The stakes are awfully high. Baselworld, the largest watch and jewelry show, kicks off this year’s edition intent on survival as new management seeks to chart a future for the event.
Returning industry heavyweights include market leader Rolex; brands belonging to LVMH Moët Hennessy Louis Vuitton: Bulgari, Tag Heuer, Hublot and Zenith; Patek Philippe, and Chanel.
But this will be the first time the show takes place without Swatch Group and its vast stable of brands that includes Omega, Longines and Blancpain, following last year’s bombshell announcement that the group would pull out of the fair — prompting a management reshuffle at the highest ranks of show organizer MCH Group.
Running March 21 to 26, this will be something of a transition year as the event moves to April in 2020 to follow on the heels of Geneva-based SIHH, a high-end fair dominated by labels from Compagnie Financière Richemont.
The coordinated calendar shift was one of the most notable moves since the arrival of Baselworld’s new director, Michel Loris-Melikoff, and is meant to allow visitors from abroad to attend the events with just one trip to Switzerland — bulking up the numbers of each event by tapping into one another’s attendee flows.
Both shows — along with the industry they represent — are struggling to adapt to the shifting landscape. Competition from smartwatches, notably the Apple watch, has challenged traditional players, particularly in the lower price ranges, and the rise of digital channels makes it easier for brands to communicate directly with consumers and retailers, casting doubt on the necessity of splashing out on lavish trade fair events. Watch houses are known to pull out all the stops to draw visitors to their elaborate booths — three-stories high at Baselworld; with fountains, trees and even an airplane at SIHH — offering Champagne and access to celebrities or star athletes.
Baselworld’s teams are under pressure to stem departures and bring exhibitor numbers back up — they dropped by nearly half last year to 650 — by finding ways to ensure relevance.
Management is betting on improved working conditions, more food and a fresh injection of showmanship — amusement for visitors, not to mention fodder for digital channels.
“The basic rule of the events activity is to create emotions…and we are bringing exactly this philosophy to Baselworld — surprise your guest, grab them through emotions,” Loris-Malikoff told WWD.
An events veteran formerly in charge of Switzerland’s largest techno-parade, Loris-Malikoff was recruited last May to succeed Sylvie Ritter —who had held the position for 15 years — shortly before Swatch made its departure announcement, which came as a shock despite the rapidly shrinking exhibitor base.
Show critics say it has been slow to adapt to changes in the industry and, pushing up prices, favors the larger players — most of which sit prominently at the entrance of the vast exhibition halls.
Industry veteran Peter Stas, president of Frédérique Constant, a label he established with his wife Aletta Stas-Bax and later sold to Citizen, is an example of a defender of the smaller players, and has said that over the years, the fair concentrated too much on its largest exhibitors — the ones with deep pockets — pushing them to make bigger and bigger stands. In his view, the system stifled smaller players while causing prices to spiral — until they reached unwieldy levels, too much even for big companies.
There is also the question of jacked-up hotel and restaurant prices — one of the first challenges tackled by Loris-Malikoff, who secured an agreement with a number of hotels in Basel to set maximum rates and this year is keeping them at the same levels as in 2018.
The challenge is ongoing, however, as shown by comments on March 14 from Swatch Group chief executive officer Nick Hayek, one of the industry’s famously outspoken figures, which sent MCH Group shares down 3 percent at one point that day.
Asked about Baselworld taking place without Swatch, Hayek sounded a combative note. “They have to do without Swatch Group, we have never…needed Baselworld on the contrary — now I can work and I can talk to the consumers and know what they need,” said the Swatch chief, speaking at the company’s annual results presentation at its freshly inaugurated futuristic headquarters in Bienne, Switzerland.
“I perfectly respect his decision — I was in contact with Nick Hayek several days ago — it’s a decision that is his alone,” said Loris-Melikoff, speaking to WWD the following day.
The executive launched into his argument for grouping together.
“Now imagine if all the brands start to embark on their own road shows here and there — what I’m hearing from a lot of retailers is that they are saying, ‘Listen, guys, stop having events every two or three weeks — we need to work, to sell watches, we don’t have time to attend all these road shows,” he said.
Movado is one company that has struck out on its own. It quit Baselworld two years ago and took its namesake label — and recently acquired Olivia Burton and Mvmt, along with the timepieces it makes for other brands, including Lacoste, Coach, Tommy Hilfiger and Ferrari — to its own event for clients at Davos, the Swiss mountain resort.
“We got tremendous positive feedback and how could you not with this beautiful setting behind us?” said ceo Efraim Grinberg in opening remarks at this year’s event, held at the futuristic Intercontinental hotel with sweeping views of snow-covered mountains. A few journalists were also invited this year.
The ceo has said that the cost for Movado of holding its own event came to a small proportion of the fair expenses — around 20 percent — freeing funds to invest elsewhere. Speaking to WWD, he confirmed the same levels this year.
“The same figures that we used last year are applicable and we continue to invest in our consumer-facing initiatives, like starting a digital center of excellence that is now up and running and has been yielding really strong results for us as a company,” he said. The company is upgrading a good deal of its online infrastructure — the web sites — as well as taking on projects related to data collection and analysis, along with improving digital marketing expertise, moves he expects will “yield a lot of results in the future.”
In a challenging environment for mall retailers, Grinberg has doubled up on efforts to improve the store experience.
“I have to work really closely with our retailers on their brick-and-mortar installations and making those feel like the 21st century,” he said, citing as examples screens that give information on the merchandise.
“To me, you have to create excitement at the point of sale and that’s one part of the omnichannel perspective,” added Grinberg.
In the last two years, Movado bought two private watch and accessory companies — Mvmt, a Los Angeles-based watch and accessories company founded and run by Millennials Jake Kassan and Kramer LaPlante, and London-based Olivia Burton.
“One reason that Mvmt and Olivia Burton were so exciting is that the level of content they were able to produce is at a different magnitude than what traditional watch companies are used to,” Grinberg said.
Asked if he might reconsider the exit from Baselworld, Grinberg left the options open.
“I can’t say never, but I think we’re happy with what we’re doing right now. And I don’t see that changing for the short term,” he said.
“We have to see if our customers and our retailers are happy with what we’re doing, so far the feedback is that they’re happy,” he added.
The calendar switch, of course, may shift priorities for the label’s guests, as well as the possibility that such events could multiply.
“It is much more efficient to come for two or three days, and that’s what Mr. Biver had told me last year after Baselworld — that it’s much more efficient to have these meetings at a precise moment in a certain place, you can do 50, 60, 70, or more than a hundred meetings and if you had to do a trip for each one, you would be spending the entire year all over the planet,” said Loris-Malikoff, referring to Jean-Claude Biver, a respected industry leader.
Biver stepped down from his operational duties at LVMH’s watchmaking activity late last year, signaling another important generational change in the industry, even if he has stayed on as non-executive president of the division. His successor, Stéphane Bianchi, who leads Tag Heuer with the ceo’s of Hublot and Zenith reporting to him, will be on hand at Baselworld.
“I believe that today, if you will, the future of Baselworld is to offer ideal conditions to everyone involved…we, as organizers, need to take care of everyone involved in this community and offer them working conditions and to make their trip to Baselworld as pleasant as possible,” said Loris-Malikoff.
It may also come down to logistics.
“In terms of efficiency, it’s best to come to one fair,” he said.