Story Highlight
– Rolex retired Carl F. Bucherer after acquiring Bucherer.
– Damiani Group bought Baume & Mercier from Richemont.
– Baume & Mercier faces challenges in desirability, not distribution.
– Luxury watch segment struggles against fashion and affordable brands.
– Pessimistic outlook suggests Baume & Mercier may face closure.
Full Story
The recent acquisition of the Swiss luxury retailer Bucherer by Rolex has resulted in the discontinuation of the Carl F. Bucherer brand, which has roots dating back to 1888. Despite its rich heritage and the production of in-house movements since 2008, along with a diverse collection ranging from £4,000 automatics to extravagant tourbillons priced in six figures, the brand did not meet the commercial expectations of Rolex, leading to its demise.
In a parallel development, the Damiani Group’s takeover of Baume & Mercier, established in 1830, raises questions about its future, particularly considering the tumultuous fate of Carl F. Bucherer. While optimism surrounds this new partnership, the potential for longevity appears uncertain.
Damiani operates approximately 140 retail outlets globally, alongside 45 franchised locations. Notably, it does not currently engage in watch sales. However, the group also owns Rocca, a chain that features fine jewellery and prestigious watch brands, which include household names such as Tissot, Rado, Omega, and Cartier, with 38 boutiques primarily located in Italy.
According to Richemont’s announcement regarding the sale, Damiani aims to elevate Baume & Mercier’s market presence by utilising its extensive distribution network and strategically opening new mono-brand shops. The transitional phase will see Damiani manage retail and wholesale activities for Baume & Mercier, while Richemont continues to provide operational support. The terms of this financial transaction, anticipated to finalise this summer, have not been revealed.
Experts, however, speculate that the financial arrangement may favour Richemont more than Damiani or Baume & Mercier. Armando Zuccali, CEO of Gag London Equity Capital, notes that Richemont has intentionally narrowed its mid-range market presence in recent years. He characterises the €2,000 to €5,000 segment, where Baume & Mercier competes, as increasingly problematic—too costly to rival fashion watches while lacking appeal to serious collectors.
Zuccali argues that the primary hurdle for Baume & Mercier is not distribution but rather creating desirability. Although the brand has reported sales of CHF 69 million in 2024, with a global presence of nearly 1,500 points of sale, its offerings are becoming less distinctive. For instance, the Riviera, a notable sports luxury model, is priced at £2,675, while competitors like Christopher Ward offer similar options at significantly lower prices, prompting consumers to reconsider their purchases in light of economic pressures.
There are various potential futures for Baume & Mercier under Damiani’s stewardship:
1. **Optimistic Scenario**: Baume & Mercier successfully repositions itself as ‘the Italian brand of Swiss watchmaking’. By leveraging Italian design and fashion, together with strategic price reductions and enhanced distribution, it establishes a sustainable niche in the market, although it remains relatively small.
2. **Realistic Scenario**: After a period of trying to expand the brand, Damiani may find the necessary investments too burdensome, resulting in a conservative management approach where limited models are produced and the brand’s presence is maintained at a low profile.
3. **Pessimistic Scenario**: In the longer term, Baume & Mercier may be resold or, in the worst case, shut down entirely. Collectors, in years to come, may turn to vintage pieces as historical artifacts rather than viable contemporary purchases.
Given the competitive landscape of the watch industry, including the impact of brands from Japan that offer quality at a significantly lower price point, there is skepticism surrounding Baume & Mercier’s future. The overarching theme from analysts like Zuccali highlights a trend where luxury watchmakers are challenged by a market that has become over-saturated, compelling them to rethink their strategies.
With Rolex opting to divest its weaker brands while still maintaining a strong portfolio, it remains to be seen if Damiani’s entrance into watchmaking will yield a different outcome for Baume & Mercier in the years ahead.
