Official Baselworld Press Imagery

None of this would be as much of a big deal if it weren’t for the overall downsizing the Swiss watch industry is facing. Reports of Swiss watch export values going up don’t dissuade me from being convinced the watch industry is both shrinking and painfully reorganizing. The industry is at least a few years away from having new business models they are happy with, and at this time everyone is looking to reduce costs, trim fat, and reevaluate strategies and practices. One thing many brands are looking at is how much they are spending on trade shows, along with the returns those trade shows deliver. I can say that even the most well-funded watch brands simply don’t have the budget or human resources to attend all the watch shows which have popped up around the world.

Baselworld is known for being extremely expensive and not particularly pleasant for exhibitors or guests. Attending the show and seeing friends and colleagues is certainly a highlight, but the show itself is hardly for the weak, and can prove a poor investment unless one has the determination and energy to make the most of it. There is a reason aBlogtoWatch likes to refer to its annual journey to the show as “the war of Baselworld 2017,” for example. Being at the show is like a battle, and getting to the show and staying there is an ordeal. Perhaps the Swiss watch industry has simply outgrown the limits of Swiss hospitality.

What leads me to believe that Mr. Hayek and the Swatch Group might reverse their decision is the fact that they don’t yet have an alternative. It is true that the Swatch Group could host their own show, but they would need to invest copious amount of cash into a venue and into bringing all the right people there. For sure they could do it, but the question is how much money would they really be saving. The fact that industry professionals converge together at Baselworld (and SIHH, for that matter, in Geneva) is of great value because it is otherwise hard to get everyone in the same place at the same time. Would the Swatch Group set up their own show across town from Baselworld? One can guess what options the Swatch Group might choose, but in the short-term it might make more sense for them to continue attending Baselworld assuming the show gives in to demands which are probably not that unreasonable.

Another problem is that the interests of the watch industry and MCH are different. Both want to make a profit, have their own unique concerns, and clearly don’t spend enough time speaking with one another. MCH wants to maintain profitability and pay off their debt (much of which they assumed when they expanded the convention center itself), while the watch industry wants the show to work for them and to not pay more than they feel they are getting from it. In better economic times I know for a fact the watch industry would care less, but these days they have all the reasons they need to put their foot down and demand better value from what is still the most important watch trade show.

A good question is how other brands as well as the organizers of SIHH are taking the news? The latter trade show, which is held in January of each year in Geneva, isn’t a particularly more comfortable show, and while SIHH is smaller, it is growing. SIHH brands and the Richemont Group are likely grinning at the Baselworld row but their show also stands in danger of growing too large. Many in the industry agree that SIHH has reached its limit of how many brands it can comfortably host without stressing visitors too much. Moreover, SIHH has also announced that it would be shortening its show by a full day. The implication there is simply that watch industry downsizing is not contained to just Baselworld-attending brands, but is an industry-wide issue.

For the time being, other major exhibitors of Baselworld are staying, even though the show has dramatically reduced in size over the last few years from over 2,000 exhibitors to under 650. Jean-Claude Biver of LVMH predictably shows support for Baselworld by stating that the brands he oversees will continue to be at Baselworld (“for the time being”). He did, however, say that the show has “to change significantly,” presumably to maintain LVMH’s business. aBlogtoWatch will continue to monitor this story and publish updates as they arrive. swatchgroup.com

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