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HomeLifestyle NewsRolex’s Acquisition of Bucherer Is A Game-Changer For The Luxury Watch Industry

Rolex’s Acquisition of Bucherer Is A Game-Changer For The Luxury Watch Industry

In an ever-evolving market, embracing risks and challenging the established norms is the only way brands can survive, inspire and fortify their competitive standing. After all, playing safe is the most sure-shot way to deprive your future.

A similar event happened recently in the luxury watch realm when Rolex decided to take over the consumer space by acquiring Swiss retailer ‘Bucherer’.  

‘The world’s most popular luxury watch brand buys a historic watch retailer’- obviously, this news raised tons of questions, but before we dig into the when and why, let’s spare a moment to acknowledge this ‘genius’ move by Rolex.

What do we think about this?

On August 24, Rolex, the leading watch brand and a byword for luxury, announced the acquisition of Bucherer. The groundbreaking acquisition has been met with both curiosity and anticipation about its potential impact on the consumer space and the broader watch market.

We think buying Bucherer is a very strategic move. The culmination of Rolex’s and Bucherer’s potential will have far-reaching implications not just on the respective brands but also on the competitors, especially when the market is hyper-competitive and getting access to customers is a critical factor for success. This, in short, is the ultimate wake-up call for many brands!

REASON BEHIND THE ACQUISITION

One of the intriguing aspects of Bucherer’s acquisition is the absence of a direct heir in the Bucherer family. Jorg Bucherer, the 86-year-old grandson of Carl-Friedrich Bucherer, the founder of the historic Bucherer Empire, held the company’s reins with no successor to carry on the legacy. The decision to sell the company to Rolex is more than just a strategic business move. It reflects on the changing dynamics within the horological sphere.

Coming to think of it, in early 2023, Rolex chose Bucherer as its partner to launch the Rolex Certified Pre-Owned Program. While Rolex works with many other retailers, Bucherer is surely the largest retail store with which the brand collaborates. That means Bucherer single-handedly might have the largest count of Rolex customers.  

So, this raises the question: What is going on?

Unfolding the multiple strategic advantages of the acquisition 

  1. Rolex will now have direct access to Bucherer’s extensive and expansive distribution channels spread across many international locations. According to sources, Bucherer runs in over 100 locations worldwide and 53 of them sell Rolex. This manifests Rolex’s inclusion into the global key watch markets, giving the brand a long-term advantage that competitors can never practically match.

 

  1. Rolex gets unmatched access to Bucherer’s VICs (Very Important Clients). This takes the brand’s reach to the next level altogether. Gaining access to connection points and invaluable data, especially when launching new lines and segmenting further, is a huge..huge plus point.

 

  1. As said, Rolex has recently launched the Rolex Certified Pre-Owned Program, and Bucherer’s ownership of Tourneau, an American multi-brand retailer dealing with certified pre-owned and new watches, makes this synergy beyond perfect.

 

  1. Bucherer had no clarity about its successor, and Rolex’s acquisition only ensured stability. This further reassures the clients and stakeholders. This is a win-win move for both!

  

  1. Since Rolex launched its Certified Pre-Owned Program, it has been working diligently to take better control over its products. Integrating Bucherer into Rolex will enhance the brand’s direct control over its offerings. This means Rolex will now be able to capture a better share of the profit margin, which previously went to the authorised dealers.

 

Remember the saying, ‘With great power comes great responsibility’? It holds true in this situation as well. While there’s so much good to look forward to, Rolex must manage a few significant pitfalls in the coming days.

  • Rolex, the luxury Swiss brand, has limited experience in retail and is, to a large extent, dependent on third-party retailers. The acquisition now requires the brand to take charge of its in-house expertise, requiring a different skill set and an operational model.

 

  • Another uncertainty is the market reaction. There is a considerable risk of negative market and regulatory reactions because when a brand like Rolex acquires a big retailer like Bucherer, which also retails other competitor brands, there will be implications that must be managed carefully.

WHAT NOW?

As per Rolex, after the authorities approve the agreement, Bucherer will retain its name and operate independently. This statement conflicts with the nature of the deal.

Does this mean Rolex did not acquire the retailer to take control of it? From a different perspective, Rolex might not be the hunter but rather the protector. It can be the protector who likely has concrete goals in mind for Bucherer and takes this as a responsibility to save the retailer’s family lineage. This business arrangement can be a ‘solution’ and not an opportunity.

Guess we have to wait and monitor the coming months and maybe even years to realise what Rolex truly intends.

FINAL WORD

Gone are those days when Rolex was accountable only for the kind of watches they were making. Now, the management will be answerable to what kind of consumer experience they provide at every touch point.

This holistic brand experience, from product creation to sales and after-sales service started by Rolex, will be followed by many, but only a few will master it.

As the new era for luxury watch brands has started, let’s wait and see what the future unfolds.