After its shares plunged following the news that Rolex was purchasing manufacturer and retailer Bucherer, Watches of Switzerland issued a statement that said it doesn’t anticipate Rolex becoming a rival retailer.
After speaking to Rolex management, Watches of Switzerland execs were convinced “this is not a strategic move into retail by Rolex,” the statement said.
“There will be no operational involvement by Rolex in the Bucherer business,” the statement added. “Rolex will appoint nonexecutive board members.… There will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition.”
Rolex made similar comments when it announced it was buying Bucherer, saying its relationship with other multi-brand retailers will “remain unchanged.”
Bucherer purchased the Tourneau watch company in 2018. It owns 100 retail outlets in the United States, Switzerland, England, Germany, France, Denmark, and Austria.
Watches of Switzerland said the sale to Rolex was made because Bucherer chairman and owner Jörg Bucherer “is 86 years old and…has no family succession, and his wishes are to form a legacy foundation with the proceeds of this transaction.”
It noted that Bucherer was one of Rolex’s largest global partners, as is Watches of Switzerland. Rolex accounts for about half of Watches of Switzerland’s sales.
Despite this, Bloomberg estimated that Watches of Switzerland lost $500 million in market capitalization following the Rolex/Bucherer announcement, with its stock falling as much as 30%.
Russ Mould, investment director at online broker AJ Bell, told CNBC, “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.…Theoretically {Rolex] could use Bucherer as its channel to sell and not have to bother with other authorized dealers, such as Watches of Switzerland.”
(Photo courtesy of Watches of Switzerland)
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