Rolex snaps up luxury retailer Bucherer – and Watches of Switzerland sees its share price
Rolex snaps up luxury retailer Bucherer – and Watches of Switzerland sees its share price fall 20%
- Bucherer is a watch and jewellery retailer with more than 100 outlets worldwide
- Watches of Switzerland Group is a prominent authorised retail partner for Rolex
Watches of Switzerland Group shares tumbled on Friday following news that Rolex had bought luxury retailer Bucherer.
The announcement of the acquisition left investors worried that Rolex is planning a long-term shift away from using authorised partners for retail sales to instead sell directly to wealthy shoppers.
Such a deal could make a massive dent in Watches of Switzerland’s trade, although the London-based company insisted the deal would not see a change to Rolex’s ‘processes of product allocation or distribution developments.’
Slump: Watches of Switzerland Group shares plummeted on Friday after watchmaker Rolex revealed it had bought luxury retailer Bucherer
Bucherer is a watch and jewellery retailer with more than 100 outlets worldwide, including seven in prime UK shopping destinations, such as Selfridges on Oxford Street and the Royal Opera House in Covent Garden.
Its relationship with Rolex goes back almost a century when Ernst Bucherer, son of founder Carl Friedrich, struck an agreement with Rolex co-founder Hans Wilsdorf for the company to become a major retail partner for the watchmaker.
Apart from selling Rolex and Tudor timepieces, the Lausanne-headquartered firm provides an after-sales service centre and watch repair workshops.
Rolex said Jorg G. Bucherer, nephew of Ernst and grandson of Carl Friedrich, has decided to sell the business for an undisclosed amount in order to found a charitable foundation.
It added the takeover was ‘the best solution not only for its own brands but also for all the watch and jewellery partner brands, as well as for all the employees of the Bucherer Group.’
According to Watches of Switzerland, Rolex bosses confirmed they were not making a ‘strategic move into retail’ and would have no ‘operational involvement’ in the Bucherer business.
But despite this reassurance, Watches of Switzerland Group shares plunged 20 per cent, or 140p, to 553.5p just before 3pm on Friday.
Russ Mould, investment director at AJ Bell, said: ‘There has been a trend among various product manufacturers, including the big trainer companies, to sell direct to the consumer.
‘In doing so, they learn more about customer preferences and make more margin as they can cut out the middleman for these direct sales.
‘Imagine that happening with Rolex. Theoretically, it could use Bucherer as its channel to sell and not have to bother with other authorised dealers such as Watches of Switzerland.’
The revelation of the Bucherer takeover comes about a fortnight after Watches of Switzerland reported a slight dip in summer sales following a weaker performance in the UK, where trade was impacted by the timing of product deliveries.
Chief executive Brian Duffy has also blamed the Government’s abolition of VAT-free shopping for driving away international tourists from Britain to other prominent European cities.
He has joined hundreds of other leading British business leaders in supporting the Daily Mail’s campaign for the ‘tourist tax’ to be overturned.