Watches of Switzerland Group: Market Value Plummeted after Rolex Acquisition

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Overview

The Watches of Switzerland Group experienced a significant decline in market value as Rolex announced its acquisition of a leading Swiss watch retailer. This move caused shares of Watches of Switzerland to slump by 27%. Bucherer, the company being acquired by Rolex, operates 100 outlets globally, spanning the U.S., the U.K., Germany, France, Denmark, and Austria. In response, Watches of Switzerland released a statement clarifying that Rolex’s acquisition is not a strategic entry into retail but rather a response to Bucherer’s succession challenges. The founder’s 86-year-old grandson, Jorg Bucherer, does not have any heirs. Additionally, Watches of Switzerland emphasized that its statement was thoroughly reviewed and confirmed by Rolex management at their Geneva headquarters as well as in the U.K. and the U.S.

Analyst Perspectives

Despite the official explanation provided by Watches of Switzerland, analysts remain skeptical. Eleonora Dani, an analyst at Shore Capital, believes that this acquisition marks a strategic move by Rolex to expand its direct-to-consumer sales efforts. Currently, Rolex only operates a single owned store in Geneva. However, Rolex stated in its own announcement that the Bucherer deal is not only advantageous for its brands but also for the wider industry. The statement further assured that Bucherer will continue to operate independently under Rolex’s ownership.


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