Rolex snaps up luxury retailer Bucherer – and Watches of Switzerland sees its share price fall 20%

Shares of Swiss Watch Group tumbled on Friday after news that Rolex had bought luxury retailer Bucherer.

The acquisition announcement left investors concerned that Rolex is planning a long-term shift away from using authorized retail sales partners and selling directly to wealthy buyers.

Such an agreement could greatly affect the trade of Swiss Watches, although the London-based company insisted that the agreement would not entail a change in Rolex’s “product allocation or distribution development processes”.

Bucherer is a watch and jewelery retailer with more than 100 outlets worldwide, including seven in major UK shopping destinations such as Selfridges on Oxford Street and the Royal Opera House in Covent Garden.

His relationship with Rolex dates back almost a century, when Ernst Bucherer, son of founder Carl Friedrich, struck a deal with Rolex co-founder Hans Wilsdorf for the company to become a major retail partner of the watchmaker.

In addition to selling Rolex and Tudor watches, the Lausanne-based firm offers an after-sales service center and watch repair shops.

Rolex said Jorg G. Bucherer, Ernst’s nephew and Carl Friedrich’s grandson, decided to sell the business for an undisclosed amount to found a charitable foundation.

It added that the acquisition was “the best solution not only for its own brands but also for all associated watch and jewelery brands, as well as for all employees of the Bucherer Group.”

According to Swiss Watches, Rolex bosses confirmed that they were not making a “strategic move into retail” and that they would have no “operational involvement” in the Bucherer business.

But despite this calm, Swiss Watches Group Shares it fell 20 percent, or 140 pence, to 553.5 pence just before 3 p.m. on Friday.

Russ Mould, AJ Bell’s chief investment officer, said: ‘There has been a trend among a number of product manufacturers, including large shoe companies, to sell direct to consumer.

‘By doing so, they learn more about customer preferences and make more margin, as they can cut out middlemen for these direct sales.

‘Imagine that happening with Rolex. In theory, you could use Bucherer as a sales channel and not have to worry about other authorized dealers, such as Relojes de Suiza.’

The disclosure of the Bucherer acquisition comes a fortnight after Watches of Switzerland reported a slight drop in summer sales following weaker performance in the UK, where trading was hit by the timing of watch deliveries. the products.

Chief executive Brian Duffy has also blamed the government’s abolition of VAT-free shopping for scaring international tourists from Britain to other major European cities.

He has joined hundreds of other British business leaders in supporting the Daily Mail’s campaign to have the “tourist tax” repealed.