Watches of Switzerland down sharply on the London Stock Exchange as the market fears the spillover to the British watch retailer from the acquisition of Bucherer and its network of stores by Rolex, one of its main suppliers announced today.
Watches of Switzerland shares fell by 11% at 27,3 pence around 503,75, by far the worst of the Stoxx Europe 600 index, while the FTSE 100 index rose by 0,34%.
Soothing messages aren't helping the title
The clarification by the British company that no changes are expected to its Rolex watch distribution agreements has so far been of no avail. To try to calm the waters, in a statement from the Stock Exchange, Watches explained that the 86-year-old Jorg Bucherer, grandson of the founder, has no heirs and therefore decided to sell the company to Rolex with whom he has a long-standing relationship. “This is not a strategic move by Rolex in retail, but only a reaction to Bucherer's succession problems”, “there will be no Rolex involvement in the Bucherer business” and “there will be no changes to the distribution processes of Rolex following the acquisition”, the British group is keen to clarify, underlining that it has received confirmation in this sense “at the highest levels” from Rolex's management.
The details of the Rolex-Bucherer operation
In this morning's announcement Rolex announced that it has taken over Bucherer, global giant among multi-brand watch retailers. Bucherer is a Swiss family company founded in 1888 and present with around 100 shop windows around the world: 17 in Switzerland, 10 in Germany, one in Vienna, one in Copenhagen, six in London, one in Paris (the largest watch and jewels of the world) and, with the Torneau brand, controls another 32 in the United States. To these must be added many other single-brand boutiques and sales points of Swiss Lion AG.
The acquisition was undertaken, Rolex informs, as a consequence of the fact that, in the absence of heirs, Jörg Bucherer decided to sell the company, with the belief that this would have been the best solution for his brands (including Tudor). , but also for all the other brands (both watches and jewellery) on sale in the many multi-brand stores and for retailer employees. Rolex's collaboration with Bucherer dates back to 1924 and, currently, the models of the house of the crown are sold in 53 stores in the Bucherer galaxy, while those of Tudor are present in 43.
Bucherer will keep its name and remain independent
The Bucherer chain has more than 100 points of sale worldwide. Rolex said Bucherer will keep its name and continue to operate independently. The integration of Bucherer into Rolex is also subject to the approval of the competition authorities.
Il Watches of Switzerland groupd is the UK's largest luxury watch retailer and also has a presence in the US and Europe. As of July 30, 2023, the group had a total of 202 points of sale, including 87 single-brand boutiques in collaboration with Rolex, Omega, Tag Heuer, Breitling, Audemars Piguet, Grand Seiko, Bulgari. Moreover, Shore Capital analysts do not expect short-term repercussions from the operation which also opens the way for Rolex to expand direct sales. "With Bucherer's extensive retail network, Rolex has the opportunity to access a larger consumer market and directly control a greater portion of its distribution channels," note the analyst, also noting that there is limited geographical overlap between Bucherer and Watches of Switzerland, given that Bucherer's stores are mostly located in continental Europe, while those of the British company are mainly located in the United Kingdom and the United States United.
