The luxury Swiss watchmaker will sell direct to consumers at the HKRI Taikoo Hui mall, in Shanghai, according to Chinese media reports.
The store will be operated by Bucherer, the long-established watch retailer that was wholly acquired by Rolex last September, and will carry Bucherer branding. No date has been given for its opening
China is the second biggest market for Swiss watches after the US, accounting for $209m of exports in August.
But it is currently intensifying efforts to curb conspicuous extravagance, particularly through a crackdown on social media influencers who flaunt excessive wealth.
In addition overall sales of Swiss watches are suffering, according to the Federation of the Swiss Watch Industry, which describes the outlook for the rest of the year as negative.
Rolex dominates the Swiss watch market, with a share of more than 30 per cent. It has always relied on authorized dealers to manage its Chinese operations.
US Watch and Jewelry Sales in June: Biggest Monthly Increase for Two Years
Rolex Submeriner Date 41mm Oyster yellow gold
Watch and jewelry sales in the US picked up significantly in June, with their biggest single monthly increase in two years. The year-on-year increase was 6.2 per cent, according to the latest figures published by the US Department of Commerce. The last time we saw such an increase was in July 2022 (also 6.25 per cent). The trend for the last three months has been of continued growth, but at a slower rate (March 4.5 per cent; April 3.7 per cent; May 3.3 per cent). The rise in sales follows a year or so of almost relentless decline (October 2022 to October 2023). Revisions to figures for April and May by the Bureau of Economic Analysis (BEA) at the US Department of Commerce show sales were higher than initially reported. The year-on-year increase for April was 3.7 per cent (revised up from 2.7 per cent based on actual transactions rather than estimates) and for May it was 3.3 per cent (revised up from 1.4 per cent).
Swiss watch exports recorded a steep decline in March as demand in China and Hong Kong dipped below that of four years ago, during the height of the pandemic.
Shipments of timepieces slid 16% to CHF 2 billion ($2.2 billion) for the month, the Federation of the Swiss Watch Industry reported Thursday. The downturn followed a 3.8% fall in February, the first drop in more than two years, as appetite began to falter in Asia.
“Swiss watch exports recorded a sharp decline in March,” the federation noted. “China and Hong Kong accounted for a particularly high proportion of the trend. China suffered a decline…dropping to a level below that of March 2020, when the sector practically came to a halt in the middle of the month because of the Covid-19 pandemic. Hong Kong…saw a similar change.”
Supply to the US fell 7% to CHF 340.5 million ($374.5 million). In China, the federation’s second-largest market, shipments plunged 42% to CHF 150.2 million ($165.2 million), and in Hong Kong they plummeted 44% to CHF 148.1 million ($162.9 million). In Japan exports saw a 3.5% drop, while they slipped 3.6% in the United Arab Emirates (UAE). Decreases of 15% in Singapore, 13% in the UK and Germany, and 12% in France were closer to the global average, the federation explained.
Timepieces at each price point noted decreases. Watches that cost less than CHF 200 ($220) fell 19%, as did those priced between CHF 200 and CHF 500 ($550). Watches valued at CHF 500 to CHF 3,000 ($3,300) slid 38%, while those worth over CHF 3,000 decreased 10%.
For the first quarter of the year, exports went down 6% to CHF 6.08 billion ($6.69 billion).
Rolex remains the king of Swiss watches, with more than a 30 per cent share of the market in 2023, according to new research by the investment bank Morgan Stanley and consultants LuxeConsult.
“No other luxury brand can claim such a dominant position in its respective sector,” they say in a new report.
Rolex’s market share is more than next five biggest brands combined: Cartier (8 per cent), Omega (7 per cent), Patek Philippe (6 per cent) Audemars Piguet (5 per cent) and Richard Mille (3 per cent).
Rolex’s revenue for the year are estimated at $11.43bn (CHF 10.1bn). It sold an estimated 1.24m watches last year, at an average cost of $13,832 (CHF 12,218). Second-placed Cartier sold 660,00 watches at an average cost of $6,467 (CHF 5,712).
Total sales of Swiss watches last year returned to pre-Covid levels, up 7.6 per cent year-on-year to $30.23bn (CHF 26.7bn).
Rolex’s pending acquisition of watch and jewelry retailer Bucherer could fundamentally change the luxury watch industry, according to industry observers.
There’s concern and speculation throughout the industry regarding how the purchase will alter Bucherer’s relationship with its competitors, how it will affect “grey market” watch sales, and how it will influence Rolex’s relationships with its retailer network in the US, UK, and Europe.
In fact, the impact on Watches of Switzerland (WOS), Bucherer’s biggest competitor, was immediate, with its shares on the London Stock Exchange (LSE) plunging nearly 21% on the day after Rolex’s August 24 announcement.
WOS — which numbers more than 200 retail outlets, including 87 mono-brand boutiques — issued a statement on August 25 to reassure investors. Rolex will not have operational involvement in the Bucherer business, it will elect nonexecutive members to Bucherer’s board, and there will be no change to how Rolex allocates products, the retailer said.
Omega, Rolex’s closest competitor, issued a vaguely worded statement congratulating Rolex and Bucherer on the acquisition, pointing out that Omega generated nearly 40% of its sales from its own global network of stores.
“We do not have many points of sale within Bucherer’s stores, nor do we need many. There are also no current plans to increase that number,” the release read. “Naturally, we make regular adaptions and updates within our distribution network. However, our strategy is completely independent of other watch brands and is solely considered around Omega’s own planning.”
Bucherer operates more than 100 stores in Europe, the UK and the US. A total of 53 Bucherer stores distribute Rolex products and 48 offer the Tudor brand, Rolex’s sister company.
Rolex, in its brief statement about the acquisition, tried to assure the industry there would be no dramatic moves.
“Bucherer will keep its name and continue to independently run its business,” Rolex said. “The group’s management team will remain unchanged. The fruitful collaboration between Rolex and the other official retailers in its sales network will remain unchanged.”
Whether Rolex will manage to limit its influence is questionable, particularly in the long term, according to industry observers.
“Some people have faith the company can put up a firewall,” said Brendan Cunningham, professor of economics at Eastern Connecticut State University and founder of horolonomics.com, a website that specializes in the economics of the watch industry. “I don’t know how they are going to work that out. Over time there will be a temptation to do more through that relationship and leverage it a little more.”
“There is no reason Rolex will not push its watches into all 100 [Bucherer] stores,” added Alexander Linz of WatchAdvisor, a YouTube program about watches and the industry. “It won’t be tomorrow, but it will happen.”
In addition, this acquisition will likely allow Rolex to sell its most sought-after watches exclusively through Bucherer stores, Linz continued.
There’s also a belief that the move will affect online retailers of “grey market” watches — authentic goods that are sold through unauthorized sources — with Rolex having more control over its own distribution. Some authorized Rolex retailers give the most coveted Rolex timepieces to grey-market sellers, where they could get much more than the authorized price. Rolex wants to stop this practice.
“If the distribution process is in-house, they will have more tools to determine where their watches are going and to mete out consequences if people are doing what they are not supposed to be doing,” Cunningham observed. “It’s kind of a tough situation for Rolex because it can either cancel the distribution agreement or deal with the reputational impact when it happens. If something like that happens at Bucherer, you can do your own investigation and get rid of people responsible.”
Another area where the Rolex-Bucherer arrangement could provide leverage over other retailers is through used-watch sales. Bucherer was the first retailer to be approved for the Rolex Certified Pre-Owned (CPO) watch program, in which Rolex provides a certificate of authenticity, a two-year warranty and a wax seal tag for an approved pre-owned Rolex.
“The way it used to work is that Bucherer would send pre-owned watches for a once-over and service,” Cunningham explained. “They would charge Bucherer, and Bucherer would add it to the price. These transaction costs don’t have to happen anymore. That could make the Rolex CPO program at Bucherer a stronger competitor for the secondary market.”
One of the main unanswered questions is how this acquisition will affect the long-term relationships with its authorized dealer network. Rolex retailers include large luxury watch chains like WOS, German-based watch and jewelry retailer Wempe, and US luxury jewelry retailer Ben Bridge. However, the majority of its retail partners are independent retailers, many of whom depend on Rolex for a significant portion of their sales and as a way to attract people into their stores.
“I’m sure the authorized retailers are wondering, ‘What does this mean for us?’ I’m assuming those conversations, if they haven’t started already, are going to start soon,” Cunningham pointed out. “At a minimum, it puts folks on notice to have a ready alternative for distribution and maybe it will get some dealers to tighten up their businesses a little bit. Rolex is important to any retailer that has that dealer agreement. I’m sure having Rolex increases foot traffic.”
France’s finance ministry is auctioning off customs contraband in an “extraordinary sale” featuring platinum bars seized en route to the UK, designer handbags, valuable historic coins, several collections of uncut diamonds and 2,016 bottles of vodka.
The 350 lots – valued collectively at about €1m – also include a Volkswagen Golf stopped at France’s border with Spain and found to contain 480kg of cannabis resin.
A white gold Rolex set with 40 rubies, with a catalogue estimate of €15,000.
More than 1,200 potential buyers have signed up to take part in the auction, which will be held in the finance ministry at Bercy in Paris.
The 14 platinum bars weighing 1kg each and stamped “Crédit Suisse” were reportedly discovered by French customs officials in the baggage of two people travelling to the UK who claimed they were working for a Paris business. Each ingot is for sale at a starting price of €22,000.
One of the 14 platinum bars up for auction.
Seized items detailed in the catalogue also include gold sovereigns bearing the heads of the British monarchs Elizabeth II, Victoria, Edward VII and George V, as well as several gold “Napoléons”.
Among the luxury goods up for auction are Louis Vuitton, Chanel, Fendi and Valentino handbags and several expensive watches including a white gold Rolex set with 40 rubies – catalogue estimate €15,000 – as well as perfumes and a pair of Bottega Veneta shoes seized at Nice airport. The uncut diamonds, being sold in several lots – one of which is listed as totalling 197.95 carats – were seized at Paris airports.
Certain items will be sold only to professional buyers for security or legal reasons, including three and a half pallets of Grey Goose vodka bottles, listed with a starting price of €10,000.
Three and a half pallets of Grey Goose vodka bottles are listed with a starting price of €10,000
The finance ministry said the sale reflected “the diversity of objects seized by customs officers”.
“The customs service battles daily against all illegal traffic that threatens our territory and our society in order to protect citizens and the environment,” it added.
