IN one fell swoop, Rolex further solidified its position in the watch industry when it acquired international watch retailer Bucherer for an undisclosed sum.
Long considered the must-have brand on many wrists, Rolex has been the gold standard to watch for watch makers, collectors and anyone keen on flaunting their wealth. The Geneva-based brand has a global standing and is often referred to in the same breath as Rolls-Royce as a mark of luxury standards.
Rolex is known for its watches holding their value, and appreciating over time. They make for great heirlooms and pawn shops are quite happy to take them in since they are likely to turn a profit whether they are reclaimed or not.
Consolidating The Relationship
Bucherer and Rolex have enjoyed a relationship since 1924. The lack of a successor for the family-run retailer was the reason for the sale.
Rolex explained the acquisition thus: “To preserve the long-standing partnership between the two companies and perpetuate their shared history, Rolex has decided to acquire Bucherer.”
In an era dominated by the rise of new technology businesses, there are still opportunities for expansion, through mergers and acquisitions, provided you have the coin and the heft to muscle in on the action.
Rolex has been rationalising its business since around the turn of this century, consolidating its facilities for cost efficiency and greater control. All located in Switzerland, the brand went on to acquire several component manufacturers and finishers — from bracelets to cases and movements.
While Rolex has said it will allow Bucherer to run independently, this acquisition could change the dynamic of the watch retail scene significantly. And it’s smart business on the part of Rolex, which has long stayed away from being a retailer, preferring to play god of watches and offering its limited production to a hungry, clamouring network of retailers. There are no official figures of the number of watches Rolex sells, though estimates hover around the million mark.
Rolex retailers have a reputation of chasing up the value of their business by holding back on available stock.
Try walking into a retailer and asking for a Rolex Submariner or Daytona and you’re likely to be told it’s not available. There may be a vague mention of a list you could join, but you’ll always be somewhere at the bottom unless you’re a preferred customer who adds significant value to the store’s bottom line.
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Still Playing Hard To Get
If you do get one of those sought-after Rolex watches, that’s when you can see its value rise when you sell it in the secondhand market.
As Rolex only offers very limited numbers of some models, this situation has been exploited by retailers to drive up sales of other brands of watches.
Now, with Rolex’s acquisition of Bucherer, that might signal a shift in how the watchmaker’s exclusive timepieces are sold, some observers feel.
Unless the distribution formula shifts suddenly, watch buyers will still face the issue of a limited supply which is far below the desired demand.
But having a watch retailer in its pocket does put Rolex in a position of greater power.
Should any retailers get out of line with exceptionally bad service, they could easily be dropped.
Rolex could offer a larger share of new watches to the 100 Bucherer stores in Europe, UK and the USA. That would squeeze out some retailers and attract more customers to Bucherer’s stores.
And with Rolex’s deep pockets, there’s no stopping the brand growing its Bucherer network of exclusive retailers.
While previously Rolex only made from the sale of their own watches at Bucherer outlets, they will now make from every model sold, which raises their stock while forcing other brands to evaluate their own standing with the passage of time.
