The world’s number-one watch brand has bought the world’s number-one watch retailer, for an undisclosed sum.
In a move that has shocked many in the industry, Rolex said in a statement that the deal is intended to “preserve the long-standing relationship between the two companies” and perpetuate their “shared history.”
Rolex said: “Following the choice made by Jörg Bucherer [chairman of the board of directors], in the absence of direct descendants, to sell his company’s business, Rolex has decided to acquire the watch retailer, which was until now an independent entity.”
Ties between the two brands, family-owned watch and jewellery retailer Bucherer and Geneva-based watch brand Rolex, go back over 90 years.
The son of the founder, Ernst Bucherer, entered into a partnership with Hans Wilsdorf, the founder of Rolex, in 1924, adding the watch brand – which at the time was barely established – to the Bucherer range. And to this day, Rolex remains Bucherer’s most important partner.
Jörg Bucherer, the last person to have worked with and known Wilsdorf, will stay on as honorary president of the group.
Who owns Bucherer?
Bucherer has been under the stewardship of the Bucherer family for three generations. Its headquarters remain in Lucerne, where its first store opened in 1888, to this day. It currently employs over 2,400 staff, with a footprint spanning over 100 sales outlets globally.
Jean-Philippe Bertschy, an analyst with Vontobel Holding, puts Bucherer’s annual sales at about 2bn Swiss Francs ($3.5bn).
Who owns Rolex?
Rolex is notoriously secretive about its ownership structure. While the not-for-profit organisation, the Hans Wilsdorf Foundation, is the principal shareholder of Rolex, the actual operational ownership of the company is vested in several private entities.
These collective entities are referred to as the Rolex Watch Group, which comprises various subsidiaries and affiliates involved in the production, distribution and marketing of Rolex.
Under Swiss law, Rolex as a non-profit is not obliged to publicly disclose financial information and does not have to pay taxes on its profits as a company.
There are estimates that Rolex made $13 billion in revenue in 2021, with whispers in the industry that Rolex, as a corporate entity, has so much cash stuffed away that it could operate for years without any sales!
Details of the deal
Rolex (which also owns watch brand Tudor) said Bucherer will keep its name and continue to operate independently. And the Group’s management team will remain unchanged.
Its integration into the Rolex group will be effective once the competition authorities have approved the takeover transaction. And the collaboration between Rolex and the other official retailers in its sales network will remain unchanged.
Rolex said: “For more than 90 years, the two businesses have worked alongside one another and have each contributed to the other’s achievements and growth.
Today, Rolex stands as one of the leaders of the Swiss luxury watchmaking sector. Bucherer has become an internationally renowned multi-brand retailer, with stores located in Switzerland, the United States, England, Germany, France, Denmark and Austria.
The Rolex group is convinced that this acquisition is 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.”
Of Bucherer’s 100 sales outlets worldwide, 53 distribute the Rolex brand and 48 distribute the Tudor brand. The watch retailer is also an official after-sales service centre for both brands.
What does the acquisition mean for the industry?
One industry expert has called the move “genius” describing the deal as a “strategic masterstroke,” with the deal offering significant synergies for both brands, with far-reaching implications for competitors, in an already highly competitive marketplace.
Rolex will have unparalleled access to Bucherer’s extensive global distribution channels, in addition to important client data. The acquisition will also strengthen its newly launched Rolex Certified Pre-Owned Program (CPO), as Bucherer owns Tourneau, a US pre-owned and new, multi-brand retailer.
But, unsurprisingly, news of the deal caused retail competitor Watches of Switzerland’s share price to plummet on Friday, down 30% initially, which wiped half a billion pounds off the group’s market value.
As the third largest seller of Rolex, industry analysts have questioned its future partnership, now Rolex will operate as a retailer for the first time.
But Watches of Switzerland have been quick to release a statement to reassure the markets, saying the acquisition is not strategic on behalf of Rolex, but rather about dealing with the issue of succession at the family-operated Bucherer. This has been backed up by Rolex, who says it will continue to operate independently and sell other brands.
Only time will tell though…
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