This week, Baselworld returned to the headlines in the specialized media for two reasons: the first concerns a press release from the organization regarding certain monetary aspects —payments and reimbursements— that prevail in view of the event that will now be held in January 2021. On the other hand, the positions of the exhibitors with regard to these conditions of participation have begun to be known. And folks… things are not looking good!
As they say, in the form is the substance. First point: why continue to call this a “re-scheduling”? Why not to call “duck” the duck? The 2020 event was cancelled for all intents and purposes, but the organization says it was rescheduled for 2021. Wouldn’t this imply the celebration of the “real” 2021 edition of Baselworld later in that same year? Will there be two salons in Basel during 2021, then? How logical is this?
I imagine that this misuse of semantics responds to legal and/or insurance situations (let’s not forget: this is a business), but… come on! More than ever, we can all understand the dramatic situation, even more so when we live in unprecedented times that have forced us to change our way of being and doing. Transparency and solidarity are good allies in times of difficulty.
Now, what we have learned from various media reports reveals a serious problem with Baselworld and its realistic permanence as a leading player in the industry. In these times of discontent and re-accustoming, to persist in doing “business as usual” does not seem to be the best strategy, even more so when the conditions of the environment and its economic consequences are neither appropriate nor sustainable. Today, the name of the game is “cash flow” and most brands are not in the position to set aside or even lose precious resources during this crisis. That is why the industry calling for a joint, well-thought-out commitment out of everyone is so precious.
So, in light of the rescheduling of the fair and in order to make the next steps and agreements, Baselworld has been in communication with the exhibitors to inform them of the obvious financial issues. As of today, the situation can be summarized as follows:
For companies participating in the January 2021 edition, 85 per cent of the fees already paid will be considered as a deposit. The remaining 15 per cent will be retained by MCH to cover expenses incurred by the organization of the postponed/cancelled event. Any remaining balance is due in September 2020. Oh, how nice of them!
But what if a brand no longer wishes to participate in the fair in January 2021? Glad you asked! Baselworld will refund canceling brands about 25 to 30 percent of the monies they have already paid. The remainder will be used to cover costs incurred by the organization (around 30 per cent!) What the remaining 40 per cent will go towards is unclear. Perhaps towards the Baselworld edition… of 2021? All in all, this seems to be an outrageous “penalty” of around 70 per cent in total for the brands that don’t want to enter January’s BW 2020 as well as the following edition.
The indignation over these immovable provisions was expressed on April 7 by the European Watchmaking Permanent Committee (CPHE), an entity which brings together the interests of the industry as a whole — Swiss and European — and represents them before private and official bodies. The Swiss delegation is represented by the Watchmaking Federation (FH) and this year heads the General Secretariat of the CPHE.
After consultation among its representatives, the Committee prepared a message for MCH, sent on April 7 and signed by Jean-Pierre Pasche and Maurice Altermatt, President and Secretary General of the CPHE, respectively. In this formal and respectful letter — of which Revolution has a copy — the CPHE addressed MCH and Melikoff to ask them to listen to the concerns that the industry and the exhibitors have regarding the financial measures taken by the show.
But, in parallel, the issue quickly escalated, according to media reports by outlets such as Le Temps and Watches by SJX.
They report that another letter was sent by the exhibiting brands to MCH, through the president of the exhibitors committee, Hubert J. du Plessix, who is also head of investments and logistics at Rolex. In the letter, Melikoff was reportedly asked to return all payments made for the 2020 edition to those who cancel. Otherwise, given the “lack of consideration” of the organizers and the condition of the refunds, these brands will push back and leave the watch fair. The letter ends on a somber tone, stating, “we fear that this will be the end, pure and simple, of Baselworld.”
It should be noted that these reports also mention that the regulations of Baselworld do not contemplate reimbursing exhibitors for costs already incurred. While we could not verify independently the assertions reported by the other media, we’ve reached out to brands for their opinion on the way things are going. The unofficial response we’ve received so far, all point to the same direction: the position of MCH must be relaxed for the good of the industry.
Added to this is the theme of the beautiful but not very hospitable city of Basel, and the exacerbated cost surcharges of tourist products and services at the time of the fair. Despite BW’s many promises and commitments to promote an amicable and reasonable logistical cost situation, the very opposite has happened. In the face of changes in plans —postponements or cancellations of reservations— the hotels have refused to cooperate by means of refunds or modification of reservations. Same as it ever was, right? One of the key problems is the absurdity of the penalties that many of the city’s hotels demand for modifying original reservations, of between 10 and 15 per cent. Really?
Ironically, Baselworld has confirmed that Basel — like other large Swiss cities such as Geneva, Lausanne and Neuchâtel have long been doing — will now be offering free transportation cards to visitors of Baselworld. This just became a moot point in view of much more relevant business situations and issues for the participants. As the reports and positions of the brands and organizers indicate, there is a real risk that Baselworld will disappear completely… and do so very soon. Perhaps it is time to relax the rules; to generate alternatives and viable solutions to a problem that afflicts everyone in the industry. It is time to behave like passengers of the same leaking boat. It is a matter of genuine survival, for crying out loud! Because without a fair, there are no hotels to occupy and no green trams to take to Messe Basel. And the brands will seek —as they are already doing— other ways to perpetuate the watchmaking culture and take care of their business.
Updated April 9, 2020
In an interview with Le Temps, Baselworld’s director-general Michel Loris-Melikoff has responded to critics about the way he is handling the refunds to this year’s “postponed” fair.
Baselworld is also in survival mode, Melikoff told Le Temps, and states that “to reimburse the full amount is impossible. If I do, I jeopardise Baselworld.”
The exhibitors denounced MCH’s results where they reported liquidity of up to 140 million Swiss francs, but Melikoff tells Le Temps that the group is expecting a further drop in group turnover in 2020 from 130 to 170 million due to COVID-19. To ensure that Baselworld can ride out the crisis, certain steps have to be taken.
Of the two options proposed to exhibitors, Melikoff believes the first solution is the best, as it allows exhibitors to carry over 85 per cent of the amounts invested into the next edition while ensuring that Baselworld still has a chance to survive the storm.
More updates to follow.