Two weeks ago, on April 14, Baselworld’s parent company MCH Group took note “with great surprise […] of the cancellation of major exhibitors at Baselworld,” namely Rolex, Patek Philippe, Chanel, Tudor, and Chopard. Two years before that, on July 30, 2018, the company’s former CEO René Kamm was already caught off guard by Swatch Group’s decision to leave the show: “The cancellation is all the more surprising for us because this news reaches us at a point in time when new management has arrived with a new team, new esprit and many new ideas.” In both cases, the company’s unfiltered public display of surprise was followed by the desire to either directly “contradict the representation” (July 30, 2018) of its former clients, or, more recently, by questioning the intentions of the aforementioned five brands. MCH Group’s latest response (April 14, 2020): “The MCH Group must therefore conclude that the relevant plans [to leave Baselworld] have been in preparation for some time and that the discussions concerning the financial arrangements for the cancellation of Baselworld 2020 are now being put forward as an argument.”
The company’s reactions were remarkable for two reasons:
- Firstly, in a consensus-driven society like Switzerland, you rarely see a supplier publicly react as confrontational as this: the Swiss, already used to having one of the world’s oldest democracies, simply don’t like to burn bridges, especially if there is no proof.
- Secondly, a company usually aims to understand the needs of its key clients if it wants to stay relevant. In this case, the element of “surprise” should have been reserved for events like the government’s decision to announce an “official ban on large public gatherings” (February 28, 2020), which resulted in the MCH’s decision to postpone the show for the first time in its history (which dates back to 1917).
Almost as surprising as Baselworld’s PR strategy: the show’s evolution (or lack thereof) had prompted even a company like Rolex to make a public statement, something that barely ever happens: “We have taken part in Baselworld since 1939,” said Jean-Frédéric Dufour, CEO of Rolex SA and board member of Montres Tudor SA, in the announcement from April 14. “Unfortunately, given the way the event has evolved and the recent decisions made by MCH Group, and in spite of the great attachment we had to this watch show, we have decided to withdraw.” Thierry Stern, president of Patek Philippe, even added: “Today, Patek Philippe is not in line with Baselworld’s vision anymore, there have been too many discussions and unsolved problems, trust is no longer present.”
In the next blow to the Baselworld fair, LVMH, parent company of TAG Heuer, Hublot, Zenith, and Bulgari, announced on April 17 its intention to also leave the show for good — a decision that is ultimately forcing the current management to make “a decision on the continuation of Baselworld and on investments in its further development in the next few weeks.”
In short, while the city of Basel is potentially going to lose another large exhibition with an estimated 80,000 people visiting (in 2019, the Schweizer Mustermesse Muba, from which Baselworld originated, finally had to close after 103 years), Geneva is rapidly becoming the world’s watchmaking capital: Rolex, Patek Philippe, Chanel, Chopard, and Tudor will establish a new watch trade show in Geneva. The debut of this show will take place in early April 2021 at Palexpo in Geneva, concurrently with the first edition of Watches & Wonders Geneva, formerly known as the Salon International de la Haute Horlogerie (SIHH), organized by the Fondation de la Haute Horlogerie (FHH). Geneva is already the home of important events like the Grand Prix d’Horlogerie de Genève (GPHG), the Salon EPHJ and the biannual Only Watch Auction, and also home to several watch groups, brands and affiliated organizations.
Simultaneously, the FHH has announced the launch of a new online platform on April 25, 2020 at watchesandwonders.com, featuring “30 of the world’s leading fine watch brands”, in order to showcase “the watchmaking universe, as well as the newest watch introductions for 2020.” Ironically, Baselworld has been working periodically on a similar digital platform for more than 10 years: “The MCH Group decided last year  to invest substantial sums in the further development of Baselworld and in the establishment of additional digital platforms.”
In short, there aren’t that many options left for Baselworld:
- Trade-show organizers have already been dealing with troubling numbers, years before COVID-19. While it currently doesn’t appear that there is going to be enough space for two large Swiss shows in a declining market, there might still be room for a comparatively smaller (and less expensive) jewelry or luxury show based in Basel. A digital platform can certainly work, most likely not using Baselworld as a brand, but both business models will be challenging for MCH in terms of profitability.
- Smaller regional shows that focus on end-consumers and experiences, like WatchTime New York and Los Angeles, or the Dubai Watch Week, have already been on the rise for a couple of years. With Watches and Wonders Miami (and previously Hong Kong), Baselworld will have a hard time to set up another show outside of Switzerland.
- Brands like Breitling (frequently organizing so called “summits”), and the six Swatch Group members — Blancpain, Breguet, Glashütte Original, Harry Winston, Jaquet Droz, and Omega — having introduced Time to Move in 2019, have already been working on establishing their own independent formats. Given the rivalry between Geneva and other watchmaking regions in Switzerland, it is unlikely that the Swatch Group will consider joining the new show in Geneva (nor return to Basel), but smaller players and independent brands will certainly try to benefit from a global show in 2021, officially or inofficially. The biggest questions will be how open the new show will be, especially to non-Swiss watch brands — e.g. Grand Seiko, Casio and Citizen — and how these heavyweights will adjust.
- The four LVMH brands TAG Heuer, Hublot, Zenith, and Bulgari have already been present in Geneva in the previous years, and the group will either continue to build the “LVMH Watch Week” and/or return to be present in Geneva in 2021 (the group is also planning to host the Geneva Watch Days 2020 this summer (August 26 – 29).
More than ever, the luxury watch industry needs a strong global platform to promote watchmaking. The latest numbers from the Federation of the Swiss Watch Industry (FH) offer more than proof:
“Swiss watch exports fell sharply in March , decreasing by 21.9% to 1.4 billion francs. Although very marked, the decline was nonetheless lower than the drop in sales in some of the main markets. A deterioration is expected in April. The fall in volumes (-43.1%) is more representative – on average – of the real state of the watch market. Steel watches saw one of the steepest declines in value, […] which fell by almost half. The number of watches exported fell by almost 700,000 in March, producing an unprecedented monthly figure of 900,000 units.”
Regrettably, Baselworld clearly missed its chance to defend its unique position in the global watch industry in the last couple of years, while more agile players like the FHH stepped in with new ideas. It remains to be seen if this new setup will be open enough to better unite the different players of the watch industry (which doesn’t stop with A. Lange & Söhne as the only non-Swiss brand currently exhibiting in Geneva). And let’s hope Geneva will be a more hospitable city than Basel, once significantly more people will travel to the second-most populous city in Switzerland (which logistically shouldn’t be an issue, since more than 600,000 visitors are already attending the Geneva Car Show).