Watches of Switzerland shares plunge by a quarter after Rolex buys retailer Bucherer
The UK’s biggest seller of Rolex watches lost nearly a third of its value on Friday after the Swiss brand bought Bucherer AG, taking its first major step into retailing. Watches of Switzerland Group Plc shares fell as much as 30%, wiping out almost £500 million ($629 million) in market capitalization. Rolex unveiled the surprise move to buy Bucherer late Thursday, prompting analysts to question what the deal means for Watches of Switzerland’s future relationship with the brand. Peel Hunt’s Jonathan Pritchard noted that Rolex accounts for half of the company’s sales, and cut his rating on the stock to hold from buy. Rolex executives assured the UK’s biggest retailer of the brand that it will continue to be allocated watches by the same distribution system, Watches of Switzerland Chief Executive Officer Brian Duffy said in an interview. Source: Bloomberg
Watches trading at Premium above retail
While luxury watches secondary market prices are declining, most Rolex, Patek, and AP trade above retail prices. Source: Bloomberg