Swatch Group is the latest major watch company to pull out of the Baselworld exhibition, following the decision last year by Movado Group.

What next for Baselworld?

With the news Monday that Swatch Group, the world’s largest watch company and Baselworld’s largest exhibitor, is pulling out of the fair, the question becomes what its organizers do next. Swatch owns not only the famed inexpensive watch brand, but also Longines, Tissot, Breguet and Omega.

“Today everything has become more transparent, fast-moving and instantaneous. Accordingly, a different rhythm and a different approach are needed,” Swatch Group said in an e-mailed statement.

So far, other companies have signaled their intent to stick with the event, including Breitling and LVMH Moët Hennessy Louis Vuitton, another show heavyweight with brands Hublot, Zenith, Bulgari and Tag Heuer. In addition to attending Baselworld in March, the group has for two years parked a boat on Lake Geneva to tap into the flow of fairgoers at rival fair Salon International de la Haute Horlogerie, or SIHH, which takes place in Geneva in January and features mainly the brands owned by LVMH’s rival Compagnie Financière Richemont SA.

Analysts noted Swatch’s move came amidst a backdrop of change in an industry that increasingly reaches consumers through digital avenues.

“Swatch leaving Baselworld looks like an existential blow for the fair — even if major groups like Rolex, Patek Philippe and LVMH are still planning to exhibit there. The more brands organize to distribute directly, the less a fair is required. While we are still far from watch brands being vertically integrated into their own retail, this may be the scenario some of the groups are working towards for the future,” said Luca Solca, head luxury analyst at Exane BNP Paribas.

Organizers of the event have struggled to adapt to changes in the industry, with around half of exhibitors opting out of this year’s edition of the splashy fair, casting a cloud on the show’s future. In a high-profile example, Hermès switched to SIHH.

Movado Group, which has its own brands as well as licenses for Juicy Couture, Coach, Tommy Hilfiger and Lacoste, pulled out of this year’s show, too, opting instead to use the funds to invite some 300 guests to Davos for a four-day summit. Executives said the cost of the Movado event would only come to 20 percent of what the group normally spent on Baselworld, where brands set up elaborate booths, stretching up to two stories with scores of meeting rooms and lounges. Movado planned to use the remaining funds to invest in digital channels.

Show organizers had acknowledged the change from a place where order books were filled, and have been focusing on its role as a communications platform.

“I’d expect significant changes down the road in how this fair will work. More practically and shorter term, two watch fairs seem a bit too much for clients to come to Switzerland and attend. I wonder if more imaginative work is required on making the calendar more customer friendly, i.e., moving Baselworld to coincide with the SIHH? I wonder. It is still a fluid situation,” noted Solca.

In its statement, Swatch Group added that annual watch fairs need to be reinvented, noting that they are “failing to do so,” and taking a swipe at MCH Group, suggesting disagreement with show organizers.

“The MCH Group, which organizes Baselworld, is clearly more concerned with optimizing and amortizing its new building — which, incidentally, is largely financed by the watch industry during the fairs — than it is in having the courage to make real progress and to bring about true and profound changes,” it said.

Show organizers hit back in a statement Monday, outlining a host of new measures, such as bringing a range of food options, including a high-end restaurant, into the center of the show and offering a catwalk for jewelry presentations with a number of LED screens.

MCH Group in May had revealed the departure of longtime show director Sylvie Ritter, replacing her with Michel Loris-Melikoff, who took over in July.

At the time of the announcement, Loris-Melikoff said he would focus on the show as a marketing and communications platform, pledging new concepts for watches and precious stones.

“We extraordinarily regret Swatch Group’s decision. 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 [spirit] and many new ideas,” said MCH Group’s chief executive officer, René Kamm.

Among changes planned for the 2019 edition, independent watchmakers will present pieces in Hall 1 South, which was not used last year. An exhibit on watchmaking will be set up in Hall 1.1 and jewelers will be brought downstairs to Hall 1.2.

Loris-Melikoff also said discussions had been held with the city’s hotel and restaurant industry in order to guarantee “a reasonable price level.” The chatbot from the 2018 edition will be expanded into WeChat to cater to an Asian audience.

The show director added he had taken input from exhibitors into consideration when presenting ideas, and that a high-ranking manager from Swatch Group was present at a meeting of the board of exhibitors. Swatch executive François Thiébaud, who heads the Tissot brand, was known to preside over the exhibitors’ committee.

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