Rolex Acquires Luxury Retailer Bucherer, Shares of Watches of Switzerland Plummet by 20%
- Bucherer, a watch and jewelry retailer, operates over 100 stores worldwide
- Watches of Switzerland Group is a prominent authorized retail partner for Rolex
Shares of Watches of Switzerland Group experienced a significant decline following the announcement of Rolex’s acquisition of luxury retailer Bucherer.
Investors expressed concerns that Rolex’s purchase indicates a potential shift away from using authorized partners for retail sales, opting instead to sell directly to affluent customers.
While this deal could impact Watches of Switzerland’s trade, the London-based company assures that Rolex’s “processes of product allocation or distribution developments” will remain unchanged.
Slump: Watches of Switzerland Group shares plummeted on Friday after watchmaker Rolex revealed it had bought luxury retailer Bucherer
Bucherer, headquartered in Lausanne, Switzerland, operates more than 100 outlets worldwide, including prestigious locations like Selfridges on Oxford Street and the Royal Opera House in Covent Garden.
The company has been a major retail partner for Rolex for nearly a century, providing not only sales but also after-sales service and watch repair services.
Rolex has stated that Jorg G. Bucherer, a family member and current owner, decided to sell the business and establish a charitable foundation. The acquisition is seen as beneficial for all watch and jewelry partner brands and the employees of the Bucherer Group.
According to Watches of Switzerland, Rolex has confirmed that this acquisition does not signify a strategic move into retail and will not involve any operational role in the Bucherer business.
However, despite this reassurance, Shares of Watches of Switzerland Group plunged 20% as investors speculate about the possibility of Rolex using Bucherer as a direct channel for sales, bypassing authorized dealers like Watches of Switzerland.
Russ Mould, investment director at AJ Bell, commented on the situation, stating, “There has been a trend among various product manufacturers, including big trainer companies, to sell directly to the consumer. In doing so, they gain insights into customer preferences and increase profit margins by eliminating intermediaries. The same scenario could potentially occur with Rolex, using Bucherer as its sales channel instead of authorized dealers like Watches of Switzerland.”
This news of the Bucherer acquisition follows Watches of Switzerland’s recent report of a slight dip in summer sales due to weaker performance in the UK, influenced by delayed product deliveries. Chief Executive Brian Duffy also attributes the decline to the UK Government’s elimination of VAT-free shopping, causing international tourists to choose other European cities over Britain. Duffy has joined other business leaders in supporting the Daily Mail’s campaign to overturn the “tourist tax.”
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