Luxury juggernaut Rolex has stunned the international watch industry by announcing the acquisition of Swiss retailer Bucherer.
Bucherer began in 1888 when entrepreneur Carl-Friedrich Bucherer and his wife Luise opened a store in Lucerne.
The company has remained within the family until now, expanding its store count to approximately 100, with annual sales estimated at $AU4.1 billion.
The retailer is chaired by 87-year-old billionaire Jöerg G. Bucherer. The details of the deal with Rolex have not been disclosed.
“To preserve the long-standing partnership between the two companies and perpetuate their shared history, Rolex has decided to acquire Bucherer. The watch retailer will keep its name and continue to operate independently,” a statement from Rolex reads.
“Its integration into the Rolex group will be effective once the competition authorities have approved the takeover transaction.
“Rolex and Bucherer share a long history. Bucherer has been an official retailer of the Rolex manufacture since 1924. The professional relationship, friendship ties and mutual respect have endured to this day. Indeed, Jörg Bucherer is the last person still in activity to have known and worked with Hans Wilsdorf, the founder of Rolex. He will remain as honorary president of the Bucherer group.”
Industry reactions
According to reporting by Reuters, share prices for Watches of Switzerland declined by almost 30 per cent in a single day following the Rolex announcement.
Watches of Switzerland released a statement affirming that Rolex’s takeover of Bucherer was not a strategic move towards retail.
Indeed, many industry figures were shocked at the timing of the announcement.
“If the watch industry was snoozing through the dog days of summer, Rolex just woke it up. On Thursday, the Swiss watchmaker announced that it had agreed to purchase Bucherer, the international watch and jewellery retailer that owns more than 100 stores in Switzerland, the US, England, Germany, France, Denmark, and Austria,” writes Justin Fenner of Robb Report.
“The announcement caught the horological world by surprise — after all, lots of the European business community is on vacation this month, and the biggest news in this industry generally gets shared during a few tentpole events.”
Others were quick to highlight the significant change in strategy for Rolex, a company that has previously relied on external distributors.
“The octogenarian Bucherer’s decision to dispose of the closely held family business took the industry by surprise partly because of the intense secrecy surrounding himself and the two watchmakers, whose histories have been closely entwined for decades,” writes Andy Hoffman of the Sydney Morning Herald.
“By buying Bucherer, Rolex is giving itself a major presence in consumer sales for the first time, a strategic shift from reliance on external distributors. The only store in the world currently owned and operated by Rolex is in its home city of Geneva.”
With fears that the acquisition may lead to Bucherer stores getting preferential treatment compared with other retailers, the statements from Rolex and Watches of Switzerland have been questioned.
Russ Mould, investment director of AJ Bell, told CNBC that investors were concerned that Rolex’s plans for Bucherer may be subject to change.
“Watches of Switzerland’s efforts to reassure the market that there will be no change in how Rolex allocates stock have fallen on deaf ears. This is what Rolex might have promised now, but that could easily change in the future,” Bell said.
“Theoretically, it [Rolex] could use Bucherer as its channel to sell and not have to bother with other authorised dealers such as Watches of Switzerland.
“It’s worth noting that Watches of Switzerland has been a favourite stock among many mid-cap fund managers. They will have to look hard at the Bucherer announcement and decide if it radically changes the investment case.”
Rolex chose Bucherer as its partner for the certified second-hand program, which launched earlier this year.
More reading
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