Earlier today, Paris-based LVMH Group announced that several watch brands in its watch division (Hublot, TAG Heuer and Zenith) and Bulgari (which also produces a number of luxury watches) are following suit. of a number of other great timepieces. manufacturers and sever ties with Baselworld. This news comes just days after – and is directly linked to – the announcement of the departure of Rolex, Tudor, Patek Philippe, Chopard and Chanel from Baselworld.
Although not all of LVMH’s watch brands have shown up at Baselworld for some time, its leading global luxury watch manufacturers have been key attractions for guests at the long-standing watch show event – wristbands organized in the city of Basel, which takes about 1.25 hours by train away from Zurich. Problems between exhibitors of watch brands and the Baselworld organization have been simmering for some time, and in 2020 the show itself was forced to close due to the COVID-19 pandemic crisis.
Faced with huge and unprecedented economic losses in how to handle the situation, MCH (the company that operates Baselworld) apparently chose not to reimburse the exhibition costs in full, but instead explained to its many exhibitors that Baselworld 2020 would be rescheduled… January 2021. This would ostensibly allow Baselworld to keep the fees already collected and simply apply them to a replacement show. Unfortunately for Baselworld, few exhibitors agreed that a January 2021 fair was the same as an April 2020 fair – many felt Baselworld was operating with a lack of sportsmanship.
The precise nature of the disagreements between Baselworld and the watch brands that collectively make up its exhibitors and therefore its customers is somewhat unclear, but appears to be primarily money related. The consensus seems to be that for the cost and inconvenience of attending Baselworld, the return on investment of being there does not add up for many people who in modern times have many other ways of meeting each other. and doing business. Baselworld has been invited for years to lower its prices and attract distinguished guests and exhibitors to Basel. Although efforts were indeed made, it was apparently too little, too late.
The first blow to Baselworld in the modern era came two years ago, when Swatch Group’s entire portfolio of watch brands secured the support of Baselworld and decided to meet with retailers at their offices in Zurich. From there, brand after brand seemed to follow, with the once invincible Baselworld more and more like Swiss cheese. That said, the watch brands and Baselworld experienced their first major split when the Richemont Group and some fellow brands split up to form the alternative luxury watchmaking show known as SIHH in Geneva. In recent months, SIHH has been rebranded as Watches & Wonders Geneva and in general has gradually moved brands away from Baselworld for years.
Rolex, Tudor, Patek Philippe, Chopard and Chanel are now joining the Geneva team and will participate in a brand new watchmaking fair (which does not yet have a name) which will be held next to Watches & Wonders Geneva and which will be organized by the same partner organization, the FHH. LVMH makes it clear that they will also be displayed in Geneva, but where and how is not yet clear. There is also no shortage of options or locations in its brands. In January 2020, aBlogtoWatch joined LVMH’s watch brands in Dubai at the group’s own show where they debuted watches, and pointed out that their event was much cheaper than the cost of attending Baselworld. LVMH openly mocked Baselworld that it had better options and that its business was going to take some work to preserve.
Rolex and Patek Philippe were the two fellow watch brands whose stands were nearby like those of the LVMH brands, and whom the LVMH brand retailers wished to meet. Essentially, the people who came to Baselworld to buy Rolex and Patek Philippe watches for their stores were the type of buyers that Hublot, TAG Heuer, Bulgari and Zenith wanted to meet – and they did. LVMH is probably concerned that while Baselworld is full of other potential brands to meet, the crème de la crème will not attend the now must-see watch event in the city of Basel.
LVMH actually makes a very luxurious house argument, the logic of which it is difficult for shareholders to complain about. LVMH basically says at Baselworld, “we are Louis Vuitton and many of the best known names in the luxury world”. We must respect our image, because the image is our product. Attending Baselworld is not a good idea for us at the moment. Baselworld has been fun, but working with you at the moment is not helping our image. LVMH declares: “[our brands] must also remove [from Baselworld] in order to preserve their image and their relations with their clients as well as with the media. It’s hard not to feel bad about Baselworld. While the dominoes of outgoing brands have been falling steadily for the past year, rumors of her demise have become a self-fulfilling prophecy that has convinced enough important people that the show should know of her demise.
One of the main questions on everyone’s mind is what will happen to the dozens of smaller watch brands that have also relied on Baselworld to reach customers and the media. If Baselworld has now lost all of its flagship brands, it is highly likely that it will operate the show as it will not be economically viable given the overhead costs of the show at its recent size. It is not clear whether Baselworld will agree to make a much smaller show just for smaller brands that still want to participate. Even with just these brands, Baselworld could be pretty big. That said, Baselworld will probably never be able to recoup the historic income it has made from exhibition fees. These days, the value of being at the show is simply less for brands, despite the cost of Baselworld to show it. One option could be that Baselworld be integrated into Art Basel, closer to summer each year. The famous art exhibition could make room for luxury watches, as both events attract high-end audiences customer base. Although it is not clear whether Basel’s maligned and undersized hospitality industry could accommodate additional visitors during the busy arts event.
Another option is for Baselworld to move to Zürich. There he could counter the Swatch Group movement and put on a show at the same time as the Swatch Group invites retailers into town to see its latest products. In this way, Baselworld can assure its exhibitors that not only is Zurich a more travel-friendly city than Basel, but there will already be more types of buyers they want to meet in the city.
LVMH and luxury watch brands in general have all come to a similar conclusion, namely that they cannot both attend a major trade show like Baselworld and also have to travel around the world to participate in numerous smaller local events. Preventing them from participating in Baselworld and traveling are practical considerations such as human resources, manpower and available budgets.
Not being able to attend a watch show like Baselworld will have mixed implications for the watch industry – but in all likelihood most former Baselworld exhibitors will find new shows to exhibit within a few years. It could also be a boom for watch media and marketing, whose budgets could easily increase due to serious needs, as well as the budgetary availability of unused Baselworld francs. It will nevertheless be a few years before a new level of normality emerges with regard to established places where watch brands can present their new products to buyers, customers, the media and above all… to each other.