Watches of Switzerland Held Talks on Take-Private Offers, Sources Say

Watches of Switzerland Group has held talks in recent months regarding potential offers to take the luxury watch retailer private, according to three people familiar with the matter. The company's CEO, Brian Duffy, reportedly responded to the initial approaches based on a belief that the market undervalues the firm.

Deal Discussions

While discussions have taken place, no formal offer has been made, one of the sources said. A separate source indicated that the company was seeking an offer significantly above £7.50 per share.

In response to inquiries, Watches of Switzerland stated that it does not comment on rumors or speculation. The company, which is the UK's largest retailer of luxury timepieces, has a significant presence in both the United Kingdom and the United States, with sales split about evenly between the two markets.

Market Performance and Context

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Shares in the FTSE 250 company have rallied 55% this year to approximately £7.20, buoyed by strong demand for high-end brands like Rolex and Cartier and positive U.S. consumer sentiment. Despite this rally, the stock remains at less than half of its 2022 peak, according to LSEG data, reflecting a broader slowdown in European luxury sales.

The company's stock value fell sharply in 2023 after its key supplier, Rolex, acquired the Swiss-based retailer Bucherer. The move sparked investor concern over the future of Rolex's relationship with other retail partners, including Watches of Switzerland. The company is also navigating margin pressure from higher gold prices ahead of its full-year results, which are due to be published on Tuesday.

A Potential London Delisting

A successful take-private deal would mark another departure from the London Stock Exchange, continuing a trend of UK-listed companies being acquired by foreign or private buyers. This migration has raised concerns about the competitiveness and depth of London's public markets.