Gatemore calls on Watches of Switzerland to leave London for the US

An activist investor is calling on the FTSE 250 Watches of Switzerland Group to leave London in favor of a listing on a US stock exchange.

Gatemore Capital Management said on Tuesday that WOSG should “fully unlock the value of its shares” by moving its primary listing from Britain to the US, where it would benefit from “access to deeper capital pools”, higher valuations and “significantly greater liquidity ‘. ‘.

WOSG, Britain’s largest luxury watch retailer, saw its shares come under pressure as demand for high-end consumer goods continued to weaken in Asia and Europe.

Gatemore, who is not a top ten shareholder in WOSG, last month called on the group to implement a large buyback package in a bid to boost its ‘weak’ share price.

WOSG has a portfolio of more than 220 physical showrooms and a growing online presence, and has made efforts to grow in the lucrative US market.

“We expect WOSG to generate the majority of its future revenues from the US market,” Gatemore said. “Now it’s time for this listing change.”

If the WOSG were to follow Gatmore’s suggestion it would be a further blow to the London markets, with the FTSE 250 losing companies such as DS Smith, Spirent Communications and Wincanton to foreign takeovers in recent times.

WOSG shares have fallen 35 per cent since the start of 2024 to 439.52p, reflecting a significant drop in luxury demand this year.

Shares are still up 42.7 percent since listing in May 2019, but remain about 70 percent below their December 2021 peak.

A research note published by Peel Hunt earlier this month cut WOSG profit expectations for 2025, noting that UK trading has been ‘not great’ this financial year after a ‘difficult’ 2024.

The American activities, where the group is making efforts to grow, are being held back by product availability issues.

Peel Hunt currently has a WOSG target price of just 400 cents – around 9 percent around its current value.

Liad Meidar, managing partner at Gatemore, said: ‘Watches of Switzerland has established itself as the leading retailer of premium watches.

“It is an exceptional company that provides customers with a best-in-class experience and has long-standing 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 achieve additional growth in the vast and under-penetrated US market.

‘We are impressed by the track record and ambition of the management team, and we call on them to consider a US stock exchange listing to realize WOSG’s potential and help unlock the intrinsic value of this company .’

A WOSG spokesperson said: ‘We maintain an open dialogue with all our shareholders, but do not comment on the individual views of shareholders.’

Earlier this year, Gatemore targeted FTSE 250 chemicals company Elementis, which called for an axing of its leadership amid what it called “self-inflicted management failures” and frustration over the chemicals company’s share price performance.