Watches of Switzerland's Investor Day (WOSG), Earnings at Judges Scientific (JDG) and Douglas Dynamics (PLOW)
Three WOSG segments that investors underappreciate
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Watches of Switzerland (WOSG.L)
More background: Special Report, 2026 outlook, Podcast
Watches of Switzerland (‘WOSG’) hosted an investor day on July 14. My impression from the day was that the company is firing on all cylinders in ways that investors still underappreciate, despite the recent run-up in the stock.
Private equity firms appear to think so too, with Reuters recently reporting that:
“Watches of Switzerland Group (WOSG.L) has held talks in recent months over potential offers to take the luxury watch retailer private, said three people close to the matter…
…CEO Brian Duffy responded to the initial approaches because he believes the stock market undervalues the company, two of the sources said, with one adding that no formal offer has been made. Private equity funds and strategic bidders have shown interest in the company, a second person said. The third source said the company was seeking an offer of significantly more than £7.50 per share.”
I wrote recently about how WOSG’s economics are more similar to a subsidiary and partner of Rolex than a retailer, and that the company has a long runway to roll up the U.S. Rolex market. While that will continue to be the main driver of the stock, in my view, the investor day highlighted three other areas of growth where the company is creating value that I believe investors underestimate:
The Roberto Coin jewelry brand that WOSG controls
E-commerce
Pre-owned watches
These three areas now account for 24% of group revenues and represent businesses that management has built out in the last few years and that are growing at double-digit rates. The rest of this article will focus on why I think that can continue.
Roberto Coin
The acquisition of Roberto Coin’s US distribution in 2024 for just 4.5x EBIT appears to have been a home run. I had concerns at the time that Roberto Coin may lose some of its customers, as stores might be reluctant to stock the brand now that it is owned by a competitor in WOSG. However, management disclosed that there has been no churn in the customer base since the acquisition and that wholesale revenues have increased from around £110mm to £127mm. EBIT has increased from around £24mm to £25.8mm once a write-down for the SAKS bankruptcy this fiscal year is adjusted out.
WOSG also generates an undisclosed amount of revenue from Roberto Coin through mono-brand boutique retail sales, online sales, and the retail margin that WOSG now earns by selling Roberto Coin through its own stores.
Even more importantly, WOSG has now begun rolling Roberto Coin out across its store base and elevating it (e.g., with a shop-in-shop), and the initial results are very encouraging. Shop-in-shop upgrades across 11 showrooms increased monthly sales +186%, split +73% average transaction value from $3.5k to $6.0k and an implied +65% from more transactions.
As a comparison, stores that did not get the shop-in-shop upgrades saw Roberto Coin sales +68% (presumably staff were still told to push Roberto Coin ahead of other jewelry), so the incremental effect of the shop-in-shop is implied at +70% (2.86/1.68).
WOSG is now taking this data to the other retailers that Roberto Coin sells through and pitching them to build out shop-in-shops themselves.
The opportunity is large: