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BASELWORLD 2018

Michel Loris-Melikoff took over as managing director of Baselworld in July last year. Within weeks, Swatch Group stormed out, accusing the exhibition of lacking the courage to adapt to the changing needs of the watch industry. Six months into the job, he has taken the radical decision to coordinate with rival show SIHH so that they run back to back from April 2020. Is this the bold leadership that will restore Baselworld to its former pre-eminence? Rob Corder spoke to Mr Loris-Melikoff to find out what else is under consideration for the future.

Sylvie Ritter, managing director of Baselworld, left her role in May 2018 after 26 years working for the show’s owner MCH Group. Her departure was marked with respect and gratitude from the industry and her bosses, but it soon became clear that the challenges facing the world’s biggest watch exhibition would not be fixed by just changing its figurehead.

Ms Ritter was replaced with Michel Loris-Melikoff, another MCH Group veteran, but this time an outsider to the watch and jewellery industry. The 53-year-old came from a legal background, having started his career as a lawyer within the private banking sector. He left that world 20 years ago and landed a million miles from it in the events business where an early success was a six year stint (2000-2006) running the Zurich Street Parade, a summer festival described as the biggest techno music party in the world that reportedly attracts around one million revelers.

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Think Woodstock but with banging house music on the shores of Lake Zurich.

 

Michel Loris-Melikoff brings experience of running Zurich’s Street Parade for six years to Baselworld. The question is whether he can bring some of the Zurich festival’s excitement to a 100 year old watch exhibition.

 

Keeping one million adrenaline-fueled ravers along with Zurich city officials happy is appropriate preparation for the monumental task Mr Loris-Melikoff has ahead of him. Within weeks of taking the top job at Baselworld, the event was rocked to its core by the news that Swatch Group would not be exhibiting in 2019.

Swatch Group chief executive Nick Hayek accused executives at MCH of arrogance and snobbery as he confirmed that all of the group’s 18 were pulling out of the show. In explosive interview with American network CNBC, Mr Hayek challenged the fundamentals of giant trade shows like Baselworld at a time when there is year-round communication with retail partners and customers. “The old traditional watch fair doesn’t make sense anymore. If you look around the world we are close to the consumer, close to the retailer,” he said in July 2018.

Mr Hayek went on to accuse Baselworld’s executive team of lacking the courage to make real progress. “I invited the executives and told them they have a big opportunity to change. The Swiss watch industry is booming so now is the time to make changes. All of the Swiss watch industry is ready to help, not just Swatch Group. But you must open up. You must do something now,” he urged. “We are ready to help, but for 2019 we are definitely out,” he concluded.

Mr Loris-Melikoff disputes that version of events and says he urgently wanted to keep lines of communication open, although did not want to elaborate on the record in conversation with WatchPro.

A handful of other exhibitors from Baselworld’s main hall followed Swatch Group out of the door. Corum and Maurice Lacroix were among them and for a few weeks last summer, people were questioning whether the remaining Hall 1.0 giants: Rolex/Tudor, Patek Philippe, Breitling and LVMH’s TAG Heuer, Hublot, Zenith and Bulgari might also leave, which would almost certainly have been fatal for the event.

 

The grayed out stands who just how big a challenge Swatch Group’s exit from Baselworld has created.

 

They have stayed, and been in consultation ever since with Mr Loris-Melikoff on how to re-shape not only Baselworld, but also Switzerland’s second biggest show SIHH, at which all of Richemont’s watch brands exhibit.

The watch industry’s most respected industry leaders including Thierry Stern, president of Patek Philippe and Jean-Claude Biver, non-executive chairman of TAG Heuer and LVMH’s Watchmaking Division, called for organizers of SIHH and Baselworld to communicate with the aim of aligning the two events for the benefit of brands, retailers, the press and watch consumers.

News broke just before Christmas that they had got their wish: Baselworld and SIHH will run back-to-back over two weeks from April 26 through to May 5 from 2020, the organizers announced. The synchronizing of the events will mean retailers and press from around the world can, if preferred, make a single trip to Switzerland, although they will have to travel between Geneva and Basel. SIHH will be held first from April 26 to 29 in Geneva, followed immediately by Baselworld from April 30 to May 5 in Basel. The calendars have been synchronized until 2024.

“Our two events have always been different, yet complementary. Re-syncing with Baselworld will further confirm Switzerland as the foremost destination for watchmaking in the world. This is something we welcome wholeheartedly, as it is in the interests of all,” said Fabienne Lupo, president and managing director of the Fondation de la Haute Horlogerie, which organizes SIHH.

Mr Loris-Melikoff added: “Baselworld and the SIHH are working for the industry and its clients. We have sought dialogue with the SIHH and together have found a solution, which benefits visitors, the media, and the entire watchmaking industry enormously. This partnership between the two most prominent exhibitions in the industry represents a major breakthrough for the future.”

At the time of writing, there had been no word from Swatch Group or other exhibitors that turned their back on Baselworld for 2019 on whether the synchronizing of the two shows would tempt them to return. Swatch Group has invited retailers to an event in Zurich running March 19 to 26, overlapping with Baselworld’s run of March 21 to 26, but details are thin.

 

Michel Loris-Melikoff, managing director of Baselworld.

 

Aligning Baselworld and SIHH will make it cheaper for people to visit both shows, particularly for executives from America and Asia that have been making two trips until now. Hotel prices are always expensive in Geneva, and as the weather in May will be far warmer than in SIHH’s usual wet and windy January slot, watch executives will be competing with tourists for rooms, but at least they should feel the warmth of the sun on their backs.

The cost of staying in Basel during the show has always been even a source of unhappiness, not least because the hotels are not particularly luxurious. There is only one 5-star hotel, Les Trois Rois, and it locked down for years in advance by the biggest brands. Baselworld has worked with the local hotel owners to bring down the price of rooms during the exhibition, but with tens of thousands of visitors chasing a very limited number of quality hotel rooms, people are always left with a bad taste in their mouths.

The work done by the Baselworld team with hotels has secured marginal gains. Twenty Hotels have signed up to be Official Partners or Preferred Partners of the show. Official Partners guarantee to a maximum price per night; are prevented from demanding a minimum length of stay (hotels routinely made people pay for a week, even if they were staying only 2-3 days); they will not increase prices over 2018 rates; and they will not compel guests to buy extras like meals. The seven 4-star Official Partners can charge no more than CHF 650 per night while 3-star establishments can charge CHF 350 for a double. “We have 75% of all hotel rooms in this area working with us as partners, which is a good result,” says Mr Loris-Melikoff.

The partnership programme may be an improvement over 2018, but it will not be enough to put a smile on anybody’s face. There also appears to be some confusion over the details of the partnership rules. In an e-mail exchange seen by WatchPro between the 4-star Hotel Du Commerce and a senior executive from the watch industry, the hotel asks for CHF 750 per night (not the permitted CHF 650) with a minimum of 7 nights, taking the total cost to CHF 5,250, not the CHF 1300 it should be for the requested two day trip. The hotel maintains it is sticking to the letter of its agreement with Baselworld, but that says more about the weakness of the agreement than it does about the altruism of the hotel.

This sort of dispute is disappointing, but the much more substantial issue is that Basel simply is not a great city to visit. Nothing Baselworld does can change that.

Or could it?

WatchPro asks Mr Loris-Melikoff whether there has been any discussion internally or with exhibitors about moving the event to a completely new location? Could it even be moved around the world so that it touches down in some of the greatest cities in the world, and those with the most vibrant watch markets? Hong Kong? Dubai? New York? Las Vegas?

After a long pause, he replies: “Maybe, maybe not.”

Our interview took place before the announcement that Baselworld and SIHH would run back-to-back from 2020 until 2024, so if there are any thoughts of taking the show around the globe, it will not be until 2025 at the earliest.

With the date and venue fixed for the next five years, Mr Loris-Melikoff is turning his attention to the mix of people attending the show. Five years ago this was a simple formula. Baselworld’s exhibitors needed the world’s wholesalers and multi-brand retailers to come and buy watches from the latest collections. In the case of Rolex, the company’s authorized dealers turn up to be told what their allocation of watches will be and to cut a cheque for the watchmaking giant. Other brands fought for attention with a view to getting listed.

They also needed the world’s press to appear because newspapers, magazines and associated websites carried news of the new collections to every corner of the globe. Watch brands would hold up the launches of their watches until Baselworld so that there was the excitement of discovery for journalists.

Today many brands are more interested in bypassing multibrand retailers and much of the media in favour of speaking directly to consumers and selling to them through their own stores or ecommerce sites. This means they want their best customers to come to Baselworld and get first dibs on new models. In other words the show has to appeal to very wealthy collectors.

This is a conundrum for Mr Loris-Melikoff because now the exhibition has to deliver for four constituencies: brands, retailers, press and the public. “We do have to think about these kinds of questions because the market is changing. You might also ask whether Baselworld can become more of a B2C show. These questions are top of our list we need to find an answer to,” he says.

The absence of Swatch’s 18 brands means there is a massive space in the main Hall 1.0, which is being used to provide better catering, meeting space and improved press facilities.

“The design of the new show is done. We have an idea about Baselworld 2020 and we have an idea about Baselworld 2022. This vision was approved by the board of directors last week. We are now going to speak to the likes of Rolex, Patek Philippe and the big brands in Geneva. If they approve it, we are going to go public with the vision, most likely in January. We will present it to exhibitors during the show in 2019,” Mr Loris-Melikoff describes.

“There are not 10,000 possibilities, there are just a few. We can stay as we are or we combine B2B with B2C, or we go entirely B2C. Those are the three possibilities, and we have to change. Baselworld cannot remain a pure B2B platform, so that takes us down to just two options,” he adds.

It could be that Baselworld as an organizer leaves the decision on who can come to the show to the exhibitors. “One option we are talking about is that it should not be my role as managing director of Baselworld to decide who should be allowed to come into the show. Maybe the brands should be in charge of inviting their clients and their consumers. That is an approach we are talking about,” he explains.

Again, if you follow this train of thought, you can see how it might work for brands like Audemars Piguet and Hublot that do a lot of direct to consumer business, but what about businesses like Citizen that need to see thousands of retailers and would have little interest in consumers crawling all of its stand.

Every way you turn, there are pluses and minuses to any chosen path. It reminds WatchPro of the Brexit negotiations, I suggest to Mr Loris-Melikoff, and there is a danger that by searching a compromises between competing camps, Baselworld may end up pleasing nobody. “You should consider all needs, but it is impossible to make everybody happy,” he concedes. “You have to accept that.”

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Rob Corder

The author Rob Corder

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