August is a quiet period for UK retail reporting, but the month proved volatile for the share prices of three shopkeepers as investors reacted to the negative read-across from corporate activity and updates from the US retail sector.

Watches of Switzerland’s (WOSG) shares plunged 27% to 499p on 25 August, a record one-day move, after Swiss luxury watch-maker Rolex agreed to buy retail partner Bucherer in a surprise move that reshapes the investment landscape for high-end timepieces.

For Watches of Switzerland, the worry is the tie-up will bring Bucherer better access to Rolex watches, while the acquisition paves the way for Rolex to expand its direct-to-consumer sales efforts. Watches of Switzerland said the Bucherer purchase is ‘not a strategic move into retail by Rolex’ and insisted ‘there will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition’.

Shore Capital says the investment case for Watches of Switzerland has long rested upon the assumption that Rolex would never transition towards a direct-to-consumer model. ‘However, the acquisition of Bucherer has shaken the foundations of this belief, raising numerous questions about the future dynamics of the market and Watches of Switzerland’s strategic position within it,’ it adds.

The broker notes Watches of Switzerland’s limited geographical overlap with Bucherer and says the deal does not fundamentally alter the need for consolidation in the US and European markets, ‘where substantial opportunities remain’.

JD Sports Fashion’s (JD.) shares cheapened 6.6% to 142.1p over the past week on a negative read-across after disappointing updates from Foot Locker (FL:NYSE) and Dick’s Sporting Goods (DKS:NYSE) raised fears over the health of the US consumer.

Yet Shore Capital said the read-across from Dick’s second quarter update (22 August) was ‘unwarranted’, since its lower profitability was mainly due to an unexpected higher provision for theft, a growing challenge for retailers in the US, as well as outdoor category markdowns.

Cost-of-living crisis winner B&M European Value Retail’s (BME) shares are up more than 30% in 2023 to date and have risen on recent hopes the discounter will benefit from the collapse of Wilko, which fell into administration earlier this month, putting the future of its 400 stores in doubt.

B&M was reportedly among the bidders for a significant portion of the Wilko brick and mortar estate. However, the share price has since pulled back after HMV owner Doug Putman and private equity outfit M2 Capital emerged as last-minute bidders for the former high street stalwart.

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