You might want to reset an Apple Watch if you are about to sell it or need to start again because of problems. This is how to do a factory reset. It can be done from the watch or the iPhone which controls it.
To reset on the Watch
Use this if you don't have the iPhone available.
On the watch: go to Settings, then General, then Reset. Tap "Erase All Content and Settings". Enter your passcode if you are asked for it. For the cellular model, choose whether to keep the cellular plan. Confirm the reset. The watch will reset, then restart and display the welcome screen.
Reset Using iPhone
This is the better method to use, if you do have the phone available. It removes the activation lock, which you need to do if the watch will be used by someone else.
On the iPhone: open the Watch app. Tap the "My Watch" button at the bottom. Tap "All Watches" at the top. Tap the "i" button next to the watch. Tap "Unpair Apple Watch". Confirm this. Enter your Apple ID password if asked. The watch will reset and be ready to pair again or hand on to another person.