Why Rolex Bought Bucherer: A 100 Year Strategic Partnership

Why Rolex Bought Bucherer

After a 100-Year Love Affair

Then & Now: Bucherer Boutique in Lausanne, Switzerland with Rolex signage. Photo on left was taken close to 100 years ago!!!

Rolex just became a major Rolex authorized dealer for the first time in their history!!! This is really fascinating news if you think about the short and long-term implications of this strategic and arguably brilliant chess move...

Many people have been asking me what my opinion is on the recent news that Rolex has agreed to purchase Swiss watch mega-retailer, Bucherer? When the news broke, I was probably the ONLY horological publication that didn't cover the news—which was by design—as I wanted to take my time with preparing a meaningful & thoughtful article on the subject. There are a lot of rumors and opinions flying around the horological web about what the real significance is of this merger, and in my opinion, as Shakespeare once said "It's much ado about nothing".

I would argue Rolex purchasing Bucherer was a highly organic choice based upon their 100-year-old successful strategic partnership.

Before I go into detail on the history of Rolex and Bucherer, which is absolutely fascinating, I will give you my conclusion up front on why I believe Rolex purchased Bucherer.

I believe Rolex and Apple are two of the most respected Superpower watch brands on earth and in many ways they are remarkably similar. As you are likely aware, nine years ago, Apple entered the world of horology when they introduced the Apple Watch, and in doing so fired an opening salvo shot over Rolex's bow. This shot was fired loud and clear. Apple is the largest (by Market Cap at close to $3 Trillion, with a "T") and most successful company on earth today.

If you think I am hallucinating, then take a look at the screenshots above and below that show Apple CEO Tim Cook on stage showing the Apple Watch apparently overtaking Rolex years ago. 

The REALLY strange thing is Apple claimed to have displaced Rolex as number one, but didn't mention by which metric they measured this formula. My best guess is it was based upon overall sales revenue. As we see in the infographic below form Morgan Stanley Research, Rolex by far and away maintains the largest share of the Swiss watch market at close to one third!!! In other words, Rolex is the SuperPower of the Swiss Watch Industry. So when people mouth off and say silly things like Patek Philippe and Audemars Piguet are the kings of the Swiss watch industry, the numbers radically contradict that notion. Speaking of speculation, and mark my words, I believe it is likely Rolex will purchase Patek Philippe sometime in the future.

The chart above is from 2021 and shows Rolex with a 28.8 percent marketshare.

For 2022, the Swiss watch industry is estimated to have generated around $20 Billion in annual sales with Rolex having sold around 1.2 Million watches, which suggests Rolex has increased its marketshare and is now up around 29.2%, thus throwing off somewhere around $10.5 Billion in top line sales. Also, Cartier seems to have displaced Omega in profitability to take the number two position behind Rolex with around 7% marketshare.

Apple is estimated to sell around $15 Billion in revenue for their annual sales of Apple Watches. In a bizarre twist of irony, I believe Apple's entrance into the watch business was one of the best things to happen to the Swiss watch industry as it called much more attention to the wrist for the international consumer.

Vertical Integration

So what does this have to do with Rolex purchasing Bucherer you ask??? Everything and nothing. I argue one of the greatest features of Apple's business secret success formula is how they are 100% vertically integrated, as they quickly evolved decades ago from being a B2B (Business to Business) company, to a B2C (Business to Consumer) organization. Specifically, the advent of Apple opening their own Apple Stores, was the tipping-point, next level game-changer, as it really revolutionized the brand and paved the way for their future success and hyper-growth. 

If you think Rolex is in a Swiss bubble and is not hyper aware of the world around them I have news for you: The Rolex leadership in Geneva even though they are highly stealth and super low-key, have always been highly adroit in business and marketing. In other words, they are likely far more observant about the world around them, than might meet the eye. Rolex's culture and personality represent an unusual balance as they are exhibitionists when it comes to showcasing their watches, while remaining highly discreet and socially voyeuristic.

Rolex today is completely vertically integrated, with one exception, and that is a lack of an integrated B2C retail store presence and thus the associated highly beneficial feedback loop. 

Back in 2013 Rolex invited the top four online horological journalists to visit them in Geneva and be the first journalists to tour all four Rolex manufacturing facilities in Switzerland. 

I was one of the top four, invited along with Ben Clymer of Hodinkee.com, Ariel Adams of ABlogToWatch.com, and James Dowling of TimeZone.com.

Jake Ehrlich, James Dowling, Benjamin Clymer, and Ariel Adams on November 18, 2013(RolexMagazine.com, Timezone.com, Hodinkee.com, and ABlogToWatch.com)

The four of us spent a lot of time with many of the top Rolex executives in Geneva and had many deeply engaging and profound conversations. 

I took this photo of James Dowling and Ben Clymer chatting in the lobby of the Hotel de la Pain in Geneva as we prepared to begin our first day tour of the four Rolex factories in Switzerland.

I recall one such conversation where we all spoke on the subject of Rolex getting into the B2C business and selling Rolex watches directly to the public on Rolex.com. In other words, we were discussing where Rolex might evolve in the future, and the subject came up when one of us asked if Rolex planned to ever sell Rolex watches on Rolex.com? 

Most Rolex executives seemed to be pretty ambivalent on the subject, while Ben Clymer and Ariel Adams and myself were all arguing how it would be foolish for Rolex to ignore this amazingly profound opportunity. In other words, we argued passionately for the strong potential value proposition of Ecommerce—if executed properly. If I recall correctly, at the time most most major watch brands were already selling their watches online, but Rolex didn't even list their M.S.R.P. for their watches on Rolex.com?

Today, Rolex.com remains one of the very best informational websites on the web, but they have still not started offering their watches for sale online.

Enter, Bucherer. Bucherer is one of the biggest, if not the biggest watch retailers on earth with around 100 stores internationally, not to mention, they own Tourneau, which is a major Rolex retailer in the United States.

While there are may Rolex boutiques around the world, my understanding is most are not owned by Rolex, but are franchised by companies like Tourneau and Bucherer. If I recall correctly, I think today Rolex owns only 2 Rolex boutiques, but by purchasing Bucherer, this all changes, and Rolex will now have a major presence in retail—kind of like Apple does.

Apple currently has more than 500 freestanding Apple stores located around the world, and I believe Rolex has close to 2000 authorized retailers. Don't get me wrong, I am not saying Rolex is trying to compete with Apple, because I don't think that is the case. I do think Rolex is seeking what Apple has sought with all the benefits of complete vertical integration.

Personally, if I were the CEO of Rolex, I would go pedal-to-the-metal with establishing Rolex owned boutiques all over the planet. I would also line extend (very carefully, and methodically) the Rolex brand and create new Rolex product categories like Rolex writing instrument, eyeglasses, and other luxury goods. Keep in mind, my ideas are considered to be heresy by Rolex, which for decades has said they would ONLY ever make watches.

I took the photo below of the Manager of the Honolulu Rolex Boutique in Hawaii, and he was a really cool dude! Notice how insanely cool looking that Rolex Logo looks on that surfboard!!! This surfboard was custom made for Rolex and if I recall correctly I think I heard the CEO of Rolex has one of these in his office, but you and I can't buy one as they have never been made available to the public for sale. My point is that I would totally buy a Rolex surf board as it looks so RAD!!!! and I know I'm not the only one. C'mon and sing it with me, Let's go surfin' now, everyone is learning how, come on a safari with me!!! Rolex Surfing Safari that is...

The heartwarming and super friendly Aloha spirit alive and well in the Rolex Boutique 

in Honolulu, Hawaii as the manger throws a Shaka "Hang Loose" gesture.

Before we take a deep dive into Bucherer, I will conclude by saying I believe Rolex purchasing Bucherer represent their first major foray into the retail business, and is clearly a strategic B2B play. I know Rolex said they plan to keep everything the same and not really interfere with Bucherer's current business model, but to my way of thinking that's kind of like putting wrapped Christmas presents out in July and telling children to try and figure out what is in them without opening them!?!! 

Just to be crystal clear, I think Rolex wants to add the missing key piece of their vertical integration model which is a owned and controlled Rolex Retail presence. I think once Rolex gets a real taste for the supreme benefits of doing so, they will dive deep and fast into this ocean.

Also, moving closer to the customer will give Rolex a much better way to eliminate the grey market. Historically, I believe Rolex didn't really care about the grey market as long as they sold every watch they made, but now I believe they are much more concerned about creating more meaningful relationships directly with their customers.

Also, Rolex rolled out it's Rolex Pre-Owned Program with Bucherer, as they are their most trusted long-term authorized dealers.

Bucherer & Rolex

100 Year Strategic Partnership

So not let's take a deep dive into Bucherer. Bucherer was founded in Switzerland 136 year ago in 1888 by Carl Friedrich Bucherer in Lucerne, Switzerland. 

Carl Friedrich Bucherer, founder of Bucherer in 1888 pictured above.

I included my book cover below as the photo above of Carl F. Bucherer reminded me of the photo of Rolex founder, Hans Wilsdorf on my book cover when he was a young man. This is one of twelve books Rolex History books I have been working on putting together for several years now which cover the entire arc of Rolex history. Many people have been asking me when I will start releasing the my twelve volumes, and they answer is I don't know for sure. The delay is based upon the amount of content I keep discovering which is completely mind-boggling. 

That being said, I can promise you once I publish my books they will be some of the most beautiful coffee table books ever made, and they will showcase Rolex's AMAZING history in a way that has NEVER been done. In other words, I have read pretty much read every book ever published on Rolex history, and they are all a complete joke compared to my upcoming Rolex History series of 12 books which is more like a Rolex encyclopedia, but much more conversational.

Carl Friedrich Bucherer was a pioneer in the retail luxury jewelry and watch business as he had an absolute commitment to excellence in everything he touched. In 1888 Carl and his wife, Luise opened their first store under the name of Bucherer at Lucerne's Falkenplatz as seen below. 

Just to put things in perspective, Hans Wildsorf was only 7 years old when Carl F. Bucherer opened his first store in 1888. The photo below shows Hans Wilsdorf (far right) with his parents and brother and sister in 1887 when he was only 6 years old.

Carl F. Bucherer opened a second Bucherer boutique in Kalellpatz and Kapelgasse, and even though they started out with selling only pocket watches, it was just a matter of time before they got into selling wrist watches. In 1919 Carl Bucherer created an entire watch line that he designed and made in house, which was very successful. He passed away in 1933.

Carl Friedrich Bucherer had two sons, who both attended watchmaking school in Switzerland and  followed in his footsteps into the family business in 1913. In 1924, Ernst Bucherer began his business relationship with Rolex founder, Hans Widsdorf. 

Hans Wilsdorf with his Rolex brand and Bucherer were both considered to be outsiders by the powerful Swiss cartels that dominated the Swiss watch industry during the early 20th century. These two highly innovative and pioneering spirited entrepreneurs, Wilsdorf and Bucherer decided to join forces and put Rolex watches front and center in the Bucherer flagship store as seen in the photo below. This iconic Bucherer boutique in Lucerne remains their flagship to this day.

Bucherer Rolex Boutique back in the 1930s in Lucerne, Switzerland 

Rolex and Bucherer formed a highly successful and highly synergistic strategic partnership that has evolved and prospered for the past 100 years.

Carl F. Bucherer's first son was named Carl-Eduard Bucherer and he is pictured below in the late 1920s with his wife, Wilhelmina Bucherer-Heeb.

The Bucherer brochure cover seen below is from 1955 and showcases Rolex as their premier partner. 

Carl F. Bucherer's next son was named Ernst Bucherer and he is pictured below with Rolex founder, Hans Wilsdorf in the 1950s. 

In 1976, Jörg G. Bucherer who represents the third generation took over as the head of Bucherer. 

Jörg expanded the business into Austria in the 1980s, and then into Germany in the 1990s. In 2013, Bucherer celebrated its 125th Anniversary by opening the worlds largest jewelry and watch store in Paris, France which is pictured below.

In 2016, Bucherer opened their most northerly store in Copenhagen, Denmark, which is also the largest watch and jewelry store in Scandinavia. Bucherer added four more boutiques in London, England in 2017 with the acquisition of The Watch Gallery. 

In 2018, Bucherer took over the American luxury watch store behemoth, Tourneau, which features 32 stores located access the United States. Tourneau has been a loyal Rolex watch reseller for many, many years. As a matter of fact the Tourneau ad below is from 1945.

1945 Tourneau Rolex Oyster Perpetual Bubbleback New York Advertisement pictured above

Bucherer today is the biggest watch and jewelry retailer in Europe. Bucherer's retail presence consists of 35 stores in Europe, with 17 stores in Switzerland, 10 stores in Germany, a flagship boutique in Vienna, as well as a store in Copenhagen and 6 boutiques in London, as well as the Paris store pictured and mentioned above. Below is a list of watch brands Bucherer sells today:

Jörge G. Bucherer agreed to sell Bucherer AG to Rolex which caught the horological world by surprise for an undisclosed amount of money. It is believed Bucherer annual Rolex sales represent around 4-6% of Rolex sales.

Jörg Bucherer pictured above in a recent photo

Jorg Bucherer (pictured above) is 87 years old today and in a recent press release Rolex said Bucherer's decision to sell to Rolex was made in the absence of direct dependents. Rolex's secret to success formula has remained the same for many decades, as they slowly and methodically keep consolidating and changing with the times, while remaining timeless with their principles and magnificently over-engineered Rolex watches which are all still made in Switzerland.

There are many unanswered questions people have been asking and certainly one of the most popular questions is "How will Rolex's acquisition of Bucherer effect allocation of Rolex watches both to Bucherer as well as to other Rolex authorized Rolex dealers?" I don't think anybody knows the answer to this yet, including Rolex themselves. The business reality is issues like this evolve over time, and many changes are unforeseeable.  We know Rolex has been struggling for years now to keep up with demand, which is why they are building a huge new factory in Switzerland, which is obviously a nice problem to have.

One More Thing

I founded Jake's Rolex World @ RolexMagazine.com and began chronicling Rolex's history sixteen years ago in 2008, and ever since then Rolex has been increasing in popularity. Rolex has been in business since 1906, and annual price increases have always been a reality. 

Over the past decade, Rolex used prices went up like crazy, as did the horological market as whole. Even through Covid, the resale market for Rolex continued to accelerate, which was not good for people who just wanted to purchase a nice Rolex watch. Around March of 2023, when Jerome Powell, the head of the Federal Reserve really began hiking up the previously lower interest rates, it had a chilling effect on new and used watch prices in general.

All of a sudden you could actually buy some Rolex models at retail, without having to be placed on a multi-year waiting list, and the price of used watches came down. Today, the new and used Rolex market remains strong, but many other brands and used watch resellers are suffering from the slow down, basically due to cheap money disappearing. Once again, this is good for consumers, but bad for used watch resellers. 

The only reason I bring this up is Rolex has been the great beneficiary of every market upswing and downswing in their history. In other words, when times are good, Rolex sells like crazy, and when times are not so good, Rolex still sells well, but the company has always taken these cyclical opportunities to overhaul and rebuild their core infrastructure. 

A concrete example of this was the during the quartz crisis in the 1970, when many mechanical watch companies got decimated, Rolex just kept consolidating and got way stronger. From all the signs I see, this is EXACTLY what is occurring with Rolex today, with their acquisition of Burcherer being a specific example...Long Live The King!!!!!

Below is a copy of the official Rolex Press Release titled "ROLEX ACQUIRES BUCHERER", which was announced on August 24, 2023 in Geneva, Switzerland.