Rolex’s Acquisition of Bucherer Causes Shares to Plummet

Shares of Watches of Switzerland Group saw a significant drop of up to 29% in early trading as a result of Rolex’s agreement to acquire watch retailer Bucherer. This deal, which allows Rolex to gain greater control over the way its watches are sold, led London-listed luxury-watch retailer’s shares to fall to 515.50 pence, down 178.0 pence or 26%. Earlier in the session, the shares had fallen even further to 495.40 pence.

Watches of Switzerland released a statement on Friday acknowledging the deal, stating that it is a “best-judged reaction” to the succession challenges faced by Bucherer. The company highlighted that Jorg G Bucherer, the current owner, is 86 years old and has no family successor. Importantly, Watches of Switzerland also emphasized that the acquisition will not result in any changes to Rolex’s product allocation processes or distribution developments.

According to analysts at Shore Capital, the deal is unlikely to have an immediate impact on Watches of Switzerland. This is mainly due to the limited geographical overlap between Bucherer and the London-listed company. While Bucherer stores are primarily located in continental Europe, Watches of Switzerland stores are mainly found in the U.K. and U.S.

As of July 30, Watches of Switzerland boasted a total of 202 showrooms across the U.K., U.S., and Europe. This includes 87 dedicated mono-brand boutiques in partnership with luxury watch brands, including Rolex.

Bucherer, on the other hand, operates over 100 stores worldwide with 53 currently selling Rolex watches. Additionally, Bucherer manages 48 stores that distribute Tudor watches, which are owned by Rolex.

Overall, this acquisition marks a significant development within the luxury watch industry. Only time will tell what impact it will have on both Watches of Switzerland and Bucherer.