Rolex Buys Bucherer

Starbucks didn’t destroy Indy coffee shops and Amazon hasn’t killed bookshops (at least not in major metros).

There is always going to be space for luxury watch dealers, especially since they’re often based on long term relationships and sometimes the place that sold you a Swiss watch also sold you your wife’s (or husband’s) wedding ring.

Rolex wants a cut of the second-hand luxury watch market and a leverage in negotiations with Watches of Switzerland and other retailers.

Rolex simply wants to further their control over their brand. There has been a feeling for some time that authorized Rolex retailers, by poor customer service and unauthorized practices have diminished the brand's value. By extending their reach into retail, Rolex can standardize and control customer service, reduce the unwanted stories of customers being treated poorly, and as a side benefit, control the signage, display and presentation at their retailer. It's a smart move.

Rolex has had issues for decades with authorized dealers who leverage potential buyers into buying other items, just to have a chance at buying the Rolex they want. Also dealers who sell high demand watches to friends or known resellers. A year ago if you could get a 126710BLRO on a jubilee you would pay around $14,000 after taxes, but could resell for $23,000 to gray market dealers. The prices have come down a lot, but you can still make around $6,000 if you can take delivery of this watch.

These games have hurt the brand, and Rolex is changing the game by buying a luxury retail chain that will likely specialize in getting the right watch to the right person and cut the gray market guys out. That along with their new secondary market for pre-owned Rolexs. It’s a brave move, and a lot of third party “investors” will likely lose a good deal of paper profits when the prices stabilize.