Baselworld fair

As a new generation of chief executives seeks to carve out a future for watchmakers, wide-reaching change continues to roll across the sector, upending long-held traditions — including key industry events like watch fairs.

Notable management changes last year that herald new direction for a number of labels include the appointment of Stéphane Bianchi as head of watchmaking activities for LVMH Moët Hennessy Louis Vuitton, owner of Tag Heuer, Zenith and Hublot. Bianchi, who will lead Tag Heuer with the chief executive officers of Hublot and Zenith reporting to him, succeeded watchmaking veteran Jean-Claude Biver. A well-respected industry leader, Biver stepped down from his operational duties  but will stay on as non-executive president of the division.

Kering, meanwhile, has signaled a new approach for Girard-Perregaux, appointing the ceo of Ulysse Nardin, Patrick Pruniaux, who is a former Apple executive, to head both labels.

Adding another woman ceo to its stable of high-end watches, Compagnie Financière Richemont last year named Catherine Rénier ceo of Jaeger-LeCoultre.

On the trade show front, two of the most important exhibitions for the industry, Baselworld and the Salon International de la Haute Horlogerie, known as SIHH, are realigning their strategies following a number of high-profile defections.

The upcoming year will be a transition of sorts, as the shows plan to change their timing to take place back-to-back in April and May starting in 2020, to enable fairgoers from around the world to tap into both events during just one trip to Switzerland. This year will mark the last time the rival events will take place in January and March.

SIHH, which is dominated by labels belonging to Richemont including Cartier and Van Cleef & Arpels, along with Kering brands Ulysse Nardin and Girard-Perregaux as well as Hermès — which defected from Baselworld — has traditionally served as the first major industry event, kicking off the year with a focus on exclusive, high-end brands. It takes place later this month, running from Jan. 14 to 17 in Geneva.

Swatch Group, the world’s largest watchmaker and owner of labels including Longines, Tissot, Breguet and Omega, threw Baselworld into disarray by pulling out of that show, which will take place this year from March 21 to 26. Criticizing the fair as ill adapted to changes disrupting the sector, Swatch’s announcement last summer prompted the resignation of the show organizer’s ceo, René Kamm. Under the direction of show director Michel Loris-Melikoff, organizers have taken a number of steps to address criticism, including negotiating hotel tariffs for people attending the event. The executive is also working on a strategy for the 2020 to 2022 shows, with details expected to be revealed near the end of January.

Swatch Group has said that some of its brands plan to meet with retailers this year in Zurich, about an hour’s drive from Basel, around the same time of the Baselworld fair in March.

Not immune to disruption, SIHH had news of its own, with Audemars Piguet and Richard Mille revealing plans to quit the fair next year. Both labels cited their changing relationship with clients as a key reason, with Richard Mille also pointing to the development of its own store network and Audemars Piguet noting its intention to forge closer and more direct relationships with end clients.

The speed and convenience of the Internet has dramatically changed how watchmakers reach and interact with consumers, offering a new channel for communication but also increasing competition to gain their attention in a crowded landscape. This, along with the rise of the Apple Watch, has added pressure to watchmakers to come up with new strategies to maintain relevance. As brands struggle to find the right distribution channels, the added transparency from online markets has further complicated matters.

Movado Group, which has licenses for brands including Juicy Couture, Coach, Tommy Hilfiger and Lacoste, pulled out of Baselworld over a year ago, opting instead to invite 300 guests to Davos for a four-day summit — at a cost of around 20 percent of what it spent on the fair, leaving funds to invest in digital channels.

While Swiss watch exports increased 7.1 percent through the end of November 2018, according to the Federation of the Swiss Watch Industry, analysts have noted a diverging performance from luxury watches compared to their inexpensive counterparts, which are not faring as well and tend to be more strongly affected by competition from the Apple Watch. Rogerio Fujimori, an analyst with RBC, has flagged his preference for Richemont — whose brands are focused entirely on luxury watches — over Swatch when it comes to investing in shares, for example.