Rolex takes over Bucherer in a Swiss luxury shakeup

The backstory: Back in the late 1800s, the Swiss luxury brand Bucherer was born from the vision of entrepreneur Carl-Friedrich Bucherer and his wife Luise. As time marched on, their sons, Ernst and Carl Eduard, stepped into the business. Around then, Bucherer partnered up with Rolex founder Hans Wilsdorf, giving Rolex watches a major boost. Zoom in to 1977, Jörg Bucherer, the third-generation leader, took the reins. Under his guidance, Bucherer went global, setting up shops in Austria and Germany. Later, Bucherer even opened upscale flagship stores in major cities like Paris, London and the US.

And then there's Rolex – those watches have become the frontrunners in the secondhand market. Models like Daytona, GMT and Submariner are in high demand, often costing premium prices. Even though Rolex manufactures around a million watches a year and raked in over 9 billion Swiss francs (around US$10.2 billion) of sales last year, according to Morgan Stanley, getting your hands on one through an authorized dealer often involves a waitlist that stretches for months or even years.

More recently: In a twist last year, Rolex started including authenticity certificates for its pre-owned watches sold by authorized dealers, including those sold through Bucherer. This was a big deal, considering Rolex's stronghold on both new and secondhand sales. Analysts from Deloitte predicted in 2022 that the luxury pre-owned watch market could hit US$35 billion by 2030.

And then, out of the blue, the 87-year-old Swiss billionaire Bucherer announced his sale of the company he had carried forward for so long. It was a surprise because the Bucherer family had tightly held the reins for ages. Why's it making waves? Well, Bucherer doesn't have any direct successors.

The development: Now, the Bucherer legacy, stretching across generations and continents, is starting a new chapter with Rolex taking over. But the specifics of the deal aren’t clear. Both these Swiss giants are keeping the price tag under wraps. But financial experts like Jean-Philippe Bertschy, an analyst with Vontobel Holding, estimate Bucherer's yearly sales hit around 2 billion Swiss francs (US$2.3 billion), putting the total value at about 4 billion Swiss francs (US$4.5 billion).

Rolex also emphasized that the transaction was initiated due to the family's intent to sell the business because there weren’t any direct descendants to pass it on to. Plus, Rolex also made it clear that this won't change their existing retail partnerships, and the boutiques will continue to operate independently.

“Jörg Bucherer is the last person still in activity to have known and worked with Hans Wilsdorf,” Rolex said Thursday in its statement announcing the deal, adding that Bucherer will remain the retailer’s honorary president.

Key comments:

“Jörg Bucherer is the last person still in activity to have known and worked with Hans Wilsdorf,” said Rolex in last week's statement announcing the deal, adding that Bucherer will remain the retailer’s honorary president.

“At first glance, this is shocking for all of the other Rolex official dealers because Rolex has always said it is committed to independent retail distribution and has no desire to do own retail,” said Jon Cox, head of Swiss equities at Kepler Cheuvreux, to Bloomberg.

“Nothing has changed as far as we are concerned,” said Watches of Switzerland CEO Brian Duffy.