BREAKING NEWS: Rolex buys Bucherer

[77T]

I found Rolex’s press release on another site. Still not listed in their own press room.

https://professionalwatches.com/role...ires-bucherer/


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[SDR581]

To me this means the following will now happen;

Rolex will control the flow of watches to favor Bucherer locations

Bucherer sales staff still have total control over who they sell too...Preferred clients

Now only the select few super wealthy, influencers and and local celebrities will have access to purchase their watches pushing the brand image to the next level.

Gray market prices will now sky rocket again

You will see more independent ADs lose their status

MSRPs will increase drastically.

[enjoythemusic]

Originally Posted by SDR581

Rolex will control the flow of watches to favor Bucherer locations

Yes, yet probably only because they are the largest retailer globally. Once Rolex gets their new second (third? fifth?) factory online and humming along there will be a better (modern) balance of inventory.

Bucherer sales staff still have total control over who they sell too...Preferred clients

Speculation, though odds are yes VIPs who are well-known to NOT FLIP timepieces may indeed get priority.... as it should be imho.

Now only the select few super wealthy, influencers and and local celebrities will have access to purchase their watches pushing the brand image to the next level.

Speculation, and i doubt this as Rolex will still have MANY geographic 'holes' in their distribution chain. They're still relying on other retailers and Rolex will surely ensure profitability for them as well.

Gray market prices will now sky rocket again

This probably MUCH MORE depends on 'liquidy' within the currency markets. This is completely out of the control of Rolex, and Kellogs, Chevy, McDonalds... and home builders. Pretty please ensure you place the blame on those who truly cause prices to skyrocket. Higher prices is part of their (not Rolex) math equation.

MSRPs will increase drastically.

See my answer above.

Higher 'liquidy' usually also brings about (higher) inflation (a.k.a. currency devaluation) as we're all now experiencing within the marketplace at an accelerated level during the past few years.

jmho

[Goatrope]

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.

Thanks for sharing this insightful analysis.

[Spartacus]

Can’t wait to go to my AD and ask about this news. Lost my business for good. Absolute misery dealing with my AD. Despite my business, despite getting a ceramic Daytona in 2019, treated like trash, I welcome a new era, owner and point of sale.

And, I will be interested to see if Rolex really does have my purchase history.

[GW44]

Originally Posted by 77T

I found Rolex’s press release on another site. Still not listed in their own press room.

https://professionalwatches.com/role...ires-bucherer/


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Here you go;

https://www.google.com/url?sa=t&rct=...G&opi=89978449

From the Rolex Press site.

[Tavli3]

Originally Posted by HMHM

My predictions are that Rolex will eventually cut production from the current 1-1.2m to approx 750-800k per year and elevate the status of their watches towards AP and Patek Philippe. The purchase of Bucherer is part of the parcel to have some control of distribution like Patek, with some manufacturer owned and some AD owned. Tudor will take the current position of Rolex to compete against Omega and Tag. As Rolex reduce production, staff will be trained to improve finishing, hence the move to open case back for models like the Platinum Daytona and the 1908. We will see better finishing from Rolex going forward to justify their position against AP and Patek.

This would be the smart play and dovetails perfectly with what Fleetlord stated that Rolex is never letting the brand diminish by having unsold watches sitting in cases and being sold at discounts on gray market.

Stern said when he decided to discontinue Nautilus that they must protect the brand expect no less from Rolex. Rolex can easily afford to sell less watches to maintain the allure of exclusivity and the high prices that come with it.


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[Wrist King]

Watches of Switzerland down 23.5% this morning in London.


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[knighty88]

Originally Posted by Wrist King

Watches of Switzerland down 23.5% this morning in London.


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Fortune favours the brave!!

[PenDelicate]

Originally Posted by Cassian739

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

That was great.

[visualplane]

Will this make Rolex prices go up (preowned and new)?

[enjoythemusic]

Originally Posted by Wrist King

Watches of Switzerland down 23.5% this morning in London.

Typical stonk algo overshoot, strong buy.

[Corvette]

Originally Posted by Tavli3

This would be the smart play and dovetails perfectly with what Fleetlord stated that Rolex is never letting the brand diminish by having unsold watches sitting in cases and being sold at discounts on gray market.

Stern said when he decided to discontinue Nautilus that they must protect the brand expect no less from Rolex. Rolex can easily afford to sell less watches to maintain the allure of exclusivity and the high prices that come with it.


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I agree with this analysis. Rolex doesn’t have stockholders or family members to placate and they can operate by actively increasing and contracting supply as they see necessary. This acquisition further strengthens my belief that Rolex will continue to elevate their brand identity and eventually become a Ferrari/Hermes where desirable inventory will be strictly allocated to buyers that appreciate the brand and are not going to sell for a quick buck. Gray market supply will slowly dry up and Rolex will be able to control both the new and preowned markets to a great extent.

[GoingPlaces]

Originally Posted by visualplane

Will this make Rolex prices go up (preowned and new)?

IMO prices for the most part stay the same. Rolex offers access to the brand at low enough price points that will not affect demand. SS sports models will hold. PM pieces softening but we are seeing that already.

[Rico_Brasole]

Originally Posted by Corvette

I agree with this analysis. Rolex doesn’t have stockholders or family members to placate and they can operate by actively increasing and contracting supply as they see necessary. This acquisition further strengthens my belief that Rolex will continue to elevate their brand identity and eventually become a Ferrari/Hermes where desirable inventory will be strictly allocated to buyers that appreciate the brand and are not going to sell for a quick buck. Gray market supply will slowly dry up and Rolex will be able to control both the new and preowned markets to a great extent.

But Rolex is more like the BMW of watches in terms of actual product.

If they want to be the Ferrari of watches they’ll have to start producing more sophisticated watches

I’m sorry, but changing bracelets and colors of bezels doesn’t actually make you the Ferrari of watches.

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[Tavli3]

Originally Posted by Corvette

I agree with this analysis. Rolex doesn’t have stockholders or family members to placate and they can operate by actively increasing and contracting supply as they see necessary. This acquisition further strengthens my belief that Rolex will continue to elevate their brand identity and eventually become a Ferrari/Hermes where desirable inventory will be strictly allocated to buyers that appreciate the brand and are not going to sell for a quick buck. Gray market supply will slowly dry up and Rolex will be able to control both the new and preowned markets to a great extent.

Gray market supply will take a looong time to dry up at the rate pieces are moving or should I say not moving.
Inventory has tripled in past 18 months. Not even blue Sky Ds are selling. I’m sure Rolex is aware and watching the build up of unsold gray market watches. This can and will affect the retail side and their ambition to achieve a higher exclusivity status.
The gray market has been the driving force of the skyrocketing demand for Rolex. If gray market collapses so will the retail end. Rolex certainly doesn’t want to see that. I say it’s a lock they cut production which makes me think of what the new factory is for. Unless they are mothballing the older facilities and or coming out with new models or higher finishing which the older machines can’t do. Interesting times.


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[Corvette]

Originally Posted by Rico_Brasole

But Rolex is more like the BMW of watches in terms of actual product.

If they want to be the Ferrari of watches they’ll have to start producing more sophisticated watches

I’m sorry, but changing bracelets and colors of bezels doesn’t actually make you the Ferrari of watches.

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I don’t necessarily agree that Rolex has to make more sophisticated watches…they just need to limit their supply and control who they sell them to. Perception is everything.

I bet 99% of Daytona owners have never used the chronograph function. I have a GMT Pepsi and I travel but have never used it for a different time zone, that’s what my iPhone is for.

[Old Geezer]

I don't think this bodes well for small ADs or most customers, especially those of us who are not near a metropolitan area with one of the boutiques.
Inevitably the competition and lists will get longer, if not impossible to crack at one of these boutiques unless there is also a change in how pieces are allocated to customers to give more people a fair opportunity to acquire their piece.

[Rico_Brasole]

Originally Posted by Corvette

I don’t necessarily agree that Rolex has to make more sophisticated watches…they just need to limit their supply and control who they sell them to. Perception is everything.

I bet 99% of Daytona owners have never used the chronograph function. I have a GMT Pepsi and I travel but have never used it for a different time zone, that’s what my iPhone is for.

Sounds like they would be relying on hype and not actually making a better product while trying to go upmarket.

Hype is already dying if not already dead


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[GoingPlaces]

Originally Posted by Corvette

I agree with this analysis. Rolex doesn’t have stockholders or family members to placate and they can operate by actively increasing and contracting supply as they see necessary. This acquisition further strengthens my belief that Rolex will continue to elevate their brand identity and eventually become a Ferrari/Hermes where desirable inventory will be strictly allocated to buyers that appreciate the brand and are not going to sell for a quick buck. Gray market supply will slowly dry up and Rolex will be able to control both the new and preowned markets to a great extent.

At 1M+ units per year there is nothing Ferrari/Hermes about Rolex. Threshold of entry significantly higher in relation to how many can afford these products. Much smaller market base. They leave that to PP/AP and company.

[Hulkhunter]

Might not be the best thing if you are a big buyer at Bucherer.

These people will likely have been getting watches from other ADs.
Bucherer will potentially be able to see exactly what you have had. Assuming they have access to the Rolex database. Could raise some questions

[Corvette]

Originally Posted by Rico_Brasole

Sounds like they would be relying on hype and not actually making a better product while trying to go upmarket.

Hype is already dying if not already dead


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Does Hermes make a better product than Gucci ? Does Ferrari make a better product than Lamborghini? No. It’s about marketing, placement, brand perception.

And I would disagree that hype is dead- try walking into any AD and asking for a SS professional model. Hype is still there however the frenzy has died down.

[Corvette]

Originally Posted by GoingPlaces

At 1M+ units per year there is nothing Ferrari/Hermes about Rolex. Threshold of entry significantly higher in relation to how many can afford these products. Much smaller market base. They leave that to PP/AP and company.

A Hermes Birkin is about the same price as any Rolex.

Ferrari obviously is different because of the price tag but I was mainly using as an example of how to control supply and control the buyers of your product.

[IR201]

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.

So on your fifth dash down, how will watches be allocated then? Assuming demand still outstrips supply, there will have to be some system of determining allocation. What will it be in your estimation?

[Rico_Brasole]

Originally Posted by Corvette

Does Hermes make a better product than Gucci ? Does Ferrari make a better product than Lamborghini? No. It’s about marketing, placement, brand perception.

And I would disagree that hype is dead- try walking into any AD and asking for a SS professional model. Hype is still there however the frenzy has died down.

Funny, I did try and it worked out pretty well.




And to address your other point. Yes brand perception is important. I don’t know anything about Hermes or Guccis.

Lamborghini and Ferrari…rolex is neither of those when it comes to watches. Omega produces arguably a better watch than Rolex. So yes I do believe Ferrari or Lamborghini is better than BMW and BMW is not trying to compete in that market.

If rolex wants to compete w the big boys , AP and PP and even VC they need to step up their product.


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[Corvette]

Originally Posted by Rico_Brasole

Funny, I did try and it worked out pretty well.




And to address your other point. Yes brand perception is important. I don’t know anything about Hermes or Guccis.

Lamborghini and Ferrari…rolex is neither of those when it comes to watches. Omega produces arguably a better watch than Rolex. So yes I do believe Ferrari or Lamborghini is better than BMW and BMW is not trying to compete in that market.

If rolex wants to compete w the big boys , AP and PP and even VC they need to step up their product.


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Oh come on...you walked into an AD that you had zero history with and purchased a Pepsi? I mean...that's laughable let's be realistic here.

I'm not trying to start a fight with you but I belive you think the only way to compete with the "big boys" is to produce complicated watches. I disagree as it isn't what Rolex is and it doesn't need to become the next Patek. I'd argue that AP is known only for their Royal Oak and everything else they produce isn't coveted. I'd say almost every professional model Rolex makes has a fanbase and sells quickly.

[RichardBartlett]

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.

This has probably sent shivers down every brand in Bucherer's portfolio outside Rolex & Tudor. Having access to this data for the group would allow Rolex to extrapolate across the whole world and get a full and comprehensive understanding on what sells, why and to whom.

That's explosive to the competition and I suspect will lead those brands who believe they directly compete with the Rolex group to re-assess their relationship going forward..

There will no doubt be an emergency board meeting in every watch manufacturer to discuss the ramifications long into the night.. Oh and WOS group too who are probably the most concentrated on this news..

[douglasf13]

Originally Posted by Rico_Brasole

Funny, I did try and it worked out pretty well.




And to address your other point. Yes brand perception is important. I don’t know anything about Hermes or Guccis.

Lamborghini and Ferrari…rolex is neither of those when it comes to watches. Omega produces arguably a better watch than Rolex. So yes I do believe Ferrari or Lamborghini is better than BMW and BMW is not trying to compete in that market.

If rolex wants to compete w the big boys , AP and PP and even VC they need to step up their product.


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Agreed. Rolex is essentially “Mercedes” to Omega’s “BMW” and Grand Seiko’s “Lexus”. It seems like limiting sales to try and propel them into becoming “Bentley” is tenuous if the product itself doesn’t change, although hype can certainly carry a company for a while.

I certainly think Rolex is among the best “beater” luxury watches that can handle a day to day bashing, but they’re not even close to a brand like Patek in my mind.

[APhound]

Sorry if I missed it but is there a real estate component to this deal or do they lease their space? Thx


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[Rico_Brasole]

Originally Posted by Corvette

Oh come on...you walked into an AD that you had zero history with and purchased a Pepsi? I mean...that's laughable let's be realistic here.

I'm not trying to start a fight with you but I belive you think the only way to compete with the "big boys" is to produce complicated watches. I disagree as it isn't what Rolex is and it doesn't need to become the next Patek. I'd argue that AP is known only for their Royal Oak and everything else they produce isn't coveted. I'd say almost every professional model Rolex makes has a fanbase and sells quickly.

Small wait, roughly a month for the SD and 3 months for the Pepsi. No big deal and definitely saved on the premium. At one point people were buying the Pepsi for what I paid for both watches

And I’m not trying to argue either. Just that Rolex is no Ferrari/Lamborghini/Pagani/Bugatti or whatever other super car you want to compare it to.

It’s a Lexus /Mercedes/ BMW. People that might not know watches will think it’s a Ferrari though. But those who know , know


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