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Bloomberg

For the second year in a row, the big story at Baselworld, the world’s largest watch and jewellery fair held each year in Basel, Switzerland, was the show itself.
Last year, when the number of exhibitors dropped by 50 per cent, Baselworld was fighting for its life. It still is.
Baselworld 2019: Patek Philippe and Rolex confirm watchmaking’s green tide
All the leading indicators at the 2019 event, held from March 21 to 26 were down: the number of exhibitors was down 20 per cent to 520; visitors were down 22 per cent to 81,200; and media representatives were down 12 per cent to 3,300.
The smaller, sparser show was a shock to many visitors.
“Welcome to Baselworld Lite,” one United States brand manager of a Swiss brand said as I approached his booth.
We were in a downward spiral. The whole format of Baselworld has to be changed
Michel Loris-Melikoff, show director, Baselworld
There is one huge difference, though, between this year and last year.
This year Baselworld has a new management team determined to radically revamp the show for the digital age. They have introduced some changes this year. The big ones come next year in a fierce bid to save the 102-year-old show.

Whether the new team can do that depends on decisions that Swiss watch CEOs make over the next few weeks about whether to return next year.
Show management is pitching to not only current exhibitors, but the 1,000 that have left over the past three years.
As an incentive, Baselworld announced on the last day of this year’s show a new price structure that will reduce fees for exhibition space by 10 per cent to 30 per cent next year.
SIHH and Baselworld unite behind April 2020 dates – making life easier for visitors
The 2020 show has cleared one crucial hurdle: the show’s two top anchor brands – Rolex and Patek Phillipe, without whom it cannot survive – have indicated that they support the new management’s long-term plans and will return.
Thierry Stern, president of Patek Philippe, said during the show that the Swiss luxury watchmaker will be back. And, in a major show of support, Rolex, another Swiss luxury brand, signed on for four more years during this year’s show, exhibitors reported.

The vote of confidence by Switzerland’s two most prestigious watch brands will reassure smaller firms, who still rely on the show for a large percentage of annual sales, and will certainly be back. So will long-time show supporter Chopard, sources say.
(So far, no brand has made any public statement about the 2020 show. Show director Michel Loris-Melikoff, at the closing press conference, said the fair would have no comment about which brands would return. He said he would leave it to the brands to make any announcements.)
Top 11 timepieces for men at SIHH 2019
Rolex and Patek are great brands to have for Baselworld 2020, for sure. But, for Baselworld to rebound, it needs to hold onto other top brands already there and lure back the defectors. One measure of the problem is that only 85 Swiss watch brands exhibited at this year’s fair, compared with 175 two years ago.
The decisions for players big and small will be based on several factors.
Vision 2020+

Chief among them are the dramatic changes planned for next year.
“We were in a downward spiral,” Loris-Melikoff said during the show. “The whole format of Baselworld has to be changed.”
The new management’s new concept is to transform Baselworld from a classic business-to-business trade fair into an “experience platform”.
The objective is to make Baselworld the most important event for the global watchmaking and jewellery community. That community embraces not just industry professionals, but all interested parties, including collectors, aficionados and auction houses.
“The target is to offer all participants a digital platform with numerous information, service and networking tools throughout the year,” Baselworld said.
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A video explaining the new concept, called Vision 2020+, was shown exclusively to exhibitors during the show in a presentation room called the “Blue Room”.
It outlines a number of innovations that will come in 2020, such as live streaming of events, seminars and conferences (for example, a retailers’ summit and CEO talks), new show areas for new products and exhibitors (including smartwatches and wearables), and a multilateral, digital exchange platform for the community, available 365 days a year.

Baselworld will also offer new services to visitors, such as an e-concierge service, allowing them to book their trips to Basel (including travel, hotels, restaurants and sightseeing) through the fair.
Management envisions changes to the show infrastructure, including more open, visitor-friendly booth designs, which will be cheaper for exhibitors to construct and store.
More details will come later, Loris-Melikoff says.
The 2020 show will be the first stage in what he foresees as “a three-year period of transformation” to reinvent Baselworld for the digital age.
The cost factor

Baselworld is notoriously expensive for everybody who attends, but especially for exhibitors. It’s a major factor behind the severe exhibitor erosion over the past few years. And a major consideration on whether to return.
The Swatch Group, the world’s largest watch company, which pulled its 17 brands out of Baselworld 2019, reportedly spent 40 million Swiss francs (about US$40 million) to participate in the show. Those costs include booth space and construction fees, staffing, lodging, food and client entertainment.
LVMH’s four brands spend around 20 million Swiss francs, an LVMH executive said. The owner of a medium-sized brand with a booth at the rear of the second floor of the watch hall, said he spends 6 million Swiss francs to participate. “It’s a lot,” he said.
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Baselworld is addressing the issue with the new, reduced pricing structure for exhibition space. Efforts this year to work with hotels and restaurants to prevent price gouging during the six days of the show kept a lid on prices somewhat.
Yet many visitors remarked that, as one put it, “It’s still Baselworld prices here”. Inevitably, the combination of Switzerland’s strong franc and the surge in demand for hotels and restaurants during Baselworld make it an expensive trip.
Alternative events

Exhibitors will measure the costs against various alternatives to Baselworld.
Some companies, for example, held their own exhibitions in Switzerland timed to coincide with Baselworld.
The Movado Group, with its 11 watch brands, held a three-day “summit” in Davos, Switzerland just before Baselworld. Customers, distributors and press from 40 countries, 500 in all, attended. Efraim Grinberg, chairman and CEO, said that he used to spend US$10 million to exhibit at Baselworld.
He spends a bit more than US$2 million on the Davos event, now in its second yearn and plans to hold his own event again next year.
Likewise, the Swatch Group held an event in Zurich at the headquarters of Hayek Engineering during Baselworld for customers of its six luxury watch brands.
Meanwhile, at two hotels on the Baselworld fairgrounds, numerous small, independent watch brands set up shop in the hotel lobby, ballrooms and guest rooms.
Observers estimated their number at more than 100 (more than the number of Swiss watch brands inside the fair!). Among them was H. Moser & Cie.
5 impressive watches from this year’s Baselworld
Edouard Meylan, the brand’s CEO, said it would have cost him five times as much to exhibit inside Baselworld than at the Hyperion Hotel, just a hundred yards (metres) away from the fair entrance.
The Movado Group used to spend $10 million at Baselworld. Now it hosts 500 guests in Davos for $2 million

Another do-it-yourself option is regional exhibitions. Some Swatch Group brands, such as Longines, Tissot, Rado and Hamilton, met clients and the press at regional events in top markets this year.
Georges Kern, CEO of Breitling, is known to prefer to launch new products throughout the year at regional events.

Next year, when Baselworld moves to the first week of May, Seiko will hold a regional meeting in March in Tokyo for its Asian clients to test the regional option.
“Will Grand Seiko and Seiko be at Baselworld for 2020?” I asked a Seiko insider during the show.
“It’s a big debate in the company,” he said. “The cost is very high.”
Finally, there is the no-event option, adopted by most brands that have departed.
“What would the world be like without Baselworld?” the CEO of a Swiss watch brand prominently placed in Hall 1.0, the main watch area asked.
“The answer is easy: It’s digital! Business-wise, it wouldn’t change.”
He is a strong supporter of the show, and regrets that the Swatch Group and so many others have pulled out of it.
“It’s bad for the industry,” he said. But he recognises that most brands no longer need a once-a-year trade show to do business.
Is later better?

Next year, Baselworld and SIHH – the annual, invitation-only Salon International de la Haute Horlogerie watch fair in Geneva – have agreed to coordinate their show dates so that buyers can attend both shows during one trip.
For years, many retailers had to go to Switzerland twice in three months to source product: in January for SIHH and in March for Baselworld. In 2020, SIHH will run from April 26 to 29 and Baselworld from April 30 to May 5.
The decision has turned out to be controversial. For three reasons. One is that the later dates conflict with Ramadan, making it inconvenient for visitors from Islamic countries to attend.
SIHH and Baselworld present united front with April 2020 dates
Also, some exhibitors and retailers think the new dates are too late in the year. Moving Baselworld from March to May will cause supply chain problems for some companies and make it more difficult to deliver goods in time for the autumn selling season.
And some CEOs were disturbed that they were not consulted about the decision.
Asked if he had been consulted on the May date, one exasperated Swiss watch CEO replied angrily, “Not at all! Do you think I have an interest in launching novelties in May?”
Exhibitors were consulted about the idea to link the show dates, but not about the date itself, sources say.
Other CEOs said they were fine with the new dates. In addition to solving the two-trip problem, the back-to-back shows will focus more media attention than ever on the watch industry, they say.
Independents’ day

One perhaps unintended consequence of the new combined dates is that it has given new negotiating power to a group of brands not accustomed to having much at watch shows.
The group is made up of a small batch of artisanal brands beloved by watch connoisseurs, but not traditionally by Baselworld.
In Baselworld’s boom times, the show placed them in a temporary tent (ridiculously called “The Palace”) erected on a site down the street from the main fair. Not any more.
Baselworld’s new management has wooed them and put them in a 25-booth space, called Les Ateliers, across from Hall 1.0, where the Movado Group used to be.
They also created a new, no frills, low cost (3,500 Swiss francs per booth) space for even smaller watch brands and start-ups called the Incubator. “We have many independents and want to have more,” Pascal Béchu, Baselworld’s new commercial director, said.
SIHH 2019: Independents allow creativity to shine through in original timepieces
That has set up a competition between Baselworld and SIHH for independent brands.
In 2016, SIHH opened its doors to independents; 17 of them exhibited in its Carré des Horlogers section this year. Some (MB&F, Ferdinand Berthoud, Urwerk, Voutilainen, and Romain Gauthier) also exhibited at Baselworld. Others, such as Moser and Hautlence, opted for the hotels.
With the coordinated dates next year, independents will be likely to select one show. SIHH, aware of Baselworld’s lower prices, is expected to negotiate rates for 2020, sources say.
Which one will they pick? Meylan says: “It depends on the offer.”
Predictions

All of these factors are pieces in the increasingly complicated Swiss watch show puzzle.
Baselworld wants the independents and mid-sized firms back, of course. But its fate hangs on the star brands with big booths in Hall 1.0.
Dieter Delecate, owner and CEO of Germany’s Tutima Glashütte, located in Hall 1.1 on the second level, who is a supporter of the fair, says: “It all depends on what the big exhibitors decide.”
During the show, there was fevered speculation about the intentions of three major watch companies – “power brands” that draw retailers, whose yea or nay about Baselworld 2020 will have an impact on the show for better (if yea) or worse (if nay).
They are the Swatch Group, whose absence left a giant space at the centre of this year’s show; the LVMH Group, whose four watch brands (Bulgari, Hublot, TAG Heuer and Zenith) dominate the entrance to Hall 1.0; and Breitling, known to be dissatisfied with Baselworld.
Baselworld 2019 preserved the absent Swatch Group’s giant footprint at the centre of Hall 1.0 in the hope it returns in 2020
 
The odds are that the Swatch Group will not be back next year.
That was the majority view of industry executives and observers I talked to. They noted that Nick Hayek, CEO of Swatch Group, said a week before Baselworld opened that the group would not return to the show.
“There is no need for it any more. They world has changed,” Hayek said.
More evidence: exhibitors said that the Swatch Group Baselworld booths had been destroyed and recycled. Others argued that Hayek would lose face returning after his public criticism of the show when he announced the group’s withdrawal last July.

Yet others noted that many retailers were unhappy that they had to lose a day in Basel to go to Zurich for Omega and the other Swatch Group brands. Some clients did not go.
Retailers also detected some dissension in the Swatch Group ranks about the decision: some brand managers wanted to be in Basel, they said.
Another factor: Hayek had called for changes to the show and the new management team was making them. If he likes the Vision 2020+ proposals, Hayek could return without losing face, saying that his withdrawal forced necessary changes to the show.
Loris-Melikoff has not given up on the Swatch Group. He noticeably preserved the Swatch Group’s footprint in Hall 1.0; no exhibitors were in that space at the show.
Instead, he created a Central Plaza, containing a restaurant, a new press centre and meeting areas. All of that easily can be moved should Hayek change his mind.
At the show’s final press conference, Loris-Melikoff said of the press centre: “I cannot guarantee it will be in the same location. You will understand why.”
Baselworld’s parent company has lost 300 million Swiss francs in the past two years
As for LVMH, odds are good that at least three of the four brands will return.
Each brand CEO will decide for his brand. At the show’s end, the CEOs of TAG Heuer, Hublot and Zenith seemed positive about the Blue Room presentation, sources said.
The one holdout could be Bulgari. Its CEO, Jean-Christophe Babin, was considering holding a regional event at a Bulgari hotel in Dubai, sources said.
Expect Breitling to leave the show: Kern reportedly has told his team that he does not intend to return.
Show management, however, is hoping to persuade Kern to stay by making Baselworld part of the regional events Breitling plans for next year, sources said.
For Baselworld, the stakes riding on the frenzy of negotiations now underway could not be higher. That was made shockingly clear in a little noticed announcement that Baselworld’s parent company, the MCH Group, made on the show’s second day.

More red ink
On that busy Friday, MCH released its 2018 financial results.
The group, which organises 74 exhibitions, reported a 6 per cent increase in sales to 522.8 million Swiss francs for the year ending December 31, but a net loss of 190.4 million Swiss francs.
That loss follows a loss of 110.3 million Swiss francs in 2017.

Baselworld is not the only cause of the group’s mounting losses. But it is a big part of it.
“The downscaling of Baselworld 2018” was one of three factors cited for the 2018 losses. The group said it took a big hit on the depreciation of tangible fixed assets for Baselworld.
MCH said it expects further losses this year.
Ten years ago, when Baselworld had more than 2,000 exhibitors, it was MCH’s cash cow. Now it’s a cash killer.
The pressure is on Loris-Melikoff and his team to turn things around. But that won’t happen soon.
The MCH board has no choice but to be patient. “They told Loris-Melikoff he can lose 5 million Swiss francs for the next four years,” a show insider told me. “They know they have to invest in Baselworld.”
Originally published by Joe Thompson on Hodinkee, a blog, e-commerce website and co-creator of watches.
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Michel Loris-Melikoff, show director of Baselworld, which 10 years ago, with more than 2,000 exhibitors, was a cash cow for event organiser MCH Group – but now is a cash killer. Photo: Hodinkee

Brands like H. Moser opt for showing near Baselworld, but not officially at the show. Source: Hodinkee

Patek Philippe President Thierry Stern speaking at the show's opening press conference. Source: Hodinkee

Controlling costs is no small part of Baselworld's future. Groups like LVMH can end up spending eight figures for their booths when you factor in multiple brands. Source: Hodinkee

Swatch Group held its own event for retailers in Zurich during Baselworld. Source: Hodinkee

Major brands like Patek Philippe are crucial to the show's success. Source: Hodinkee

Word spread among exhibitors during the show that Rolex had signed up for the next four Baselworlds. Source: Hodinkee

Michel Loris-Melikoff speaking to the press, retailers, and exhibitors on the last day of Baselworld 2019. Source: Hodinkee

Baselworld 2019 was a transitional show. Show management plans major changes for 2020. Source: Hodinkee

Amenities like restaurants and lounges were a new addition in 2019 and look like they'll be a bigger part of the show in 2020. Source: Hodinkee

Source: MCH Group

It's important that Baselworld work to integrate the smaller, artisanal brands for which a full-fledged booth is out of the question. Source: Hodinkee

Next year's Baselworld will be more than a full month later than is typical. Source: Hodinkee

New offerings, such as digital platforms and an increased emphasis on end-customer experience will be added over the course of the coming year. Source: Hodinkee

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H. Moser & Cie. The new limited edition of the Endeavour Flying Hours takes inspiration from the planetary system. It is reminiscent of cosmic changes through the juxtaposition of the phosphorescent blue main disc which displays the minutes and three smaller discs showing the hour numerals. Price on request --

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.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Rolex and Patek Philippe will return next year, but there are doubts about others – despite sweeping changes to appease disgruntled exhibitors, writes Joe Thompson

Rolex and Patek Philippe will return next year, but there are doubts about others – despite sweeping changes to appease disgruntled exhibitors, writes Joe Thompson