Breaking News: Rolex Acquires Bucherer

Not being hyperbolic, but that could be an industry changing move. That means they also now own Tourneau. Will be interesting to see how this unfolds. Way to early to speculate.

Full statement:

https://usa.watchpro.com/rolex-buys-bucherer-the-statement-from-rolex-in-full/

This is mine blowing. I’m going to be so interested to see how this changes things. They obviously want more control over the market. 🧐🤨

Might be bad news for at least some of their current ADs

I used to be a European luxury company equity analyst and I can honestly say that this was something that I never would have envisioned happening. I had always assumed that Rolex didn't really want to be involved in the grubbiness of direct retail but that shows you how much I know.

Given the experience of other brands in direct retail, there's definitely a learning curve that they're going to have to navigate.

Agreed. There is an outside chance they truly let it operate independently, while still expanding their distribution channel.

Incredibly curious to know the rationale for this acquisition. I would have LOVED to be a fly on the wall in the Rolex boardroom to understand the reason behind this deal.

Top of mind would be:

1. Hedge against brand positioning at the point of retail distribution. Acquiring the biggest AD could help ensure that the Rolex brand remains prominent in the retail store, even as the likes of Patek and AP continue to be sold in the same store.

2. To improve consumer’s access to Rolex watches, ensuring that the AD is selling direct to consumers and not to resellers. Although I think this is a benefit of the acquisition, I don’t think this would have been the primary motivation for acquiring Bucherer.

3. Branding and physical points of interaction with consumers. Acquiring Bucherer immediately gives Rolex 100+ stores in which they can interact with their customers directly. Think of Apple Store experiences that Bucherer can now enable, further extending the branding and marketing machine that is Rolex.

I believe it’s more likely that it’s a mix of reason #1 and #3. Reason #2, like I said above, is a benefit of the acquisition, but likely isn’t the key driver.

Indeed! I find this move incredibly interesting! Maybe taking a page from other luxury retailers, like Hermes. And let’s not forget the Apple Store experiences that luxury brands strive to imitate.

The press release suggests that they are going to let it operate independently but that's a bit off PR fluff. Given how insanely top down the decision making seems to be at Rolex, I'd be more surprised if they didn't try to meddle. And if they do, they're going to find it a rather less profitable and a rather more customer focused business.

That's probably what's going through their heads. I can imagine some Rolex executive looking at the Authorized Dealers and asking why those guys get to capture 25% additional margins.

But retail is a rather public customer facing business and Rolex is about as secretive as they come, so I actually wonder if the two cultures can meld effectively.

Right now, Bucherer can claim to customers that they know nothing of Rolex's supply issues. After all, it's a separate company! But will customers accept the same logic when they're underneath the same banner? I don't know.

The more I think about it, the less I think of the strategic logic.

Last year Rolex announced its implementation in Bulle (Canton of Fribourg, next to Gruyères) moreover it will lead to the creation of 2000 jobs. They definitely have a Big Plan.

On Swiss Media, the local population of Bulle and it’s municipality “fear” demographic and financial spillovers that could impact the region.

Bucherer and Bulle might be just the beginning :)

Could this be a problem for them with the whole wait list thing?

They had a sort of degree of separation from the issues consumers have with the wait list and could sort of blame the execution of how in-demand watches were individually allocated on a wide range of different entities. But owning at least some retail fronts could be allowing this criticism to be more focused on them.

Or are they so firmly entrenched as top dog, it ultimately won't matter on the macro level?

The Bulle move was a production capacity expansion. That I totally got. It's a big expansion but ultimately, they are hiring and training "Rolex" people. The chances for cultural mismatch are pretty low and they're not expanding into outside business lines.

Bucherer is a different beast. It's a different business with different margins and a (necessarily) different culture. it's much higher risk as these things go.

But there's definitely a "Big Plan" as you say, inscrutable as it may be!

This may apropos of nothing, but the Rolex/Tudor boutique in New York is already run under the Butcherer née Tourneau umbrella.

Is the writing on the wall for other Rolex ADs? Other brands are going boutique only. Is this a move in that direction?

So this means either two things

1) More Rolex are gonna be available

Or

2) More Rolex’s are gonna be available but still too damn expensive

Or

3) Less Rolex are going to be available because they're still restricting retail supply and also no more gray market/back door sales.

But I hope 1 or even 2 is correct, more supply available to everyone please.

My guess is Buchererolex used on future dials - just above Certified Boutique Purchase.

So will the Bucherer brand now start selling for a premium instead of a 70% discount?

It will be interesting to see what they do with the Bucherer watch brand.

I was in Manhattan a while back and ducked into a smaller independent watch store to check out Hamiltons and other watches more my speed. Didn't have time to go to the Tourneau/Bucherer store down the street (and wasn't sure I would have been allowed, looking the sweaty tourist that I was that day). The guys in the smaller shop were great and had a good talk about the watch industry - me being a novice. They told me a story that may show the relationship Bucherer now has with Rolex, but that may be changing. They knew of a customer who just happened to drop in that Bucherer shop the day a Rolex representative was visiting their boutique. He asked whether they had a Daytona - because the Rolex guy was there, they had to admit they had one and had to sell it to the lucky guy, even though they apparently had a waiting list and he wasn't on it. I can't say I know how Bucherer works, but Rolex may be interested, at least, in shutting down these waiting lists.

But wondering how this may impact the smaller Mom & Pop ADs, like the one in my smaller city - they seem to only have Tudor when I've been there lately and no Rolex at all. If they are handing out Rolex first-come-first-serve at Bucherer, will there be even less supply at the smaller ADs?

Hmm.. perhaps they’re thinking about direct to consumer?

I have a feeling Tourneau will be killed off, or made into an overpriced brand

I guess this means their trying to improve their production and customer/boutique experience?

If you want to conquer the entire Swiss watch world you'll at some point have to go for the retailers... and competitors. I am convinced Rolex won't stop until 95% of Swiss watch related retail revenue belongs to their group and "luxury watch" becomes synonymous with the word "Rolex".

I’m sure is like any company that wants to be in control over small or big competitors. It’s just the power of making that decision that will only benefit you! Remember there is other more expensive brand than Rolex, but Rolex market is bigger and one of the most have watch in the world. if you take in consideration in 2021 there was an estimate of 56 million of Millionaires that’s a 70% grow from 2014. That means each one of them will like to purchase or already owns 1 or 3 Rolex before any other brand. Rolex has one or perhaps the best Retail advertising in the market. All strategies to be the must wanted watch. So if they owned other watches companies they will still number 1 in the market! That’s my opinion.

Wow, I'm shocked, cause Bucherer sell all sort of brands and I wonder if and who to add or remove on its roster. I was call by Bucherer a week ago for my new Kermit so maybe more Rolex might be available, not that I need any more Rolex but for others.

As a hick who hasnt seen a city in years, what is the apple store experience?

Good to know that now there will be more stores where I can be denied a watch which I can’t afford in the first place. 👍

Do they have enough stock?

I think they’re pretty much almost there (conquering); fact is that they’ve been pulling along the entire Swiss watch industry for a while now. Stroke of genius that wholesale purchases of all those other brands watches = even more profit for them from any competitor sales through Bucherer, likely solidifying that position even further.