Rolex, the world’s largest luxury watchmaker, is buying watch retailer, Bucherer, in a bid to increase its consumer retail footprint, reported Bloomberg on Thursday.
Bucherer is one of Europe’s largest watch retailers and owner of the Tourneau chain in the United States.
The move will give Rolex control of Bucherer’s more than 100 stores worldwide. It will also give the brand a direct line to its customers along with more control and oversight for distribution, allocation, as well as pricing for pre-owned timepieces, added the Bloomberg report.
Rolex currently owns and operates one store, located in Geneva.
Investment in Rolex, Patek watches exceeds S&P gains over five years: report
The boutiques are expected to continue to operate independently, keep the Bucherer name and sell other watch brands. However, the move raised investors’ concerns about a possible squeeze on supply to other stores, added the report.
Shares of Watches of Switzerland Group, the biggest Rolex dealer in the UK, lost more than a quarter of their value, reported Reuters on Friday.
Rolex said the decision to buy Bucherer was made after the family controlling the retailer decided to sell, and it said relationships with existing retail partners won’t change, added Bloomberg.
Rolex entered the pre-owned watch market last year in a surprise move, in an effort to certify its pre-owned timepieces through retailers like Bucherer.
Luxury Swiss watchmaker Rolex looks to accelerate production to meet rising demand
“At first glance, this is shocking for all of the other Rolex official dealers because Rolex has always said it is committed to independent retail distribution and has no desire to do own retail,” Jon Cox, head of Swiss equities at Kepler Cheuvreux, was quoted by Bloomberg as saying.
Demand for Rolex’s most popular models, such as the Daytona, GMT and Submariner dive watch, far outstrips supply even though the company makes more than 1 million timepieces per year and generates more than 9 billion francs in sales, further added the report.
Customers at authorised dealers are often waitlisted, that can last months and even years for the most popular models.
Luxury watchmakers face soaring demand, but there isn’t enough time
Rolex timepieces dominate the second-hand market, accounting for more watches bought and sold by value than any other brand.
Capturing the retail market and giving Rolex and its lower-priced sister brand Tudor a larger presence in stores is a “game changer,” Oliver Mueller, head of Switzerland’s LuxeConsult, an industry consultant, was quoted by Bloomberg as saying.
On Friday, a separate report by Bloomberg reported that prices for the most popular higher-end watches from Rolex and Patek Philippe have been consistently falling over the past month, even as mid-tier timepieces from brands like Cartier outperformed.
The Bloomberg Subdial Watch Index, which tracks prices for the 50 most traded watches on the secondary market by value, declined by 1.1% in a month, added the report.
Rolex Daytona’s prices exceed expectations after company debuts new model
After an unprecedented surge during the pandemic, prices for the most hyped pre-owned models from Rolex, Patek and Audemars Piguet began dropping sharply in March 2022 due to higher interest rates, slowing economies and the crash in cryptocurrency values.
Comments
Comments are closed for this article.