Keeping up with the trade show developments
At the moment, it seems that not a week passes by without some news related to one watch and jewellery show or another. Following the recent departure of a number of key brands from the previously named Baselworld (now known as HourUniverse), many, including Bulgari and Girard-Perregaux, have decided to relocate to Geneva, holding their shows alongside that of the formerly named Salon International de la Haute Horlogerie (SIHH), now known as Watches & Wonders.
Dominated by the Richemont brands, the Watches & Wonders show as with many others was cancelled this year, but organisers have announced that they will be holding their first physical Shanghai based show in September 2020. Combined with a digital platform showcasing the new launches, those not able to travel will be able to see the best that the industry can offer via the internet.
Meanwhile, in a statement Fabienne Lupo president and chief executive officer of Fondation de la Haute Horlogerie, organisers of the previously named SIHH, has announced her departure after 15 years with the Swiss watch industry group. She said “I leave the Foundation knowing it is sounder than ever before, thanks to the unwavering support of its founders and partner brands.”
Credit Watches & Wonders
With changes in the major watch & jewellery fairs, just how important is brand diagnosis?
In July we wrote about the impending changes to MCH Group, organisers of Baselworld. Since then Baselworld has been shelved and replaced by HourUniverse. Described as ‘a new hybrid platform for the watch, jewellery and gemstone industries,’ with one live show to be held in Basel each year, the new approach and platform is a result of ‘industry feedback and current challenges’ facing the world. But is this a knee-jerk reaction to the loss of some major brands from the show? Certainly consumer feedback is integral to any strategic decision-making, however any expert in strategy will tell you that effective diagnosis and the subsequent tactical implementation should never be rushed.
No greater example of the effectiveness of diagnosis comes from Gucci. In 2004, after the departure of Tom Ford and Domenico De Sole, Gucci Group sent shockwaves around the world of luxury by appointing Robert Polet as its new CEO. Previously from Unilever, the headlines read ‘What do frozen fish and ice cream have to do with $8,000 crocodile handbags? Robert Polet is about to find out.’ Gucci Group made a seemingly unthinkable move and chose talent and ability over knowledge of the market, trusting that Polet would use his skill to do the appropriate diagnosis in order to create a strategy and implement it. Many scoffed not only at his appointment but also at his start date - July 1st, just as the entire European luxury industry was heading off on holiday! But whilst the luxury industry was sleeping Polet was doing his diagnosis, giving him time to think, learn and understand. He appreciated that proper diagnosis takes time and it was this ability that enabled him to double revenues and triple profits.
We very much hope that we are wrong, but we suspect that Baselworld under its new guise of HourUniverse will result in little change.
Credit MCH Group
Baselworld asks investors to accept rescue package
Lupa Systems, an investment company run by James Murdoch, younger son of Rupert Murdoch, has put forward a rescue package to MCH Group AG, owners of Baselworld and Art Basel to save the company, following the impacts of Coronavirus and the exit of Rolex, Bulgari and the Swatch Group from the show.
According to Bloomberg, with the abandonment of such major players from the show, combined with the cancellation of both Baselworld and Art Basel this year, the MCH Group is anticipating a fall in sales of up to $180 million.
The deal with Lupa Systems is thought to be of around CHF 100 million for 30-44% of the group and at an Extraordinary General Meeting to be held on 3 August 2020, the election of James R. Murdoch (Founder and CEO Lupa Systems), Jeff Palker (Managing Partner and General Counsel Lupa Systems) and Eleni Lionaki (Partner Lupa Systems) to the Board of Directors will be proposed.
In addition to the capital increase, the Canton of Basel-Land and the Basler Kantonalbank have offered to extend the repayment period of their CHF 35 million and CHF 40 million loans by five years.
In a bid for financial and structural strengthening to overcome the corona crisis and implement the long-term strategy MCH Group has said that “If this overall package were to fail, extremely little time would be left for developing and implementing alternative restructuring solutions before it was too late.”
Baselworld, MCH Group
Dramatic changes for Baselworld
In the heart of Switzerland lies Basel, home of Baselworld, the global watchmaking, jewellery, gemstone and related industries trade show. For over a century, Baseleworld has been a must-attend show for major brands, discerning buyers and influential press from around the world. An opportunity for this community to unite and discover first-hand, new trends and innovations launched by top brands.
Run over 6 days with 82,000 visitors and over 3,500 journalists, Baselworld has suffered a blow over the last 18 months with major brands including Bulgari, The Swatch Group and most recently Rolex, confirming that they will no longer participate in the show.
With over 60 gem specialists still participating, the show will remain an important opportunity for Amma Group to view and purchase stones. However, like so many organisations going forward, Baselworld will be judged on its agility and ability to innovate in order to find a ‘new normal.’
