BREAKING NEWS: Rolex buys Bucherer

[Carguy87]

Originally Posted by Socalwatchguy

Other brands don’t have a choice…
It would take years for these brands to replace the Bucherer distribution system/footprint.


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I agree for some brands (oris, tissot, etc) but I was thinking more of Patek and VC when I made that comment. I could see both of those going boutique only, and honestly that’s the data Rolex would care the most about (I would think). I doubt they’d be overly concerned with data points from manufacturers that sell substantially less expensive watches, because those may not be the same target customer. But, anecdotally from my time here on TRF, I can say that many of the folks buying Patek and VC also buy/own Rolex, so this info could give them some great market insights into target buyers they don’t currently have.

[Corvette]

Originally Posted by Phlippe

I imagine Rolex cares a great deal about the potential market impact the flipped watches into the grey space and the safe queens which are appearing more frequently as the prices drop. As the MFG Rolex knows how many watches were made and likely floating free. The easiest way for them to control after market values of extra inventory is to change the models. We have seen it with the Sub, then the Daytona, which means the GMT is next to be updated. Historically prices go up once discounted. They can also take them out of supply of the CPO if they own the retail inventory, by saying they are to damaged to resell. The interesting play will be if they creat a new watch brand below the Tudor price point. Tudors are no longer affordable first time watches for the young millennial and gen Z watch buyers.

Rolex doesn’t need an “affordable” watch brand. Heck I’d go out on a limb and say they could do away with Tudor and be better off for it.

Rolex is no longer a “watch brand” per say, it’s an “aspirational product”. Sort of what Hermes is to purses.

If Rolex can control every aspect of the process from manufacturing to the retail of their watches, that’s an incredibly powerful position to have. Want to restrict supply? Done. Want to control pre owned values? Much easier now.

I’m very intrigued to see how this plays out in 5-10 years down the road.

[Phlippe]

I agree they don’t need an entry level price point as Rolex watches are an aspirational luxury product like you say, but the Rolex trust isn’t just about Rolex watches. If they want to put in their future AD agreement that a AD can only carry Rolex owned watch brand then they need an entry level one. Why let entry level buyers go to other brands when they can get them on the aspirational train like you say. Also, they have stopped using the term Authorized Dealer and now are pushing “Official Rolex Jeweler.” I was corrected at one of my AD this summer by a manager. Looking back now this name change was a telegraphing move they were getting into the jewelry store business. Not only is it going to be interesting to watch Rolex over the next 5-10 years but to watch what happens to the gray market if Rolex is serious about stopping the flippers.

[justcruisin]

Very interesting…my Bucherer (ex-Tourneau) in Waikiki is my go-to. BenBridge expanded their Rolex boutique just recently…interesting…

[Jawnz]

Originally Posted by justcruisin

Very interesting…my Bucherer (ex-Tourneau) in Waikiki is my go-to. BenBridge expanded their Rolex boutique just recently…interesting…

Yeah I wonder what this means. The expanded Ben Bridge is huge and roomy inside. Must mean they are keeping their Rolex privileges for the time being.


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[Greenwood_]

Originally Posted by Phlippe

Also, they have stopped using the term Authorized Dealer and now are pushing “Official Rolex Jeweler.” I was corrected at one of my AD this summer by a manager. Looking back now this name change was a telegraphing move they were getting into the jewelry store business.

Rolex have been using “Offical Rolex Jeweller” since 2000, it’s just a company specific term unlike “Authorised Dealer” which is a generic term.

It appears to be regional too, as in the UK ADs are badged as “Official Rolex Retailers”.

https://www.sec.gov/Archives/edgar/c...17946/0003.txt

[njlam]

For the major cities where there are Bucherer/Tourneau stores, why would Rolex want any other ADs to sell their watches when they make the full retail margin if they (Bucherer/Tourneau) sell them.

On the other hand, in cities/states that do not have Bucherer/Tourneau stores (like where I am, Portland, OR), it may benefit the ADs only because Rolex has no other way of distributing their watches in these areas.

Of course this all could mean Rolex will be down grading its overall AD network, however with 1MM watches produced a year, perhaps they will need AD help for a few more years.

In the short run, I view this as good news for the regional ADs, and bad news for the big city ADs. Obviously talking my position...

I wonder how this will affect national retailers like Ben Bridge? Aren't these guys one of the larger US retailers for Rolex?

[njlam]

It also very possible that Rolex just bought Bucherer because it was for sale and they did not want anyone else to buy it. It could just be a defensive move that maintains the status quo of their dominance.

[Cassian739]

Originally Posted by njlam

It also very possible that Rolex just bought Bucherer because it was for sale and they did not want anyone else to buy it. It could just be a defensive move that maintains the status quo of their dominance.

Yup

[rolexdd40yg]

Maybe they bought it because Bucherer can’t sell watches like they used to.
There is less demand.

[Halifax Daytona UK]

Rolex have bought them so they can boost/control their CPO project.

The AD will now get some dorks to buy from the CPO to help their relationship and all dorks will believe they are in a relationship with them

[RollingInTheDeep]

Originally Posted by Halifax Daytona UK

Rolex have bought them so they can boost/control their CPO project.

The AD will now get some dorks to buy from the CPO to help their relationship and all dorks will believe they are in a relationship with them

My earlier post is buried, but I am in agreement with this. Feels coordinated with the roll out of the CPO program as they will now capture secondary market share.

[russ86]

Huge news, I will assume they would start pulling licenses left and right in a few years

[MangoTree1]

Bad for flippers - good for me!

[928ktgold]

i think they still need ADs. They're going to be making more watches. You think they're going to sell them through less stores? They want a higher reputation. So only the better ADs will retain their licenses.

[-Ally-]

WOSG shares down 27% today.

:)

[JC316]

Originally Posted by -Ally-

WOSG shares down 27% today.

:)

Wow!!! You aren't lying!

[ROLEX MAN]

ROLEX is taking over 100 BUCHERS!

The Grandson of Carl F Bucher is 90 and has no descedants!

He wanted the company continue as a cooperative!

I dont believe this will change the value of The watch itself!

[MrMikee]

Originally Posted by -Ally-

WOSG shares down 27% today.

:)

WOW... just had a look myself. Wonder how this plays out with Watches of Switzerland. Is this just a market overreaction or will it trend down for awhile... Either way, not good for WOS...

[Devildog]

Originally Posted by JRell

Other than buying it for the property, prime locations, I don’t know why they would want to go into retail with online options and the security risks. Will it help their volume of sales? Otherwise are they not just losing profit margin %? I realize they will make more per watch without having to cut the AD check, but unless the plan is to go global I can’t imagine this is a large percentage of their overall sales.

That's unlikely to be how it will work.

Bucherer AG will still exist as a legal entity. Rolex SA will most likely simply acquire the shareholding in Bucherer that's currently owned by Jörg Bucherer and Bucherer AG will become a subsidiary of Rolex SA.

Its not like Rolex are going into retail directly. They're simply taking ownership of a retail operation that they happen to supply.

[S.Explorer]

Originally Posted by Cassian739

My $0.02, and I do M&A for a living.

- Rolex will leave Bucherer standalone for a looooong time and purposely try to keep the appearance of an "arms length" relationship to protect the Rolex brand.
- Timing: Rolex would likely never get another bite at the apple to acquire a retail footprint this large, and who knows who would ultimately end up as the buyer. So even though there are risks and downside, they had to do it. YOLO!
- There is ZERO chance they spent billions of dollars on Bucherer to put the revenue stream at risk by messing with existing relationships with other watch manufactures. If anything, this acquisition should give comfort to other manufacturers that Bucherer will be a stable retail partner for them to sell product for the foreseeable future. A partner that will be very focused on protecting its reputation (see below). Far worse outcome would have been for Bucherer to end up in the hands of Private Equity.
- As a part of Rolex, Bucherer won't be held to short term margin pressures, protect the reputation at all costs is the mantra.
- So Rolex will almost certainly send a direct message to SAs, through Bucherer management, for SAs to stop messing around and playing games with Rolex allocations. No more bundling, forcing you to create a spend history, etc.
- Access to Data. Rolex corporate will now have a direct pipeline into the spending habits and preferences of Watch buyers around the world, across almost every Watch brand. No other watch OEM has that. There is A LOT you can do with that much data.
- financial: yes, being able to sell direct and eliminate the AD markup in certain markets will make Rolex more money. But that's not why they did the deal, it's about controlling the distribution of their product and protecting the Rolex brand. This sends a clear message to AD's that they are not F'n around anymore. In most markets Rolex no longer needs an independent AD. Full stop.

That's a really interesting bit of insight . It's not like Rolex needs the extra money from retail sales but it's the protection of their distribution network.

Originally Posted by -Ally-

WOSG shares down 27% today.

:)

Rolex may end up buying WOSG too!

[askdanny]

A Rolex PR in Geneva has recently told me Rolex doesn’t have a problem selling watches. But the real problem lies in how those watches are sold — to whom they are sold. The AD always picked the customer. Rolex wants to bring more people into the World of Rolex and reduce resentment towards the brand. Acquiring an important distribution network would solve part of the problem by finally being able to choose the customer.

So this is great news for the average buyer who has always wanted to own a Rolex.

[ChipWong]

Originally Posted by askdanny

A Rolex PR has recently told me Rolex doesn’t have a problem selling watches. But the real problem lies in how those watches are sold — to whom they are sold. The AD always picked the customer. Rolex wants to bring more people into the World of Rolex and reduce resentment towards the brand. Acquiring an important distribution network would solve part of the problem by directly choosing the customer.

So this is great news for the average buyer who has always wanted to own a Rolex.

Hopefully people wont have to kiss the ADs ass to get a submariner or Datejust in the near future.

[RiRi]

Originally Posted by RFC

This acquisition should raise antitrust concern in the US and the EU.

I've read that there will be no integration of operations as long as it has not been cleared by the Swiss antitrust commission.

But it is a smart move, a) for data gathering, b) as a defensive play against other players / private equity and c) to better control distribution in both the short and long run.

And while they are ramping up their own production, they can sell other watches at a decent margin ... and slowly kick out brands if need be, as long as the Rolex dominance continues!

[Devildog]

Originally Posted by Cassian739

My $0.02, and I do M&A for a living.

- Rolex will leave Bucherer standalone for a looooong time and purposely try to keep the appearance of an "arms length" relationship to protect the Rolex brand.
- Timing: Rolex would likely never get another bite at the apple to acquire a retail footprint this large, and who knows who would ultimately end up as the buyer. So even though there are risks and downside, they had to do it. YOLO!
- There is ZERO chance they spent billions of dollars on Bucherer to put the revenue stream at risk by messing with existing relationships with other watch manufactures. If anything, this acquisition should give comfort to other manufacturers that Bucherer will be a stable retail partner for them to sell product for the foreseeable future. A partner that will be very focused on protecting its reputation (see below). Far worse outcome would have been for Bucherer to end up in the hands of Private Equity.
- As a part of Rolex, Bucherer won't be held to short term margin pressures, protect the reputation at all costs is the mantra.
- So Rolex will almost certainly send a direct message to SAs, through Bucherer management, for SAs to stop messing around and playing games with Rolex allocations. No more bundling, forcing you to create a spend history, etc.
- Access to Data. Rolex corporate will now have a direct pipeline into the spending habits and preferences of Watch buyers around the world, across almost every Watch brand. No other watch OEM has that. There is A LOT you can do with that much data.
- financial: yes, being able to sell direct and eliminate the AD markup in certain markets will make Rolex more money. But that's not why they did the deal, it's about controlling the distribution of their product and protecting the Rolex brand. This sends a clear message to AD's that they are not F'n around anymore. In most markets Rolex no longer needs an independent AD. Full stop.

Finally. Someone gets it

[JSCP]

We have no clue what their intention is. All speculation.

Rolex continues to surprise. I think Bucherer will become the premier Rolex dealer in the key cities in the world and opportunity to expand. They will be learning about supply ftom
other too watch companies.

The family owned Rolex Dealers are in no position to object, as they could be taken out of the network.

People will want to trade through Bucherer on the hope of being allocated a steel Daytona, and yearky new models.

The supply demand will be same. It just gives Rolex more power etc, it’s not an end user benefit at the end.

[leonardfell]

Watches of Switzerland reiterates Rolex’s line on Bucherer’s decision to sell the company, which is said to have been because its 86-year-old owner Jörg Bucherer has no direct descendants to pass the business to.

“This is the best-judged reaction to the succession challenges of Bucherer SA.” Watches of Switzerland concludes.

That statement was released at 7.45am, 15 minutes before the opening bell of the London Stock Exchange, where Watches of Switzerland shares are listed.

It does not appear to have comforted investors, which have been selling shares, diving the price down by 28% in the first hour of trading.

At the time of writing, WoSG share price of 499p is the lowest since November 2020 and down from a peak of 1470p in December 2021.

[padi56]

Originally Posted by njlam

It also very possible that Rolex just bought Bucherer because it was for sale and they did not want anyone else to buy it. It could just be a defensive move that maintains the status quo of their dominance.

Exactly that and Bucherer has had a very long association with Rolex watches for the past 50 years, and being in Switzerland where the Rolex watches are mass produced in the thousands every year.

[superspectral]

Pure speculation, but the press release IMHO almost had an apologetic tone. Perhaps Bucherer was over-leveraged and in debt. The may have overpaid for Tourneau.The increase in interest rates and overall downturn could have left them with too much inventory - bleeding cash. Rolex might be the buyer of last resort. We know that buyers and sellers have been keeping stock “in the safe” to create scarcity for high prices. If Bucherer is paying interest on inventory-the situation could be precarious. If the model of selling package deals to get a Rolex failed, Bucherer would at least significant non-Rolex stock. The other manufacturers may tolerate this temporarily because inventory liquidation would crash retail and pre owned prices. I wouldn’t be surprised if there was some reorganization and closing of Bucherer and Tourneau stores. This isn’t incompatible with Rolex developing a captive distribution channel.

[Mr Ben]

My vote is for Cassian being correct and there being little change in the market. WOSG’s share price move this morning seems to be a total over-reaction so I picked up a pile at £5 a share and put my money where my mouth is. It would be very nice if a gain on that purchase might pay for my next watch!