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Wednesday, March 22, 2017

Baselworld Officials Defiant After Losing 200 Exhibitors

Entering Baselworld 2016 on opening day. Photo by Anthony DeMarco

Officials said Wednesday they “turned away” exhibitors at the 2017 edition of Baselworld, set to open tomorrow, as the show is focusing “quality over quantity.” 

“We decided to turn away exhibitors this year. It’s our choice. It’s our choice,” said a defiant Sylvie Ritter managing director of Baselworld, during the annual preopening press conference. The world’s largest watch and jewelry fair opens Thursday and runs till March 30. 

This quality over quantity theme was repeated by the four speakers who took a unified stance against criticism the show has received from many jewelry and watch exhibitors based on price increases, demands to acquire more space and a decline in buyers. The show itself has seen a decline in exhibitors the past few years. 

This stance went to an absurd level when François Thiébaud, president of the Baselworld Swiss Exhibitors Committee, rehashing the decline in Swiss watch exports (9.9 percent year-over-year), said at one point, “We don’t want to produce that many watches we want to produce quality watches.”

This year's fair has a year-over-year decline in exhibitors of 13.3 percent, from 1,500 to 1,300, Ritter said. This follows two consecutive years of 3 percent declines in exhibitors and buyers.

Eric Bertrand, president of the Baselworld Exhibitors’ Committee, leveled the harshest criticism toward those exhibitors who have left or were forced out (depending on who you talk to). 

“In the past I have been surprised by the popularity of certain brands, some quite famous, but really unrelated to our watchmaking industry,” he said. “And when the winds start to blow harshly so does reality become harsh. We have observed that some brands have had to backtrack while those who have always focused on their knowhow are still around.”

He added, “This market consolidation—even in watchmaking, even in jewelry making—will be a benefit to the entire industry the day economic recovery is fully primed. The recovery will afford the best prepared players to gain market share and to be even more successful than ever before.”

After some pointed questions from journalists (a welcomed change) Ritter said the brands that are no longer at Baselworld failed to meet a criteria that she refused to specify. 

“We have turned away exhibitors who are not in line with our concept and do not meet the criteria for Baselworld. We do not publish this (criterion). They differ depending on the product and the markets.”

It seems a bit remarkable at a time when the luxury market has been democratized through digital media, more access to world travel and brands owned by conglomerates looking for endless growth through the mass market, that Baselworld officials seem to be touting a call for old-world exclusivity. 

But really the claim isn’t believable. If it is, they should look at the conglomerate-owned watch and jewelry brands who were willing to pay huge increases for prime real estate in Hall 1.0 and which Baselworld officials were more than happy to accept. These increases spread to the rest of the halls which led to smaller watch and jewelry brands being priced out of the fair. 

In addition, when Baselworld went on this luxury strategy following a renovation a few years ago, the market was led by a boom in China that has largely leveled off. Now with a myriad of geopolitical and economic challenges throughout the world, consumers are not buying like they used to. 

It seems obvious to me the only criteria that matters is money. 

Bertrand singled out fashion watch brands as those who failed to meet this mysterious criteria. 

“The reason is and you must have read about it and know a certain number of brands that are fashion related took watches to get into the industry and they treat it like an accessory … like glasses and spectacles and other components (it) becomes an element (that) adds value to the image but are not related to our industry,” he said. “Now I believe these people did not obtain the results they planned and have given up producing such products.”

One former exhibitor that went public with criticisms of Baselworld and publicly left was the Timex Group Swiss Luxury Division, a division of the Timex Group, which manages the watch business for luxury fashion brands Salvatore Ferragamo, Versace, Versus and Nautica.

Paolo Marai, president and CEO said in a recent Jewelry News Network story, the $3 million investment into the show could be better spent in other areas of its global business. The four brands occupied Hall 1.1, the second floor of the hall dedicated to “global” watch and jewelry brands.

The watches are made in Lugano, Switzerland, in line with "Swiss Made" quality standards. 

Another high profile company that left Baselworld (or didn’t meet the “criteria”) was Bremont, which had the largest space in a separate area for independent watch brands, known as “The Palace.” 

The Palace is no more; instead it is replaced by a new area called, “Les Ateliers,” in Hall 1.2, described by Baselworld as the place for “the most successful” independent watch brands. Bertrand and the others treated the change as an accomplishment rather than a symbol of the fair’s decline, which others have argued. 

Despite the controversies of the past year, Ritter’s defiance was clear with her last statement at the press conference.

“I went through the halls last evening and I can tell you that I slept very well.” 

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