Gatemore Capital Management has acquired a stake in Watches of Switzerland Group Plc and is urging the luxury timepiece retailer to implement an aggressive share buyback strategy and explore a listing in the United States.
The activist investment firm announced its position in the London-listed Watches of Switzerland on Tuesday. Liad Meidar, Gatemore’s managing partner, shared insights at the 13D Monitor Active-Passive Investor Summit in New York, revealing that the firm engaged with Watches of Switzerland last month regarding its proposals.
Gatemore has recommended a share buyback ranging from £25 million ($32 million) to £50 million, a message that Meidar stated was “well received” by the company. Additionally, Gatemore advocates for a US listing to attract long-only investment funds interested in gaining exposure to the brand. “It’s the only way to get exposure to the Rolex story in a meaningful way,” Meidar explained.
He also suggested that Watches of Switzerland should consider acquisitions within the US and among other watch retailers.
A spokesperson for Watches of Switzerland commented, “We maintain an open dialogue with all our shareholders but do not comment on individual shareholder views.”
Watches of Switzerland’s shares have declined over a third in value this year, though they saw a slight increase of 0.9% in London trading on Tuesday, bringing the company’s market capitalization to approximately £1 billion.
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