Rolex retailers in Europe and the United States should be worried about the acquisition of Bucherer by Rolex, according to Michael Tay, group managing director of Singapore-based The Hour Glass, which has showrooms across Malaysia, Thailand, Vietnam, Hong Kong, Japan, Australia and New Zealand.
The Hour Glass is traded on the Singapore stock exchange and, unlike Watches of Switzerland Group, which saw a 25% drop in its share price when the Rolex acquisition was announced, its stock dropped by only 5% on the day.
Sat next to David Hurley, deputy CEO and president of Watches of Switzerland Group in America for a panel discussion hosted by Revolution magazine at Geneva Watch Days, Mr Tay said: “Put it this way: I am glad that I am neither a European or American Rolex retailer right now.”
He may have been half-joking and gently ribbing Mr Hurley, because Mr Tay went on to say that he does not expect to see significant changes to the way Rolex or Bucherer operate in the next five to ten years.
He did sound a note of caution for Rolex Official Retailers, including Bucherer, who will be held to the highest possible standards by Rolex.
“What retailers are going to be required to do is step up the quality of service. This will focus their attention on ensuring the consumers’ experience is up to Rolex’s standards,” Mr Tay said.
Watches of Switzerland Group issued a statement to the London Stock Exchange following news of the Bucherer acquisition in which it said Rolex had made assurances that the retail business would operate at arm’s length from the manufacturer.
Mr Hurley restated the point. “It is going to be managed independently, Rolex has made that very clear. It does not mean they are getting into primary retail or expanding,” he said.
Like Bucherer, Watches of Switzerland Group has been working with Rolex for a century (Goldsmiths in the UK, now owned by WoSG, started working with Rolex in 1919), and believes that relationship will endure, even in competition to Bucherer in Europe and the United States.
“Bucherer does a great job. It is a very innovative retailer that has done some exciting things since taking over Tourneau in the USA like refurbishing Time Machine in New York and TimeDome in Las Vegas into fantastic stores with a new brand line up,” Mr Hurley described.
Mohammed Seddiqi, chief commercial officer for Dubai-based Ahmed Seddiqi & Sons, says the deal was a smart move by Rolex to keep the business in the hands of a venerable Swiss institution. “It is better than having [Bucherer] acquired by somebody else,” he said.
Seddiqi owns and runs the largest Rolex boutique in the world within Dubai Mall.
Mr Seddiqi said that rival watch brands to Rolex, and are represented by Bucherer, have been told they have nothing to fear from the deal. “We met a few CEOs of brands that are represented by Bucherer, and they have told me that they received calls from Rolex a few months ago informing them that things will go smoothly,” he added.
Antoine Pin, head of Bulgari’s watchmaking business, told WatchPro the same thing when we met in Geneva. “There will be Chinese walls between Rolex and Bucherer,” he insisted.
There is precedent for this. Sephora, a global retailer of cosmetics and perfumes, is owned by LVMH but sells brands from all major luxury groups.
TimeVallee, owned by Richemont, retails watch brands from LVMH and Swatch Group.
Although none of the retailers on the panel are expecting changes in the short term, The Hour Glass’s Mr Tay did say it would be a constantly evolving situation, with Rolex rapidly learning from its new retail operation.
“This acquisition has given Rolex an incredible opportunity to get a sense of what the final client is looking for. If you think about the touch points they have with clients today, that is really centred around the digital domain. The last mile engagement with consumers is lacking,” he explained.