Watches of Switzerland Group has undergone rapid expansion in recent times, establishing itself as a dominant force in the global market.
Luxury watch retailer, Watches of Switzerland Group PLC (LON: WOSG) saw its shares drop by a quarter, following an announcement that renowned luxury watchmaker Rolex has agreed to acquire the prestigious watch store Bucherer.
Shares of Watches of Switzerland fell as much as 30%, marking the company’s steepest single-day drop in history.
Rolex Makes a Bold Move
Rolex stated in a recent CNBC report that its acquisition of Bucherer is not merely a business transaction but a thoughtful step toward perpetuating the legacy of an esteemed watch retailer. With no direct descendants to continue the Bucherer family tradition, Jorg Bucherer, Carl Bucherer’s 86-year-old grandson has made the bold decision to sell the company.
The Bucherer name holds deep significance within the world of luxury watches, and Rolex’s involvement is poised to carry forward this legacy into the future. With this impending acquisition, Rolex seeks not only to solidify its own position but also to bolster the entire watch and jewelry industry.
Rather than seeking a complete overhaul, the acquisition appears to be driven by the desire to ensure a seamless succession plan for Bucherer’s future. Rolex highlighted in the report that Bucherer will retain its name, brand, and management team in the aftermath of the acquisition.
In response to the apprehensions arising from the acquisition announcement, Watches of Switzerland, which sells Rolex, Breitling, Tudor, and Omega watches moved swiftly to soothe investor concerns. The company stated unequivocally that the Bucherer deal is not a purposeful move into retail for Rolex.
“There will be no operational involvement by Rolex in the Bucherer business. Rolex will appoint non-executive Board members. There will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition,” Watches of Switzerland said.
This statement was intended to underline the notion that Rolex’s core business identity as a manufacturer remains unchanged and that its involvement in the acquisition centers on safeguarding Bucherer’s legacy.
Watches of Switzerland Expands across Continents
It is worth noting that Watches of Switzerland Group has undergone rapid expansion in recent times, establishing itself as a dominant force in the global market.
The company’s recent surge has resulted in an expansive portfolio of 193 stores. As of April, Watches of Switzerland boasted a significant presence in both the UK and Mainland Europe, with 143 stores across these regions.
Additionally, the company has made a formidable mark in the US, with the remaining stores contributing to its impressive footprint. This transcontinental reach showcases the brand’s ability to cater to diverse markets while maintaining its commitment to luxury and excellence.
The company’s meteoric rise is further highlighted by its sales growth, which has surged by an astonishing 238% at constant currencies over the past five years. In the 12 months leading up to April, Watches of Switzerland achieved record-breaking sales figures of £1.54 billion. This remarkable achievement underscores the brand’s successful blend of exceptional products, customer service, and strategic expansion.
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