(News Bulletin 247) – This British group has suffered from the announcement by Rolex which has decided to buy the Swiss retailer Bucherer. This makes the market fear a weakening of commercial relations between Rolex and Watches of Switzerland, even though the two companies assure that this will not happen.

The period is difficult for the Swiss watch and watch groups. At the beginning of the week, the federation of the Swiss watch industry announced a decline in exports in July of 0.9% in value and 3% in volume. Enough to put pressure on listed groups in the sector, such as Swatch and the luxury watch and jewelry distributor Watches of Switzerland (which, as its name does not indicate, is British), estimated Royal Bank of Canada and Stifel.

This Friday, for a completely different reason, the Watches of Switzerland share collapsed on the London Stock Exchange, losing 21% to 561 pence around 3:50 p.m.

This fall is linked to the announcement of the Swiss group Rolex. The latter indicated Thursday evening that he had decided to buy the Swiss retailer Bucherer, which was trying to sell itself, for lack of a descendant for Jörg Bucherer, boss of the company and heir to the founders of the company.

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Many counterfires

The amount of the acquisition of Bucherer, which has 100 stores worldwide and began selling the Rolex brand in 1924, was not disclosed.

“The fruitful collaboration between Rolex and the other official retailers in its sales network will remain unchanged,” Rolex said in a statement.

Watches of Switzerland chief executive Brian Duffy told Bloomberg in an interview that Rolex executives had assured his company that it would continue to be supplied with watches in the same way as before. “Nothing has changed as far as Rolex is concerned,” he assured the agency.

The British company also issued a press release that says roughly the same thing as its boss. Watches of Switzerland assures that Rolex “is not making a strategic move in distribution” with this takeover, that the watchmaker will not become operationally involved in Bucherer and that there will be no change on the Rolex side in ” the product allocation process” or “in the development of distribution” following this acquisition.

A big cloud on the horizon

However, all these statements do not prevent the market from worrying. And analysts to be skeptical.

“Investors seem to be concerned that this merger will allow Bucherer to benefit from preferential treatment, and in particular better access to the watches that consumers are ready to buy”, underlines Russ Mold of AJ Bell Investment.

“Watches of Switzerland’s efforts to reassure the market that there will be no change in the way Rolex allocates inventory fell on deaf ears. Rolex may have promised today, but that could easily change in the future.”

Quoted by Bloomberg, Jonathan Pritchard, of Peel Hunt, considers that these concerns will cloud the evolution of the action Watches of Switzerland “for the foreseeable future”. This analyst estimates that the Rolex brand accounts for around half of Watches of Switzerland’s sales. Over its entire 2022-2023 financial year ended last April, Watches of Switzerland had generated revenues of 1.54 billion pounds, or around 1.8 billion euros.