Anchor Image: What used to be a regular day at Baselworld.
Basel, Switzerland, has hosted the most important watch fair in the world, known today as Baselworld. Founded in 1917, a watch manufacturer’s presence in the fair could determine the outcome of its future (at least up until recently, in this new and highly digitised world).
In 1991, 74 years after Baselworld began, several brands (owned by what was to become Richemont) exited the fair to start SIHH (Salon International de la Haute Horlogerie), a competing event in Geneva. Rebranded as Watches & Wonders Geneva from 2020, the fair started its 30-year lifespan with five exhibitors: Cartier, Piaget, Baume & Mercier, Daniel Roth and Gerald Genta. Now hosting 30 luxury brands, Watches & Wonders 2020 was slated to run from 25 to 29 April, and Baselworld (which saw 81,200 visitors and 520 exhibitors in 2019) from 30 April to 5 May. As expected, both fairs have now been postponed to 2021 due to the coronavirus pandemic.
Watches & Wonders, an invite-only event with 23,000 visitors in 2019, announced it will keep its April 2021 slot. Then came a shocking revelation: Baselworld pillars Rolex, Tudor, Patek Philippe, Chopard and Chanel announced their exit from the world’s largest watch fair and will start a new event that’s said to coincide with Watches & Wonders in 2021. They cited the unwillingness of Baselworld to offer a full refund of the 2020 exhibition’s pre-paid fees and an undesirable January date as the last straw. MCH Group, Baselworld’s parent company, expressed surprise at this decision in a statement released on 14 April, 2020.
As the watch industry likes to remind us, crisis can also mean opportunity. Bvlgari’s CEO, Jean-Christophe Babin, has made a play to step into the 2020 gap with Geneva Watch Days, a “distributed fair” idea using Geneva’s hotels and boutiques as “fair space”.
Originally announced to run from 26 to 29 April, that date has since been moved to 26 to 29 August, with eight brands in participation: Breitling, Bvlgari, Girard-Perregaux, H. Moser & Cie, Ulysse Nardin, Urwerk, De Bethune and MB&F. (In the latest turn of events, it has also been announced that all Swiss watch manufactures belonging to the LVMH Group will leave Baselworld to join the other flagship brands of the Swiss watch industry in Geneva from 2021 onwards.)
“It is a perfect example of a decentralised federative system where no one dictates rules, and everyone can participate at their own level of investment,” says independent boutique brand MB&F’s founder Maximilian Büsser, who would have occupied a large booth at Watches & Wonders 2020.
For Bvlgari and its sister LVMH brands, the loss of the global fairs in 2020 due to the pandemic was not as difficult a situation as it could have been. Both fairs have been experiencing difficulties attracting visitors and exhibitors and were already working on plans to rejuvenate.
For the last decade, SIHH ran in January while Baselworld kept its traditional timing in early spring. In a bid to work more closely together, both fairs had agreed to run back-to-back in the late spring of 2020. Bvlgari and the other LVMH-owned brands had already been staging their own exhibitions in January in a bid to take advantage of SIHH’s prime calendar positioning in addition to their regular participation at Baselworld. With the fairs taking place so late in 2020, Babin’s group created LVMH Watch Week, where invited media and retailers converged at the Bvlgari Resort in Dubai in mid-January.
“For Bvlgari, it was fruitful since we already secured 60 percent of our yearly business plan,” Babin explained. “That said, I would not sketch a parallel between the Covid-19 pandemic and a new opportunity to ‘rethink’ in-depth the trade fairs.”
Babin also states that Geneva Watch Days is not intended as a permanent solution, but rather a one-off in a unique situation.
“For a few years, there have been many signs that the status quo is threatened. Expectations from exhibitors have evolved in all the retail fairs worldwide, many different, cacophonic, even competing initiatives anywhere and anytime in our industry… that has been booming for a couple of decades and [the situation] now offers a very good opportunity for all players to reassess their stand. Crisis brings opportunities,” says Pascal Ravessoud, secretary-general of the Cultural Council at the Fondation de la Haute Horlogerie (FHH), the governing board and organiser of Watches & Wonders.
Richard Mille, Audemars Piguet and Greubel Forsey had already decided to leave after the 2019 edition of SIHH.
“The fair no longer corresponded with our strategy and business model,” explains Tim Malachard, global marketing director at Richard Mille. “We ceased selling with retail partners at the end of last year, and our business is now focused only through dedicated Richard Mille boutiques all over the world and in most key cities. To date, we have 42 boutiques and plan to increase to between 45 and 50 over the next few years.”
Malachard explains that the outbreak of the virus actually created more logistical issues than a loss of business, “simply due to the reduced possibilities for our clients to travel and collect their watches in our boutiques. However, the next two months will see a larger impact with the global spread of the virus and governments installing lockdown in many countries.” He feels that change was inevitable in today’s digital world.
“What’s important is how the industry reacts once the peak of this crisis passes and when normal business resumes, but this will be very dependent on each brand and the means they have to bounce back.”
The watch world’s biggest group, Swatch Group, owns the deepest manufacturing and supplier capability alongside its 18 brands. The group did not attend Baselworld in 2019, staging its own alternative event for some 200 journalists in Switzerland called Time to Move. Without a large-platform event to rely on — and a modified Time to Move having been cancelled for 2020 — Swatch Group brands like Omega will have to rely on its marketing endeavours, now more than ever. However, the brand’s most important marketing efforts — the 2020 Olympics in Tokyo and new Bond film No Time to Die — have both been postponed.
Swatch Group president Nick Hayek reported that sales are indeed at a standstill, especially in countries where all retail outlets have been shut down and in Hong Kong, where the previous social unrest had led to boutique closures. With the state of retail sales and global economic downturn due to Covid-19, it goes without saying that luxury watch sales have also taken a hit.
“In China, it’s a disaster,” noted Hublot CEO Ricardo Guadalupe in February 2020. “In Macau, we had to close our boutiques for three weeks, and there is no traffic… [We’ve experienced] a drop of 70 to 80 percent of sales in China.”
He also stressed that the absence of the fairs is not as important to his company due to the way digital technology has transformed business.
“What happened in the second part of 2019 in Hong Kong already affected the region and the worldwide sales results for a majority of brands since Hong Kong is the main export market for our industry,” Ravessoud explained.
“I would guess that brands were hoping that Chinese New Year would be a good way to make up for that, but instead experienced an even bigger drop in sales from January onwards. I heard through the grapevine numbers in the range of -50 to 60 percent and more for certain brands in Asia. However, we are already seeing signs of recovery in China, Hong Kong and other markets, and this is
Luxury watch giants Rolex and Patek Philippe recently announced a postponement of new launches until 2021 so as to alleviate stress on ailing retailers. Additionally, Patek Philippe has done something unprecedented: as of March 2020, it has allowed certain retailers to sell its watches online. Perhaps this is the start of something new among the most traditional brands?
“We’re living incredible moments; coronavirus is something really surprising and a bit shocking,” stresses Guadalupe, whose firm celebrates its 40th anniversary in 2020.
Yes, we are living in uncertain times. We can safely assume that the industry’s big players will bounce back, as will the world’s economies — this prognostication is fairly universally shared. However, “we can probably anticipate a drop of 50 percent revenue for all watch brands,” says Busser.
“Those less ‘exposed’ to Chinese clients may have less of a drop. Covid-19 will impact the watch industry in the same way it impacts humans: the more fragile immune systems are at very high risk. The others will have a rough time and then get back on their feet.”
But will we still need watch fairs when all this is over? That answer is as uncertain as all the rest.
Editor-in-chief of QuillandPad.com, Elizabeth Doerr is a member of the Cultural Council of the Fondation de la Haute Horlogerie and was on the jury of the Grand Prix d’Horlogerie de Geneve for nine years
This article appeared in the May 2020 issue of A Magazine.