By Ian Walker
Shares of Watches of Switzerland Group fell as much as 29% in early trade after Rolex agreed to buy watch retailer Bucherer in a deal that will give it more control over how its watches are sold.
Shares of the London-listed luxury-watch retailer at 0732 GMT were down 178.0 pence, or 26%, at 515.50 pence having fallen to 495.40 pence earlier in the session.
Watches of Switzerland said Friday that it noted the deal and that it is a “best-judged reaction” to the succession challenges of Bucherer, noting that Jorg G Bucherer is 86 years old and had no family succession.
It said there won’t be any change in Rolex’s processes of product allocation or distribution developments as a consequence of the acquisition.
Analysts at Shore Capital said the deal is unlikely to affect Watches of Switzerland in the short term given that there’s little geographical overlap between Bucherer and the London-listed company. Bucherer stores are mostly around continental Europe, while Watches stores are mainly in the U.K. and U.S.
As of July 30, Watches of Switzerland had 202 showrooms across the U.K., U.S. and Europe including 87 dedicated mono-brand boutiques in partnership with luxury watch brands including Rolex.
Bucherer operates more than 100 stores globally, 53 of which currently distribute Rolex watches. Bucherer runs 48 stores that distribute Rolex-owned Tudor watches.
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