Switzerland's biggest watch brand Rolex has bought 135-year-old luxury retailer Bucherer in a surprise move under which both companies will continue to operate as separate brands.
Rolex did not disclose the value of the deal which will boost its presence globally and said Bucherer's integration into the Rolex group would be effective once competition authorities have approved the takeover.
“Following the choice made by Jorg Bucherer, in the absence of direct descendants, to sell his company’s business, Rolex has decided to acquire the watch retailer, which was, until now, an independent entity,” Geneva-based and privately held Rolex said on Thursday.
This move reflects Rolex's “desire to perpetuate the success of Bucherer and preserve the close partnership ties that have linked both companies since 1924. For more than 90 years, the two businesses have worked alongside one another and have each contributed to the other’s achievements and growth”.
Rolex, wholly owned by the Hans Wilsdorf Foundation, only owns and operates one store in the world, which is in its home city of Geneva. It sells its watches through authorised retailers around the world.
Lucerne-based Bucherer sells various luxury watch brands and has stores in Switzerland, the US, England, Germany, France, Denmark and Austria, with a total of more than 100 sales outlets globally.
Bucherer, which has been an official retailer of Rolex since 1924, distributes Rolex watches at 53 of its stores and Rolex's cheaper Tudor brand at 48 of its locations.
The timepiece retailer is also an official after-sales service centre for both brands and has watch repair workshops.
Rolex and Tudor operate independently, with the latter having its own chief executive.
Under the acquisition terms of the latest deal, Bucherer's management team will remain unchanged and Mr Bucherer, the last person to have known and worked with Hans Wilsdorf, the founder of Rolex, will remain as honorary president of the Bucherer group.
“The Rolex group is convinced that this acquisition is the best solution – not only for its own brands but also for all the watch and jewellery partner brands, as well as for all the employees of the Bucherer group,” the company said.
In 2018, Bucherer acquired American watch retailer Tourneau as part of its expansion drive. The move came a year after it bought The Watch Gallery in the UK.
After subdued spending in 2020, demand rebounded in China and the US in 2021 but was later affected by the war in Ukraine, high inflation levels and supply chain issues.
The Swiss watch industry had its best year in 2021, with the value of exports climbing to 21.2 billion Swiss francs ($24 billion), exceeding a 2014 record and rising above pre-coronavirus levels, according to Deloitte.
For the past two years, the US has been the biggest single market for the Swiss watch industry, accounting for 15 per cent of exported watches in 2022 there, the consultancy said.
Industry executives surveyed by Deloitte have said the US is the next big growth market, followed by India, China and Gulf countries.
Hong Kong, as a market, continues to decline while China has yet to recover to its pre-pandemic level of export share. Europe and Japan remain stable, with 30 per cent and 6 per cent, respectively.
Rolex, known for its Daytona, Submariner, GMT and Master II models, manufactured over a million watches that generated more than $13 billion in sales in 2022.
“Luxury watches are seen as stable stores of value particularly in a volatile market where inflationary pressures are high,” Deloitte said.
According to the consultancy's research of consumers who purchase a watch as an investment, the motivation for doing so is to resell at a higher price (36 per cent) or to diversify their investment portfolio (33 per cent).
Consumers in China are particularly interested in portfolio diversification (55 per cent) while Singaporeans are partial to resale opportunities (49 per cent) and Italians are most likely to purchase a watch for family members to inherit (31 per cent).