Watches of Switzerland Group PLC's (LSE:WOSG) acquisition of online luxury watch platform Hodinkee has been described as "a sensible bolt-on move" by Shore Capital Markets.
It will strengthen WOSG's capabilities in the UK and US, the broker added. Additionally, Hodinkee's watch and jewellery insurance services will be tied into WOSG’s partnership with Chubb.
New York-based Hodinkee, founded in 2008, is known for its digital, print, and video content, along with limited edition watch collaborations and insurance offerings.
WOSG did not disclose how much it paid for Hodinkee, but Shore Cap surmised that “it is presumably a cash transaction noting that it is funded from existing facilities with little impact upon group leverage”.
On WOSG’s operational outlook, its analysts stated: “WOSG had a quite torrid 2023/24 and central to a recovery in its rating is meeting forecasts on an ongoing basis, noting continued investment in the portfolio of stores and the Coin and now Hodinkee acquisitions.
“Comparatives are now more favourable, which may yet be the springboard to a better financial performance and stock price, the key to delivery being the prospect of sequential annual earnings progress.”
WOSG shares added 1.3% to 462.4p on Friday.