The Watch Gallery is looking to sell at least 50% of the business as two of the original backers of luxury watch retailer seek to sell their shareholding.
The right buyer could purchase the entire company, which had a turnover of £63 million in 2015, up 13% on the prior year, according to the company’s chairman David Coleridge.
Profits for 2015 have not been disclosed, but earnings for the 2014 financial year were £2.3 million from sales of £56.2 million, according to accounts filed at Companies House.
The Watch Gallery was originally called David Morris Stores when it was created in 2004. It changed its name to DM London in 2007 and then to The Watch Gallery last year.
Mr Coleridge explained to WatchPro that it was founded by five shareholders; four individuals and one closed US fund. The fund has passed its due date and as such is obliged to sell its shareholding. One of the other major shareholders is also seeking to sell their stake at the same time.
Both parties’ shareholdings amount to just under 50% of the business, but Coleridge told WatchPro that “logically one would expect that more than 50% would sell, anything between 50% and 100% is the answer.
“They’ve been investors for nine years and seven months,” explained Coleridge. “They originally invested for three to five. I think they’re all pretty happy, they’ve all done really well. The key thing has been the fund, which closed some two years ago and is legally obliged to try and liquidate itself.”
The Watch Gallery consists of several elements. It operates the Rolex boutique at One Hyde Park in Knightsbridge – the biggest in Europe – as well as four The Watch Gallery stores in London and Manchester.
The business also operates the watch concessions at John Lewis, Topshop and The Wonder Room at Selfridges, which includes a newly expanded Rolex boutique. Online the business sells luxury watches through its website and also provides the online watch sale service for John Lewis, ASOS, Topshop and Selfridges.
Coleridge, who has appeared in WatchPro’s Hot 100 list for the past two years, also reveals that The Watch Gallery will open a new concept store next to the Royal Opera House in Covent Garden this summer.
As such The Watch Gallery has appointed Stonehage Fleming Advisory Limited to conduct a strategic review and search for trade partners to ‘help it further expand its business’.
Coleridge explained that the business is looking for ‘complementary’ investors, potentially with experience of online retail or watches.
The announcement of the potential sale comes on the back of record annual sales, which rose 13% year-on-year to £63m. The Watch Gallery states that the average annual growth over the last nine years has been 18%. The Watch Gallery has been a pioneer of the online sale of luxury watches which now accounts for 26% of turnover and this year experienced year-on-year growth of 41%.
To put that into perspective The Watch Gallery launched a retailer exclusive chronograph from Hublot last Thursday and within four days had sold 11 of the £9,500 watches online.
The Watch Gallery co-founder Stephen Murphy said: “We have a strong profitable UK business with a winning internet proposition and excellent growth prospects. We see this as an excellent basis for international expansion and this includes a search for a potential partner with complementary strengths.”