From the Editor: Swatch Group Pulls Out of Baselworld. Is this the End of the Show as We Know It?

Earlier this year on my 'Letter from the Editor' published in the third issue of Watch Collecting Lifestyle print magazine, I talked about Baselworld 2018 and its future. Back on March 22, 2018, Swatch Group was already sending alarming signals about pulling out of Baselworld and so did Breitling. Right after Baselworld 2018 was over, Georges Kern CEO of Breitling sent out a statement confirming their participation in Baselworld's 2019 edition; however, Swatch Group didn't confirm participating or not, until this weekend Nick Hayek CEO of the Swatch Group announced on a statement via the Swiss newspaper Neue Zürcher Zeitung that his group of watch and jewelry companies would no longer be at Baselworld from 2019 onwards. While the news are not totally surprising, they do leave MCH Group —Baselworld's organizer— in a predicament and this move could very well trigger a domino effect that would finally jeopardize the future of the event as we know it. Kudos to Swatch Group and Mr. Hayek for having the courage to do what many should've done a couple years ago.

With a newly finished facility that opened its doors for the very first time in 2013, MCH Group is now faced with a long and rocky road ahead of them. The new building project for MCH Messe Basel was first presented to the public in 2006 and officially handed to MCH Basel Exhibition on February 8, 2013. With an overall investment of CHF 430 million Swiss Francs this is the biggest investment ever to have been made in Switzerland's exhibition industry.

Our first attendance at Baselworld was in 2013 and that point the show that was referred to as 'the largest watch and jewelry show in the world' for decades, seemed solid as a rock with about 1,815 exhibitors. But then in 2017, the number of exhibiting brands went down to 1,300 and even the Palace Exhibition Area —the dedicated space for the independent watchmaking brands— was shut down with many of these brands opting for the 2017 SIHH's Carré des Horlogers —a new dedicated space for independent watchmaking brands a the Salon International de la Haute Horlogerie Genève.

At that point, we knew something was cooking and that Baselworld would be coming to an end sooner rather than later. This 2018, Baselworld felt very different with half of the exhibiting brands present in previous years —only 650 booths— and with two full levels at the main exhibition hall totally closed. With this, the show went down to only a third of its size when compared to 2013 and it sparked many rumors from watch industry insiders that alluded to its upcoming disappearance.

To give you a good idea of what it means for someone like Swatch Group —18 watch brands total— to pull out of Baselworld, let's talk figures in terms of exhibiting space and money. First of all, Swatch Group would invest up to $50 million USD to be at Baselworld with its 18 brands. Split in four different groups by price point, these are Swatch Group's brands:

  • Prestige and Luxury Range: Blancpain, Breguet, Glashütte Original, Harry Winston, Jaquet Droz, Léon Hatot and Omega.
  • High Range: Longines, Rado and Union Glashütte.
  • Middle Range: Balmain, Calvin Klein, Certina, Hamilton, Mido and Tissot.
  • Basic Range: Swatch and Flik Flak.

Swatch Group and its brands would take at least a third of the main hall in terms of exhibiting space and the main hall is not necessarily small. The main hall complex is 660 feet long —220 meters—, 270 feet wide —90 meters— and 96 feet tall —32 meters—, providing a total of 409,000 square feet of exhibition space —38,000 square meters— on the ground floor and the two upper stories that span the Exhibition Square.

The new building developed by architects Herzog & de Meuron combined functionality and aesthetics in the ideal manner with an exhibition site that would allow for flexible management while offering visitors a high level of comfort and convenience. However, unfortunately the cost to exhibit at Baselworld has been astronomical since its opening and many brands started pulling out because they could no longer afford it. Even food and drinks at the atrium —City Lounge— where everyone would hangout after a busy day would come with a huge premium. Clearly not surprising that the Swatch Group would finally pull the plug and tell MCH Group that enough is enough. Good for them.

While this year marked my sixth year attending Baselworld, for the very first time, I decided to stay in Basel instead of Zürich. While Zürich is Switzerland’s largest city and a very cosmopolitan place, the idea behind cutting my commuting time and being able to socialize after the busy days at the fair,  convinced me of staying in Basel regardless of its overpriced and low range accommodations. Even though Basel is the third largest city in Switzerland, it really feels more like a very average small town with barely anything to do. Without a doubt, one of the biggest downsides to having Baselworld take place there.

Even when you love watches as much as I do, it feels horrible to pay for a mediocre 4-star hotel in Basel what you would at the Park Hyatt in Zürich. Filled with average to basic restaurants, the Grand Hotel Les Trois Rois –“The Three Kings”— is pretty much where we all hang out with the brands and where long days fade into long sleepless nights filled with cigars, negronis, champagne and remarkable dinners hosted by brands like Patek Philippe, Rolex and Hublot.

Unfortunately Basel is a city that in reality is too small to deal with 104,000 visitors from 100 countries —what Baselworld used to drive in— and 3,300 journalists from 70 countries. To make things even worse, this small Swiss city has decided that the week of Baselworld is the perfect time of the year to milk visitors and make up for their lack of revenue the rest of the year and prices for hotels, food and drinks are up the roof. With Swatch Group's recent move, 2019 might very well be the last year for Baselworld as we know it.

Regardless of the large number of novelties that were unveiled by most of the exhibiting brands, this year the energy at Baselworld felt totally different. Even the iconic Breitling party was gone. Clearly those rumors we heard a few months ago were more than just that and are in reality the eve of what’s about to turn into a downward spiral for the fair.

Clearly, I could tell that the number of visitors and journalists was nowhere near 2017. Some familiar faces where not present, many of the watch and jewelry brands were now gone and the big crowds that used to fill the atrium of the Messeplatz every evening were not there either. I still remember when I started attending Baselworld that after a long day shooting watches and having eight to ten back-to-back meetings with the brands, it was a must to gather with your friends outside the main halls for a few beers or glasses of champagne. Sadly this year, it was just a meh type of vibe.

With Swatch Group pulling out, I really wouldn't be surprised if others like LVMH —Bulgari, Hublot, Tag Heuer and Zenith— or some of the independent brands that are still left at Baselworld —and also exhibiting at the SIHH— would follow. For instance, LVMH is already hosting a big event the week of the SIHH in Geneva and independent brands like De Bethune have set up shop at the swanky Four Seasons Hotel des Bergues Geneva where they meet journalists and clients while they are in town for the Salon International de la Haute Horlogerie.

Despite what's currently happening with Swatch and its 18 watch brands, we really don't think that brands like Patek Philippe, Rolex, Tudor, Chopard or Chanel will pull out as they really don't have another clear option at this point. While brands like Hermès and Girard-Perregaux have already left Baselworld for the SIHH, we are not sure how many more brands the SIHH could accommodate. Furthermore, with its organization heavily influenced and controlled by the Richemont Group, I am not sure how welcoming they'd be when it comes to having someone like Patek or Rolex come join the party.

In the eve of what could finally be the end of Baselworld as we know it, there is in reality no other place in Switzerland that could host such a watch and jewelry event and be ready to accommodate 110,000 visitors every year without incurring in the same type of issues that Basel did for the last century.

I can only hope that 2018 wasn’t one of the last few years Baselworld has left, because ‘Les Troi Rois’ will be dearly missed.

For more info on Swatch Group click here and on Baselworld here.