Watches of Switzerland, Britain’s largest Rolex retailer, faces calls to relocate its stock listing to the US.
- Investor Gatemore argues that the company’s share price does not reflect its true value due to misconceptions related to the luxury goods market.
- Relocating the listing to the US could offer better market conditions, potentially increasing valuations for Watches of Switzerland.
- The luxury brand has faced market challenges in 2023, with its share price falling significantly since January.
- CEO Brian Duffy has voiced concerns over UK policies impacting the luxury sector, particularly the removal of tax-free shopping.
Watches of Switzerland, the UK’s leading retailer for Rolex watches, is being urged to shift its primary stock listing from London to the United States. This call comes from Gatemore, an investor who recently acquired a substantial share in the company. Gatemore argues that misconceptions about the luxury goods sector, particularly concerning its slowdown, have led to a dislocation in the company’s share price.
Gatemore believes that a US listing could enhance Watches of Switzerland’s market valuations, as American markets are often perceived as more favourable for luxury brands compared to London’s. The announcement of this potential move has already influenced the market positively, with shares climbing over 2% following the news.
The managing partner of Gatemore, Liad Meidar, emphasised the firm’s solid fundamentals and robust management team. However, he also pointed out the broader issues plaguing UK markets, suggesting that these systemic challenges are prompting several companies to consider relocating their listings overseas.
This year has posed significant challenges for Watches of Switzerland. Its share price has plummeted by more than a third since the start of 2023, with a notable £516 million loss in market value earlier this year. This downturn was exacerbated by warnings about declining demand for luxury items, as consumers prioritised fashion and travel amid rising living costs.
Notwithstanding this setback, Gatemore remains optimistic about the company’s prospects, especially in the US market where luxury spending remains strong. Swiss watch export data continues to show resilience in the US and UK markets, implying that Watches of Switzerland has managed to withstand the broader slowdown in luxury spending.
In addition to Rolex, Watches of Switzerland offers a range of high-end products, including Cartier jewellery and Audemars Piguet watches. The company has been increasing its presence in the US, which Gatemore believes to be a largely untapped and promising market opportunity.
Concerns about UK government policies affecting the luxury sector have also been voiced by Brian Duffy, CEO of Watches of Switzerland. The elimination of tax-free shopping for overseas visitors is a particular point of contention, as it could potentially reduce tourist spending within the UK. Duffy has been proactive in addressing this issue, even joining other luxury business leaders in petitioning Chancellor Rachel Reeves to conduct a thorough review of this policy.
The call for Watches of Switzerland to move its listing to the US highlights broader concerns over the UK’s market conditions and policies impacting the luxury sector.
