Rolex Buys Bucherer: WOSG Watched Its Price Plunge by Almost 29%

Key takeaways

• World-renowned watch retailer Bucherer sells to Rolex
• Competition isn’t taking the acquisition well, with stock prices falling hard
• The deal still needs to pass competition regulations

On August 24, 2023, time momentarily stopped for the watch industry as it was stunned by breaking news: Rolex had bought Bucherer, a 134-year-old luxury Swiss watch retailer.

What does this mean for the industry as a whole? Time will tell (more of these to come), but we’re about to dive into what we know now.

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What’s the big news with Bucherer and Rolex?

Bucherer is the world’s largest luxury watch retailer, and everyone’s heard of watch manufacturer Rolex. The companies have had a long partnership, extending back almost 100 years. Bucherer is an official Rolex retailer that also provides official Rolex after-sales service care.

On Thursday, Rolex announced its purchase of Bucherer, sending shockwaves through the industry. This move potentially places Rolex as a competitor in the retail market, as Bucherer has over 100 stores worldwide, from the US to Austria. Still, the acquisition needs to go through competition regulators.

Rolex has confirmed it’ll keep Bucherer’s name, brand, and management team, which could be good news for its employees. Plus, it’s always nice when companies retain centuries-long heritage.

Why did Bucherer sell?

Bucherer was founded in 1888 by Carl Bucherer. Its current owner is his 86-year-old grandson, Jorg Bucherer. With no direct descendants to take over the company, he figured it was time to hand it over — and who better than Rolex?

Rolex’s acquisition press release proudly talks about their long shared history, with Bucherer an official Rolex retailer since 1924. The company also notes that Jorg Bucherer is the last person working in the industry to have known and worked with Rolex’s founder, Hans Wilsdorf. There’s clearly an immense amount of mutual respect, with Rolex concluding its press release with:

“Rolex is proud of what the two companies have achieved since the start of their collaboration.”

What’s happened to competitor stock prices?

While all looks pretty rosy in the Bucherer and Rolex camps, other companies haven’t been so lucky. Rolex and Bucherer are private companies, unlike Watches of Switzerland (LON: WOSG).

Watches of Switzerland is the UK’s largest luxury watch retailer, and the company has been trying to dampen rumors that Rolex is planning on breaking into the retail market.

It’s also fending off concerns that Rolex will give Bucherer preferential treatment on acquisition. If Bucherer received the best, most coveted stock, Watches of Switzerland would undoubtedly suffer.

Unfortunately, it seems the company hasn’t done enough to assure investors that the deal won’t affect business. The market has responded accordingly: WOSG plunged almost 29% on market open after the news came out, wiping a massive chunk off its $2.12bn market cap.

The bottom line

With the luxury watch market booming even in uncertain times, we’ll have to see what happens to Watches of Switzerland as the acquisition progresses. The company has projected annual revenue of £1.65bn–£1.7bn ($2.07bn–$2.14bn), so let’s watch and wait.

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