CORDER’S COLUMN: Bucherer has bought an e-commerce leader out of the box

WatchPro managing editor Rob Corder.WatchPro managing editor Rob Corder.

The acquisition of The Watch Gallery in March by Swiss luxury retail giant Bucherer looks, on the face of it, like a fantastic deal to buy market share in the UK.

Given that this country was the fastest growing market in the world for high end Swiss watches last year, this alone will have made the deal highly attractive.

The financial details of the sale have not been disclosed, but we have been told that The Watch Gallery’s turnover rose 42% in 2016, so expect the next accounts to show revenue of around £77 million (up from £54 million in 2016).

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We may never know the profit number for last year, and even the Companies House accounts for 2015, which said reported profit of £1.7 million require expert interpretation.

What financial accounts do not show is the future potential of a company.

The Watch Gallery’s revenue up until 2016 was relatively stable at around £50-55 million.

The Watch Gallery Turnover

Its only bricks and mortar store opening in the past five years has been in Covent Garden, and even that coincided with the closure of its luxury watch space in Manchester’s Selfridges.

Experts valuing the company’s future earnings potential might therefore think that 2016 could be the high water mark.

That would be wrong.

The Watch Gallery is the most advanced omnichannel luxury watch retailer in the world, and its chairman David Coleridge has been instrumental in that strength and can, should Bucherer wish, show them how to move in that direction as well.

Today, it is not possible to buy a single watch brand from Bucherer’s website. Its online sales are zero, despite promoting brands like Calvin Klein and Swarovski from its non-transactional website.

Mr Coleridge can change that, and make the Swiss retailer as powerful online as it is via its network of boutiques across Europe. If it achieves that, whatever price Bucherer paid for The Watch Gallery will have been a bargain.

Click here to read the full interview with David Coleridge ahead of the Bucherer sale.

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