Watches of Switzerland Group PLC on Wednesday faced a call from investor Gatemore Capital Management to move its primary listing to the US.
Gatemore expects the Leicester, England-based watch retailer to generate the majority of its future revenue from the US market, and believes the move necessary to ‘fully unlock the value of its stock’.
The move would lead to the retailer’s exit from the FTSE 250 index, even if it retained a secondary listing in London.
Gatemore in September said it owned 1.9 million shares in Watches of Switzerland, a 0.8% stake.
The London-based activist investor said the listing would provide Watches of Switzerland with a ‘fresh opportunity to highlight the company’s exposure to the growing market for fine watches and branded jewellery in the US’, with no exposure to the slowdown of the luxury market in Asia. It would also give the business access to ‘deeper pools’ of capital and US growth investors, more liquidity, and higher valuations that ‘more accurately reflect the company’s intrinsic value’.
Watches of Switzerland aims to double its business by financial year 2028.
Gatemore Managing Partner Liad Meidar said: ‘Watches of Switzerland has established itself as the leading retailer of premium watches. It is an exceptional business, providing customers a premium experience and boasting longstanding partnerships with some of the strongest brands in the world. With a clear leading position in the UK market, the company is now well-positioned to unlock additional growth in the massive and under-penetrated US market.
‘We are impressed with the track record and ambition of the management team, and we call on them to consider a listing in the US to fulfil Watches of Switzerland’s potential and help unlock the intrinsic value of this business.’
When contacted by Alliance News on Wednesday morning, Watches of Switzerland said: ‘We maintain an open dialogue with all our shareholders, but do not comment on individual shareholder views’.
Shares in Watches of Switzerland were down 1.1% at 431.89 pence each in London on Wednesday morning.
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