When its organizer announced that 2020’s Baselworld exhibition could not take place because of the Coronavirus pandemic, exhibitors inevitably asked for their money back.
But, having officially “postponed” rather than cancelled this year’s fair, parent company MCH Group aimed to hold brands to the terms of their contracts; essentially saying they would lose their deposits in full if they did not re-book into the 2021 show, and would even be charged a 15% administration fee on the full cost of their bookings if they did move to January next year.
This prompted Hubert du Plessix, a senior director of Rolex and president of the Committee of Swiss Exhibitors at Baselworld, to write a widely circulated letter on behalf of the committee accusing MCH Group of “rigorous reading of contractual provisions to justify its position.”
“This lack of consideration on the part of the leaders of the MCH Group unfortunately recalls an era that we thought was over,” Mr du Plessix continues before warning: “Full refunds would be the best way to encourage exhibitors who can participate in a future edition of Baselworld. Otherwise, we fear that this will be the end, pure and simple, of Baselworld,”
A day after the row burst into the open, Baselworld’s managing director Michel Loris-Melikoff responded in an interview with Swiss daily newspaper Le Temps, and suggested that the exhibition and its exhibitors face a common challenge and need to work towards a shared goal. “It is not a question here of pitting the big MCH against the small exhibitors; we are all in the same boat,” he said.
In Mr du Plessix’s letter, he notes that MCH Group had said in a statement on March 26 that it had “abundant liquidity”. He also pointed to the fact that its largest shareholders are state-owned bodies including the cantons of Basel and Zurich, which hold 49% of its equity, suggesting that MCH Group’s owners can and should support the business, not its customers.
Mr Loris-Melikoff disagrees. According to the article in Le Temps, he expects exhibitors to contribute to costs of CHF 18.36 million already incurred for the 2020 show. It would be “impossible” to reimburse deposits in full without jeopardizing the survival of the exhibition.
The group is currently holding deposits worth more than CHF 20 million for the 2020 fair and around half of the CHF 18 million cost incurred is for renting the exhibition halls, which MCH Group owns.
Mr Loris-Melikoff says MCH Group is being flexible rather than rigidly enforcing contractual obligations, and has made a reasonable offer for brands agreeing to participate in 2021. “We have proposed two solutions, the first of which seems to us the best since it allows exhibitors to carry over 85% of the amounts invested in the next edition. And we only keep 15% to partially cover our costs,” he suggests.
MCH Group’s revenue could drop by CHF 130 million to CHF 170 million from a total of CHF 445 million in 2019, Mr Loris-Melikoff reveals. “Faced with this situation, all MCH trade show managers must exercise great caution. Our responsibility to the industry is to take all the right measures to keep MCH running through this crisis and, therefore, to be able to continue to organize Baselworld,” he cautions. “Baselworld is in survival mode,” he adds.