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Baselworld 2018 Will Be Two Days Shorter; Ongoing Declines Plague Swiss Watch Industry

Baselworld 2017 opening day.

Baselworld, the annual watch and jewelry show in Basel, Switzerland, will run for six days instead of eight days next year, in the wake of lower attendance and declining sales in the Swiss watch industry. The decision comes on the heels of the 2017 show, which ended March 27. The fair officially hosted 200 fewer exhibitors (a drop of 13.3%) and for next year, there will be at least one defection by a major brand – Hermès – which announced it will join the Geneva Salon International de la Haute Horlogerie, held in January. In a post-show statement, Sylvie Ritter, managing director of Baselworld, said “the industry is currently going through a challenging phase, which particularly affects smaller companies. Listening to our exhibitors and in agreement with the members of the different committees, we have decided to reduce the duration of the show and adjust the prices accordingly.” Baselworld 2018 will be held from Thursday 22 to Tuesday 27 March 2018.

Hermès will decamp for SIHH next year.

The reduced presence at Baselworld is a reflection of the state of the industry, rather than the show itself. Following two straight years of decline, global exports of Swiss watches have continued to tank for the first two months of 2017. According to the Federation of the Swiss Watch Industry (FH), exports declined 10% in the month of February, with a 26.2% decline in exports to the crucial U.S. market. In 2016, the value of Swiss exports stood at 19.4 billion Swiss francs, which is 9.9% lower than in 2015. “With this result, the industry has returned to its 2011 level and seen an end to the growth of 15% achieved between 2011 and 2014,” says the FH. If the two-year decline becomes a straight three-year decline, it will be the first time such a long slump has occurred since the 1980s, the height of the quartz crisis.

There are more than 2,000 exhibitors at Basel, and the fair is attended by 106,000 visitors.

Industry expert Joe Thompson of Watch Time magazine, who has been covering the industry for more than three decades, says the situation is worrisome. “Even the great recession of ’09 only lasted a year; we have just had two straight years of decline, and first the two months of this year are off to a bad start. So, if it hasn’t hit bottom, then it’s getting serious.” The reasons for the current downturn are more complex than the quartz crisis that edged out mechanical watchmakers in the ’70s and ’80s. Significant forces have plagued the industry over the past two years. The boom in China during the 2000s has been stifled by the Chinese government’s crackdown on luxury gift-giving, resulting in a 50% drop in exports to Hong Kong over the past four years. Currency fluctuations have also had a negative effect, particularly the strong Swiss franc, and declining tourism in the U.S. and Europe for political reasons have curtailed luxury shopping.

Evening rush hour at Baselworld 2017.

The result is a watch industry that is overstocked and, many say, overpriced, resulting in a surge in the grey market. Richemont, whose brands include Cartier, Piaget and Vacheron Constantin, bought back millions of euros in inventory from retailers in 2016, and cut 200 jobs from its watchmaking staff. As for coping strategies, companies have been reducing prices and revising product development strategies, boosting lower-priced categories and putting the brakes on new high-horology showpieces, a trend that was evident at this year’s Baselworld fair.

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