Rolex

Rolex's Acquisition of Bucherer Signals a New Era for Luxury Watches

Kitai

Aug 30, 2023 — 3 min read

IMAGE: Bucherer

Three generations of Buchererers built an exclusive watch and jewelry retailer that sold expensive timepieces and glittering gems to the world's rich and famous for more than a century. The Swiss billionaire behind the eponymous luxury boutiques, Chairman Jörg G. Bucherer, has agreed to sell Bucherer AG to Rolex in a move that has stunned the watch retailing world.

This has recently become the reality in fine watchmaking with Rolex's acquisition of Bucherer on August 24 - an event that will shape the industry for years to come. For some this serves as a warning; a reminder that staying static is not an option. Admittedly “genius” is frequently overused, yet in this instance, it is certainly applicable for Rolex – global leader in luxury watches – to purchase Bucherer, the world’s biggest watch retailer.

Neither the companies nor Jean-Philippe Bertschy of Vontobel Holding AG revealed the particulars of their agreement, and neither firm publishes financial statements, making it hard to guess the price.

Estimates by analysts put yearly sales at Bucherer’s greater than 100 stores at roughly 2 billion Swiss francs ($2.3 billion). This has led to an estimated enterprise value of around 4 billion Swiss francs with a contribution of around 5% to Rolex's sales.

The decision by the 88 year old Bucherer to part ways with his near-century held family company astonished many due to the exclusion surrounding both watchmakers, who have had a deep relationship for decades. Rolex declared in a statement about the contract that his decision was driven by "the absence of direct descendants." By buying Bucherer, Rolex is awarding itself entry into consumer sales for the first time, transitioning from its prior reliance on external distributors. Its only store that is owned and run directly by Rolex is located in its native city of Geneva.

Watches of Switzerland Group Stock, $WOSG, saw their market value decline by a significant portion on Friday 25th of august 2023, down by 23% during the month of August, as a consequence of Rolex's decision to purchase one of the most prestigious Swiss watch retailers. Bucherer, known for having 100 outlets dispersed throughout Europe and North America, will add to Rolex's impressive collection of business subsidiaries.

**Watches of Switzerland Group PLCFollowingShare**

In a statement, Watches of Switzerland noted that the decision by Rolex was not strategic but rather in response to succession difficulties at Bucherer, as 86-year-old Jorg Bucherer, the grandson of the founder, does not have any descendants. The company added that their comments were verified at both the Geneva headquarters and also at higher levels within Rolex UK and US.

HSBC has downgraded Watches of Switzerland's rating from buy to hold due to the fact that Rolex accounts for more than half of its business. Erwan Rambourg, HSBC’s analyst warned of a potentially detrimental scenario - the possibility that Rolex could allocate their limited supply of watches to their newly acquired Bucherer group, as well as limiting Watches of Switzerland’s ability to open new locations.

Rolex announced that their agreement with Bucherer is the most advantageous option, not just for themselves, but also for the entire sector. They asserted that Bucherer will still manage independently.

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