, we think is a really nice mall. Mall of Scandinavia near Stockholm is a really nice mall, and we're having a good early experience there and looking forward to the Mall of the Netherlands. We have Cartier, we have OMEGA, we have [indiscernible]. We're going to create a Watches of Switzerland in a mall environment. And there's a lot more malls to go out in the U.S. and EU. So we haven't planned any big expansion on that, but it will be a very, very nice experiment. And if you understood alongside that comes then the opportunity of us doing it online with these brands. So we're representing a much broader assortment of brands because we're doing a multi-brand. So lots of irons in the fire of things that could develop. Can we just take one more please?

It's Louise Singlehurst again from Goldman. Just a couple of follow-ups, if I may. Just on the -- when we look out for the second half, obviously, the full year guidance reiterated again today. Obviously, that's a very nice acceleration in the second half ahead of us. For Europe and the U.K., is that much more driven by, clearly, what you can see in the stores today, but more about the supply that's coming into the system. So the actual delivery of product that you're getting. And I think this morning, you mentioned about the resiliency of the high-end consumer and the luxury price points in the U.S. And I wondered whilst we got the opportunity to ask about like the U.S. specifically, if that's been stronger than you expected? Any surprises there in the quarter that's just gone? And then secondly, just on Bucherer and the U.S. given the news flow with Rolex and the acquisition of Bucherer, is there any sense in the market that you feel that Bucherer might be ramping up their willingness to step up in the U.S. or their presence in the U.S. specifically? And then lastly, I was just going to ask if there's any possibility for Rolex to go back into Ernest Jones once it's rebranded.

Again, I'll take the easy one. So we're not anticipating them going back into the Ernest Jones stores. But they are really, really nice stores. They're adding to distribution in the U.K. in principle. So you'd have to come up with a really, really sort of compelling situation, which we're not anticipating overall. We have not seen any change in Bucherer behavior at all. We've been pains to really point out to all [ the years at ] community, nothing has changed. Overall, Rolex have been really [indiscernible] hands-off, let Bucherer get on with it. They'll look at opportunities, maybe sometimes us and them, but they'll look at them and see what the best thing is for the Rolex brand and I 100% trust that that's what's going to happen.

On the U.S. in terms of luxury timepieces or do we have any surprises in the last quarter? No, not really. I mean the reality is our stores are continuing to mature all the time, and we're seeing that higher price point. As a consequence, we're adding in more of these independent brands. And we're seeing great success with them. We just recently added in, and we're talking about it this morning, the brand [indiscernible]. They're off to a great start in just a matter of a couple of weeks. So we're becoming a destination for those timepieces. And so that's fantastic. And then one other thing just on Bucherer or just on the U.S. market. We came into the market 5 years ago, and I think created a bit of a ripple at the time. And then the rest of the market reacted and started investing, and we're seeing the same thing that happened in the U.K., particularly in London that when everybody invests, the whole market elevates. And the market is continuing to grow and result, there's still a long way for the overall U.S. market to grow to get to a per capita level that the U.K. is at. And there's more than enough space for us and for Bucherer and for the other retailers that are out there to grow.

Is there any logic for the U.S. being 40% of the U.K. per capita? I don't think there is [indiscernible] get the concentration of [ wealth ] that's there. And so we are absolutely convinced, and I think we've proven [indiscernible] retail. And we think it's -- there is this underlying demand and understanding of watches, but it was all very much an online community and whatever. Again, these brands were bigger in the U.S. because people really had an interest in horological developments. But good retail, just was -- there wasn't enough of it around the U.S.

It is also worthwhile to point out, going back to 2005, actually, it was the same. And since 2005, really nothing happened in investment into retail in the U.S., whereas in the U.K., [ Harrods ], Selfridges and us and others, we came in late in the cycle, but that whole retail exposure and investment took place in this market, which drove the productivity.

And the evidence is there from the last couple of years. The U.S. is the fastest growing market. It's now the biggest market in the world, it wasn't when we set out a couple of years ago. So I think the U.S. structurally offers big upside for sure. Okay. Ready for a drink? I know we are, for sure. But thanks very much for your attention and your support. And obviously, if you can join us for a drink and carry on chatting, we're very happy to do that. Thanks, everybody.

Thank you.