Gatemore requires Watches of Switzerland stop London for US

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

Gatemore Capital Management said on Tuesday WOSG must ‘fully unlock the value of its stock’ by moving its primary listing from the UK to the US, where it would benefit from ‘access to deeper pools of capital’, higher valuations and ‘significantly greater liquidity’.

WOSG, which is the leading luxury watch retailer in the UK, has seen shares come under pressure as demand for high-end consumer goods across Asia and Europe has shown increasing weakness.

Tough environment: Watches of Switzerland is a market leader in the UK but it has seen sales come under pressure from a slowdown in luxury demand 

Gatemore, which is not a top ten shareholder in WOSG, last month called on the group to institute a bumper buyback package in efforts to boost its ‘weak’ share price.

WOSG has a portfolio of more than 220 brick-and-mortar showrooms and an expanding online presence, and has been making efforts to grow in the lucrative US market.

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

Should WOSG follow through with Gatmore’s suggestion, it would mark another blow to London markets with the FTSE 250 losing the likes of DS Smith, Spirent Communications and Wincanton to foreign takeovers in recent times. 

WOSG shares are down 35 per cent since the start of 2024 at 439.52p, reflecting a significant slump in luxury demand this year.

The shares have still added 42.7 per cent since listing in May 2019, but remain around 70 per cent below their December 2021 peak.

A research note published by Peel Hunt earlier this month downgraded WOSG profit expectations for 2025, noting UK trade this financial year ‘has not been stellar’ after a ‘tough’ 2024.

Its US business, where the group has been making efforts to grow, has been held back by product availability issues.

Peel Hunt currently has a WOSG target price of just 400p – around 9 per cent around their 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 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 underpenetrated 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 WOSG’s potential and help unlock the intrinsic value of this business.’

WOSG has not responded to a request for comment.

Earlier this year, Gatemore had FTSE 250 chemicals firm Elementis in its sights, calling for a leadership cull amid what it called ‘self-inflicted management failures’ and frustration over the chemicals firm’s share price performance.