CORDER’S COLUMN: Rolex should remember its charitable status

Rob Corder, managing editor, WatchPro and managing director of Promedia. (Photo by Ausra Osipaviciute/ITP Images)

It is not the job of the Hans Wilsdorf Foundation, the charitable trust that owns Rolex, to be charitable to its competitors. Its role is to make money that can be dispersed to good causes; indeed its tax free status depends on this pledge.

The world’s biggest traditional watchmaker wants to stay that way, and has the support of thousands of retail partners around the world committed to throw their weight behind the cause.

The two biggest partners, Lucerne-based Bucherer and Leicester (UK)-based Watches of Swtizerland Group (formerly known as Aurum Holdings) are retail giants on their own missions to expand, particularly in the United States. Recent acquisitions by these groups include Mayors in Florida, Tourneau, which has boutiques across the United States, showrooms within the Wynn Resort in Las Vegas and Baron & Leeds with outlets in California and Hawaii.

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The destinies of Watches of Switzerland Group, Bucherer and Rolex are bound so tightly together that neither of the retail groups would risk major strategic acquisitions without first checking it is okay with Rolex. Every acquisition has been for businesses with multiple Rolex authorised dealer accounts, and those deals would not have gone ahead if there was any danger that the accounts would be withdrawn.

They tolerate this — in fact they celebrate it — because no brand comes close to delivering the pulling power of Rolex. Having Rolex defines a store to its customers, has customers racing to buy or join a waiting list for the latest models that are always in short supply, and relegates every other competitor in a 50 mile radius to second best status.

In good times, even competing brands to Rolex have not been too distressed. Rolex brings affluent customers into stores and kindles their love of prestige watches. Other brands like Omega, TAG Heuer and Breitling ride on the coat tails.

Rolex sales are up this year in most territories and they’re gobbling up market share at the expense of rival Swiss brands. The question is whether a brand with monopoly power is healthy for the market. If not, Rolex may need to remember its more charitable instincts and leave a little more space for competitors.

Authors

One Comment;

  1. Dan Friedman said:

    Socialist sour grapes. Rolex has earned its status in the luxury market. It’s no more a “monopoly” in the watch arena than Mercedes is in autos. Their charity status is another matter. But after almost a century no one I know of – including the author – has ever provided any proof they have violated their charter.

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