What Rolex Acquiring Bucherer Means for the Future

Bucherer’s family name is one of the biggest and most significant in watch history. The multibrand retailer, Bucherer AG, was founded in 1888 and remains the biggest watch retailer in Europe, and the watch manufacturer Carl F. Bucherer is a haute horology watchmaking house renowned for its complicated chronographs and tourbillions. Since the company’s inception in Lucerne, Switzerland, Bucherer has been entirely family-owned and operated generation after generation after generation, until now – Rolex has announced its acquisition of Bucherer in its entirety.

It’s impossible to talk about Bucherer’s history or success as a retailer without mentioning the Rolex company. The same is true vice versa – experts estimate that Bucherer accounts for nearly 8% of Rolex’s total annual sales. Rolex has always been a flagship retail brand for the Bucherer company; Ernst Bucherer became closely associated with Rolex founder Hans Wilsdorf as early as 1924, and the two brands have been essentially inseparable since then.

There are over 100 Bucherer storefronts around the world; amongst those, 53 are Rolex dealers and 48 are Tudor dealers. In 2021, Bucherer had acquired Tourneau, the largest watch retailer in the United States, substantially increasing Bucherer’s presence in the North American market.

There is no precedent for this move – Rolex’s aquisition of Bucherer, and subsequently Tourneau, is absolutely unparalleled in scale.

Bucherer will keep its name and continue to independently run its business. The Group’s management team will remain unchanged.”

Rolex Press Release

Now, Rolex will own storefronts that retail brands like Vacheron Constantin, Cartier, Jaeger-LeCoultre, and countless more, and will therefore make profit on the sales of every timepiece sold at Bucherer and Tourneau stores. Seemingly, Rolex’s actions may walk along a very fine line for what is acceptable to other brands. It’s unlikely that Rolex would act drastically – doing so may result in any of the 30+ watch brands available in Bucherer/Tourneau stores to end their retail contracts.

While Rolex has an extensive network of authorized dealers and storefronts, the only Rolex store that is fully owned and operated by the Rolex company stands in Geneva, Switzerland. This acquisition would signal an ongoing effort from Rolex to control the luxury Swiss watch market across all mediums.

Succession

Rolex claims that this move is for no other reason than to preserve the partnership between Bucherer and Rolex. The retailer’s owner, Jörg G. Bucherer, is 88 years old and has no direct descendants to take over the Bucherer group. For nearly the last 100 years, Rolex has always been prioritized in the Bucherer network, and this move from the two brands ensures that their relationship will endure and continue benefiting both parties.

For now, Rolex says that Jörg G. Bucherer would stay on as the Bucherer group’s honorary president, but presumably, Rolex would be highly involved in selecting the retailer’s next leader as Jörg G. Bucherer steps down in the coming years. The Bucherer company has always been family-owned and operated and entirely discreet – to this day, not much is known about Jörg G. Bucherer or the company itself. While we don’t know who has been eyed to take over the head position at Bucherer, it’s reasonable to assume Rolex leadership has approached executives from the Bucherer company and within Rolex themselves to step up in the coming years. This acquisition guarantees that the future leadership of Bucherer prioritizes Rolex sales just as much – if not more so – as the outgoing leadership has for decades.

A Shift In The Market

Rolex has denied that this acquisition is a “strategic move” into the retail market, but the truthfulness in that statement will only be uncovered with time. As expected, investors were quick to act; the following morning, Watches of Switzerland shares dipped 29% and settled at a 20% plunge, closing the stock’s worst day ever. The next day, the retailer released a statement aiming to quell investors’ worries, emphasizing that the acquisition was solely to address Bucherer SA’s succession issue.

“There will be no operational involvement by Rolex in the Bucherer business. Rolex will appoint non-executive Board members. There will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition.”

Watches of Switzerland Statement

Watches of Switzerland’s efforts were essentially disregarded – the effects of the acquisition on the luxury watch market has been monumental and the lasting impact will likely be significant moving forward. Watches of Switzerland is one of many retailers with a high dependency on Rolex – the brand makes up nearly 60% of the retailer’s annual sales – so this move will likely cause the retailer to accelerate and grow their partnerships with major brands Cartier and Omega.

Rolex has always had an unwavering position at the pinnacle of the Swiss watchmaking market, holding nearly 30 percent of market share in 2021. As Rolex’s “sister brand” Tudor continues to rise in their own market share, brands are rightfully worried about Rolex’s increasing strength over authorized dealers and the entirety of the luxury Swiss market. Other luxury watchmakers will be watching Rolex’s moves closely, especially those looking to compete for Rolex’s crown. Swatch-owned Omega and Richemont-brand Cartier have experienced steady growth in recent years, but they may look to follow suit – a strong move into retail could be on the horizon for both brands, in addition to expanding their authorized dealer networks and their presence in the North American market.

Rolex Forges a New Path

Earlier this year, Rolex announced its Certified Pre-Owned program in partnership with Bucherer locations in Switzerland, Austria, Germany, France, Denmark and the UK. Rolex has stayed indirectly involved in the grey market for years, turning a blind eye to exploitative authorized dealers and effectively enabling bad actors to keep the ‘Rolex bubble’ intact and retain the image of exclusivity of a Rolex timepiece.

This has undoubtedly hurt the brand’s good-will with loyal consumers, especially in recent years as demand has surged and the luxury segment has trended upmarket. Rolex is infamous for inflated secondary market prices, with many of the most desirable references marked-up at multiples of their retail prices. In this CPO program, Rolex plans to sell authenticated second-hand timepieces with a warranty from Rolex themselves. In a market full of sneaky sellers and high-quality replicas, this program will be the safest way to immediately purchase a pre-owned Rolex. Now, they’ll be able to increase their bottom line and raise profits, all without much impact on pre-owned prices – and perhaps more importantly, they’ll increase their effective control over the broader Rolex market.

For a company of Rolex’s stature, their business strategy has been unorthodox – their decades-old strategy to distribute watches through independently owned and operated authorized dealers rather than having a direct-to-consumer model has technically hurt their profits, but never enough to warrant a significant strategic change. Now, we witness Rolex pull back on their authorized dealer network, with now just about 1,800 stores worldwide with about 300 in the United States – the lowest number in years.

The acquisition and firm integration of Bucherer into Rolex’s operations is yet another indication of a change in Rolex’s long-term strategy. Rolex will finally have a significant presence in the retail space, allowing them to exert greater control over distribution and retail operations. This could indicate a lasting change in market strategy in which Rolex may aim to operate a significant portion of their retail dealers in addition to having a true influence over the secondary market.