This is a huge week for Watches of Switzerland Group with the opening of its Rolex flagship showroom on London’s Bond Street on March 14.
The opening is particularly significant given it has proceeded despite Rolex now owning WoSG’s biggest competitor in the UK and United States: Bucherer.
As such, it is a strong statement of ‘business as usual’ between Rolex and WoSG, one of its biggest wholesale partners in the world.
The enduring partnership will have been feeding into growing investor confidence in WoSG, which has been viewed as a proxy bet on the future of Rolex since the retailer went public in 2019.
The group has seen its share price recover from a post-pandemic low of 332p to 575p at the end of January.
However, investors have been cooler or taking profits over the past two months, paring the price back to 450p last week.
Today, WoSG has announced the start of a share buyback program that will bring stock worth up to £25 million back into the business.
Buybacks reduce the number of shares in circulation, which gives all remaining shareholders ownership of a greater percentage of the company. This often leads to an increase in a company’s share price.
Watches of Switzerland Group’s shares spiked at the opening bell this morning to 485p, but have since slipped back to 462p, a 2.44% rise over Friday’s close.
The group is using a tranche of £150 million that it has at its disposal after a refinancing in December 2024 created an additional £50 million in headroom.
In a statement to the London Stock Exchange this morning, the company says it has a clear and disciplined approach to capital allocation — prioritising investment for growth through showroom elevation, new projects and acquisitions before returning to shareholders any surplus capital above and beyond those requirements, as appropriate.
The group has never paid a dividend to shareholders and says that its pipeline of capital investment remains unaffected by today’s buyback announcement.