Watches of Switzerland Group lost a quarter of its market value on Friday after Rolex agreed to buy a leading Swiss watch retailer.
Watches of Switzerland shares
WOSG,
slumped 27%, after Rolex on Thursday said it’s buying Bucherer, which has 100 outlets worldwide, not just in Switzerland but in the U.S., the U.K., Germany, France, Denmark and Austria.
Watches of Switzerland has 202 showrooms in the U.K., the U.S. and Europe. In a statement, Watches of Switzerland said the move is not a strategic move into retail by Rolex but a move reflecting Bucherer’s succession challenges, as 86-year-old Jorg Bucherer, the grandson of the founder, does not have heirs.
Watches of Switzerland said its statement was reviewed and confirmed “by the highest level of Rolex management” at both Geneva headquarters and in the U.K. and the U.S.
Analysts weren’t so sure. “The acquisition paves the way for Rolex to expand its direct-to-consumer sales efforts,” said Eleonora Dani, an analyst at Shore Capital. Rolex presently just has a single owed store, in Geneva.
In its statement, Rolex said the Bucherer deal is the best solution not only for its own brands but for the broader industry. It said Bucherer will continue to be independently run.
Read the full article here
