Watches of Switzerland boss Brian Duffy says wealthy households who saved cash during the pandemic by not being able to go on overseas holidays have been spending their money on luxury watches instead.
The chief executive told PA news agency that customers' appetite to treat themselves to posh watches has led to a huge increase in sales at the business over the last three months.
And while customer numbers have fallen, the value of each sale was higher showing that there is a "willingness for people to trade up and indulge a bit more."
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Mr Duffy said: "In the UK and US there is accumulated disposable income and we are an attractive category in that sense.
"We call our categories 'rational indulgences'. Buying a beautiful luxury watch you can feel confident that it's going to preserve value, it's going to last forever, it's a family heirloom.
"So, therefore, in these circumstances, when people have money to spend, our category is high up in their priority list. So, definitely we've benefited from that."
Watches of Switzerland - which is headquartered in Braunstone, Leicester - is the UK's biggest Rolex, OMEGA and TAG Heuer retailer.
The group has 148 stores in the UK and the US.
For the 13 weeks to August 1, the company recorded sales of £297.5 million which is up by more than 96 per cent on the same period last year when stores were closed as a result of the national lockdowns.
Sales for luxury watches jumped by 97.1 per cent to £259.3 million while luxury jewellery was up 98.9 per cent to £20.1 million.
Online sales also increased by more than 15 per cent on the same period last year, despite stores reopening.
In a statement to the London Stock Exchange, Mr Duffy - who revealed the company took a £100 million hit because of the pandemic - added: "We have had a very good start to the new financial year.
"Trading in the UK has been extremely strong, driven by sustained high demand from domestic clientele. Our newly opened and refurbished stores have performed well, whilst our ecommerce business has also continued to grow impressively.
"We will continue to invest for growth and to advance our strategy to further enhance our leading position in the UK and become a leader in the US luxury watch market."
Earlier this year, Watches of Switzerland announced that it expects to hit sales of £1 billion in 2022 after seeing strong results on the back of the pandemic.
