Watches of Switzerland shares plunge by a quarter after Rolex buys retailer Bucherer

The Watches of Switzerland Group mislaid a 4th of its worth connected Friday morning, heading for the stock's worst time ever, aft luxury watchmaker Rolex announced a woody to bargain ticker retailer Bucherer.

Rolex said the acquisition followed the determination of Bucherer proprietor Jorg Bucherer — the 86-year-old grandson of laminitis Carl Bucherer — to merchantability the concern successful the lack of immoderate nonstop descendants to instrumentality the reins.

"This determination reflects the Geneva-based brand's tendency to perpetuate the occurrence of Bucherer and sphere the adjacent concern ties that person linked some companies since 1924," Rolex said successful a statement.

"The Rolex radical is convinced that this acquisition is the champion solution not lone for its ain brands but besides for each the ticker and jewellery spouse brands, arsenic good arsenic for each the employees of the Bucherer group."

Bucherer volition clasp its sanction and marque and its absorption squad volition stay unchanged, Rolex confirmed, with its integration into the Rolex concern acceptable to implicit erstwhile contention regulators o.k. the takeover.

In a consequent connection connected Friday, Watches of Switzerland attempted to soothe evident marketplace concerns that Bucherer, the world's largest luxury ticker retailer, volition prehend much marketplace stock done its tie-up with the iconic brand.

Watches of Switzerland insisted the acquisition was solely astir succession readying for Bucherer and that Rolex — which is breaking with its modus operandi of acting solely arsenic a shaper — is not making a "strategic move" into the retail market.

In its statement, Watches of Switzerland noted that Jorg Bucherer "has nary household succession and his wishes are to signifier a bequest instauration with the proceeds of this transaction."

"This is not a strategical determination into retail by Rolex. This is the best-judged absorption to the succession challenges of Bucherer SA," Watches of Switzerland added.

"There volition beryllium nary operational engagement by Rolex successful the Bucherer business. Rolex volition name non-executive Board members. There volition beryllium nary alteration successful the Rolex processes of merchandise allocation oregon organisation developments arsenic a effect of this acquisition."

Nevertheless, shares of the London-listed institution plunged by arsenic overmuch arsenic 29% successful aboriginal trade, earlier paring losses.

Reassurance has 'fallen connected deaf ears'

Russ Mould, concern manager astatine stockbroker AJ Bell, said investors fearfulness that the tie-up volition mean Bucherer receives "preferential attraction including amended entree to the watches that consumers are hopeless to buy."

"Watches of Switzerland's efforts to reassure the marketplace that determination volition beryllium nary alteration successful however Rolex allocates banal person fallen connected deaf ears," Mould said successful an email.

"This is what Rolex mightiness person promised now, but that could easy alteration successful the future."

Mould noted that a inclination had emerged among assorted merchandise manufacturers, including large sportswear brands, of selling straight to consumers, successful crook learning much astir lawsuit preferences and increasing margins by cutting retired retailers.

"Imagine that happening with Rolex. Theoretically, it could usage Bucherer arsenic its transmission to merchantability and not person to fuss with different authorised dealers specified arsenic Watches of Switzerland," Mould said.

"It's worthy noting that Watches of Switzerland has been a favourite banal among galore mid-cap money managers. They volition person to look hard astatine the Bucherer announcement and determine if it radically changes the concern case."