To the outside world, the watch industry seems relatively calm. Unlike the competitive, costly and complex world of car manufacturing, there are no life-threatening concerns about the products, nor geo-political considerations because the majority of the brands are Swiss. After the Quartz Crisis, which it survived, watchmaking suffers no dramas to match GM crop issues, pharmaceutical testing or the fire resistance of bedding. The toughest it gets is certification for diving watches.
Glamorous, riddled with celebrities, existing in the world of luxury goods – even the ups-and-downs of unit sales barely attract attention. And yet currently the industry is experiencing the kind of turmoil which might, I fear, herald major blood-letting. As cosy and secure as the Swiss watch industry believes itself to be, there are precedents where arrogance – and the Swiss are nothing if not haughty – decimated a once-healthy business. But it’s not necessarily a case solely of pride coming before a fall.
For nearly 25 years, I have been exhorting those who would listen to start dealing with seemingly mundane issues. Alas, I do not have every watch company CEO on speed dial. But even if I did, they care not about my cautionary tale because I am neither Swiss, a banker, nor – better still – a Swiss banker. It seems that the Swiss listen to no-one else. Not even priests.
My 21st century fable involves an industry with so many parallels to the watch business that it seems like a badly plotted novel: high-end audio equipment.
Parallel No. 1 is the hi-fi industry suffered its equivalent of the Quartz Crisis in the form of digital audio, when CD arrived in 1983. Unlike the watch industry, which endured its greatest challenge and came out stronger, hi-fi is peopled by music-loving geeks, hobbyists, anti-capitalists and others ill-equipped to deal with market forces. Those of you latching onto the similarities might posit: “But what about the much-vaunted Vinyl Revolution? Surely that held back the digital onslaught?” To complete the analogy, I will tell you that the size and scope of the return of the LP would be equivalent to the entire remaining mechanical watch business consisting only of Glycine, Ernst Benz and U-Boat. Just because advertisers think images of turntables denote cool doesn’t mean that the LP killed off streaming and CDs.
Parallel No. 2 is an annual show which serves the same function as Baselworld. It’s even roughly the same size, at around 130,000-150,000 visitors, though it’s trade-only. Taking place every January in Las Vegas, the Consumer Electronics Show includes just about everything that runs on electricity, and is now dominated by drones, phones and flat TVs. Ten years ago, though, roughly a thousand high-end audio names were in attendance. For January 2019, around 25 remain. Yes: two-five. Why? Add a mix of arrogance, show politics, stupidity, unprofessionalism, internet sales and the demise of retailers to the damage wrought by digital audio, and the result is the obliteration of an entire industry’s presence at the most important event in the calendar.
Which brings us to Parallel No. 3: the decline of said seemingly everlasting show. Just as CES drove away the trophy brands – does anyone really give a shit about drones and VR headsets? – so has Baselworld disrespected and antagonised its most important component. Yeah, yeah, they’re gonna up the number of jewellery exhibitors, but so what? The bulk of attendees are there for watches. And besides: there are already too many jewellery shows as it is.
Eloquently explained by Wei Koh here, the unbelievably rapid decline of Baselworld has resulted in the absence of the Swatch Group, the biggest watch family in the business. In the wake of this monumental withdrawal, Corum, Maurice Lacroix, de Grisogono and others have followed suit, although the exodus began before Swatch’s decision, with a number of brands finding space at SIHH.
Baselworld’s contraction needn’t have happened. I asked Jean-Claude Biver, one of the industry’s canniest thinkers, what could save it, and without hesitation he cited a cut in ticket prices for the public, fewer days for the event and – to my surprise – a return to the sorely missed scheduling adjacent to SIHH.
It’s too late for CES and the presence of speciality hi-fi at that show. Instead, the brands congregate at the High End Show in Munich. For those who hate Las Vegas, it’s a blessing. For the industry itself, it’s salvation. But it’s not too late for Baselworld.
Why should anyone care? As Biver pointed out, the small makers need it. But the big guys gain something, too. Says Biver: “It’s the small brands that are inventive, and they inspire us.”