The fallout from the Rolex/Bucherer deal.
Breakingviews - Rolex’s deal is ticking time bomb for retailers
Watches of Switzerland is having a bad time. Shares in the London-listed luxury retailer slumped on Friday morning after Rolex, one of its major suppliers, bought Swiss store chain Bucherer for an undisclosed sum. Investors fear Rolex might start selling through its own shops. In the short term, these concerns look overstated, but Rolex’s move may still have called time on WoS’s business model.
Rolex sales account for 50% of sales at Watches of Switzerland. Guess what happened when Rolex announced their acquisition of Bucherer?
[Watches of Switzerland’s] shares lost more than 20% of their value on Friday morning. That prompted WoS to put out an odd statement containing a stronger denial of Rolex’s alleged direct-sales strategy than the Swiss group’s own communiqué.
I didn’t participate in @BillableHours post yesterday, but the entire time I was keeping track of the news, I couldn’t help but think that any AD in the same town as a Bucherer is now a direct competitor of Rolex.
Watch collecting Californian living in NYC. A Seiko and Timex guy struggling to move upmarket.
Yes its going to really shake things up. Plus what happens to Rolex competitors at Bucherer? Moved to the basement?
interesting. makes sense that WoS would make such a statement that Rolex has not communicated to them a direct sales strategy through their acquisition of Bucherer stores. but i wonder how much of this is fact or just speculation by WoS. we won’t know until we see it play out in Rolex’s execution of this strategy.
but definitely intriguing and puts WoS in a tricky position, with 50% of their sales driven by Rolex. i would imagine WoS executives are cozying up to all the other brands now to strengthen those partnerships and position themselves as their partner for retail sales, maybe even trying to get more allocations from those brands (Patek? AP?).
those other brands won’t like the fact that part of every watch they sell through Bucherer will now help fund Rolex’s ever growing war chest. i’m sure those other brands will also be considering their partnership and positioning within Bucherer stores. WoS executives should definitely swoop in now to strengthen those brand partnerships.
WoS seems like they will lose Rolex/Tudor if they are in the same market, but who knows?
Re the second point; Most brands cannot make the move HFW made. Commercial real estate is a massive gamble many are staying away from right now.
Brands want Rolex in the store because they know it drives sales to other brands. I don’t see many pulling out, because they want to be adjacent and the alternative option.
interesting. makes sense that WoS would make such a statement that Rolex has not communicated to them a direct sales strategy through their acquisition of Bucherer stores. but i wonder how much of this is fact or just speculation by WoS. we won’t know until we see it play out in Rolex’s execution of this strategy.
but definitely intriguing and puts WoS in a tricky position, with 50% of their sales driven by Rolex. i would imagine WoS executives are cozying up to all the other brands now to strengthen those partnerships and position themselves as their partner for retail sales, maybe even trying to get more allocations from those brands (Patek? AP?).
those other brands won’t like the fact that part of every watch they sell through Bucherer will now help fund Rolex’s ever growing war chest. i’m sure those other brands will also be considering their partnership and positioning within Bucherer stores. WoS executives should definitely swoop in now to strengthen those brand partnerships.
My immediate thought was, will the Swatch Group try to go direct on their own as an entire group or will they continue to rely on their ADs and single brand boutiques?
Don’t forget Tourneau. If I were an AD I would be very anxious right now.
Don’t forget Tourneau. If I were an AD I would be very anxious right now.
Tourneau was acquired by Bucherer in the last two years or so.
Vertical integration and direct sales ala Tesla and Spaghetti Scameti. Cut out the middle man 🤣
Vertical integration and direct sales ala Tesla and Spaghetti Scameti. Cut out the middle man 🤣
@benswatchclub really is an innovator, Rolex is doing this because they are following Spaghetti Scameti.
My immediate thought was, will the Swatch Group try to go direct on their own as an entire group or will they continue to rely on their ADs and single brand boutiques?
Ooooo that’s an interesting thought! i could see Swatch group doing that. and it might provoke other groups like Richemont to do the same.
Ooooo that’s an interesting thought! i could see Swatch group doing that. and it might provoke other groups like Richemont to do the same.
If you go to the World Trade Center Oculus, Swatch already has multiple single-brand boutiques:
Longines (this is a brand boutique, I always thought it was some special space run by London Jewelers)
Swatch
Tissot
Omega (Brookfield Place)
You could conceivably replace four stores with one, just in Lower Manhattan.
They bought a very prestigious, well established distribution network, agree that local AD's should be quaking in their boots.
If you go to the World Trade Center Oculus, Swatch already has multiple single-brand boutiques:
Longines (this is a brand boutique, I always thought it was some special space run by London Jewelers)
Swatch
Tissot
Omega (Brookfield Place)
You could conceivably replace four stores with one, just in Lower Manhattan.
"Longines (this is a brand boutique, I always thought it was some special space run by London Jewelers)"
"Brand boutiques" are often run by another retailer. The Rolex/Tudor boutique is already run by Bucherer. Grand Seiko has a boutique run by Watches of Switzerland.
"Longines (this is a brand boutique, I always thought it was some special space run by London Jewelers)"
"Brand boutiques" are often run by another retailer. The Rolex/Tudor boutique is already run by Bucherer. Grand Seiko has a boutique run by Watches of Switzerland.
I asked the guys there and they said they are Longines, not London Jewelers. The SoHo GS boutique are very sanguine that they are run by WoS. Their business cards are the same as Grand Seiko business card, except their email is is WoS email address.
Tourneau was acquired by Bucherer in the last two years or so.
That’s what I meant to say, that Bucherer owns Tourneau