BaselWorld 2005 ends with strong business results, despite weak dollar’s effect

BaselWorld 2005 ended Apr. 7 on an upbeat note. Some effects on business by the weak U.S. dollar and sluggish west European markets were effectively off-set by strong demand from growth markets in Asia, the Middle East, and Eastern Europe.

Some 89,700 visitors—only 0.4% more than 2004, but the highest in many years—from 100 countries attended the 10-day show (Mar. 31 – Apr. 7) held in Basel, Switzerland. That figure doesn’t include the 30,000 people working for 2,197 exhibitors from 45 countries—including more than 90% of all Swiss watch brands–or 2,352 journalists—a record high this year—from both trade and consumer press around the world, such as the New York Times, BBC, and leading papers of the Middle East and Asia.

This year’s fair was also the largest in size, with six huge thematic buildings—which BaselWorld quaintly calls “halls”—with a total gross exhibition area of some 160,000 square meters. That includes many impressive multi-level exhibitor stands, especially in the watch and gem halls. Hall Three—the completely redesigned and refurbished multi-level “Hall of Elements,” home to the show’s diamond, gem and pearl exhibitors—was officially reopened at BaselWorld 2005, capping a $668 million multi-year makeover of the trade fair.

Upbeat.Pre-show concerns by exhibitors and show managers that the U.S. dollar’s high exchange rate with the Euro and Swiss franc might dampen attendance (the weak dollars also affected hotel, meals and other costs) and orders by U.S. visitors were “unfounded,” BaselWorld show director Sylvie Ritter told JCK shortly before the show’s close. (There were no final figures at press time on U.S. attendance, usually 6-8% of show attendees).

Generally, most exhibitors seemed pleased with their BaselWorld contacts and business, which an end-of-show report called “extremely satisfying.”

“This was an excellent year [for exhibitors and business]. It ran the best way possible, and once again, exhibitors at BaselWorld proven their strength in innovation and creativity”, said a very pleased Jacques J. Duchêne, president of the Exhibitor’s Committee, who celebrated his 50th year of participation in the annual Basel show.

Dollar’s effects.&/>Still, the dollar’s weakness against the euro and Swiss franc (dropping during the show to just 1.15 Swiss francs) did affect some vendors’ dealings with American clients. There was far less traffic in the European national pavilions in Hall Six (“Hall of the Universe”) than in the Asian, Indian, Turkish, and other national delegations, which were generally crowded. Hong Kong, especially, with the show’s largest delegation at almost 350 watch and jewelry exhibitors, had heavy traffic and benefited from the euro/dollar situation.

Some European jewelry designers at Basel told JCK they were trying to maintain price stability by using fewer precious stones and metals, or more alternative materials, and by keeping labor costs. In the refurbished gem hall, some dealers said they were attracting or holding onto American buyers by offering two prices to compensate for the euro’s impact: one price for American buyers and one for everyone else. Even among in the watch sector—where business was generally undeterred by the euro/dollar situation, some fashion watch buyers said they were looking for more affordable models.

Good business. Still, many exhibitors in all sectors were happy with the business and contacts they at the 2005 BaselWorld, auguring a good 2005.

In the refurbished “Hall of Elements” (gemstones, diamond pearls, Marc David from David & Son, “observed a high level of purchasing enthusiasm and we are very satisfied with the quality of the visitors.” Raj Mehta, senior vice-president of Rosy Blue, one of the world’s largest diamond manufacturers, who said the show is “of worldwide significance” for his firm, rated this Basel show “very high,” in business results.

In the prestigious jewelry hall 2, “We had very good contacts. The quality of our visitors increased again,” noted Robert Stern from H. Stern Jewellers. A satisfied Christoph Wellendorff of Germany’s Wellendorff jewelry company, said BaselWorld 2005 had “beaten all records – sales were outstanding.” As Wendell Figueroa of Damiani said, the currency issue was of less concern to buyers and retailers of fine jewelry because consumers who can afford it won’t quibble with a price rise.

Watch sales. In BaselWorld’s crowded watch halls, the weak American dollar’s impact on business was negligible. Fashion watch brands continue to do good business (though some buyers said they were looking for more affordable models) and most upscale watch brands had already built the currency differences into their prices—though some have tempered the amount of increase. Other high end brand managers—some of whom said their business was strong at Basel and in some instances outstanding–told JCK similar things “The weak dollar hasn’t affected our sales,” said the head of one U.S. company which distributes several Swiss brands. “The exchange rate bothers customers, sure, but watch companies and retailers have already worked it into their pricing worldwide.”

The head of a major U.S. jewelry retailer agreed. “Currency rates change every few months,” the person said. “We don’t buy based on currency fluctuations. We buy for our market, and we haven’t changed our buying plans here because of the dollar.

Watches, overall, did very well. Upscale and luxury Swiss watch brands—most of whom had already translated currency exchange effects into prices increases of several percent—generally reported very good business. Indeed, the Federation of the Swiss Industry, and François Thiébaud, worldwide president of Tissot watch and head of the show’s Swiss Exhibitors Committee, said Swiss watch exports may increase as much as 10% this year (up from early projections of 6%), thanks to BaselWorld orders. “We have been able to make good business transactions,” said Thiébaud.

Asian watch brands did very good business, too, at BaselWorld. Stu Zuckerman, vice president of sales and marketing at Citizen Watch of America, called this Basel “our best show” while orders of Hong Kong watchmakers increased “20 to 30 % compared to 2004,” said Lore Buscher, a regional director of the Hong Kong Trade Development Council. (BaselWorld usually provides up to a third of Hong Kong watch and jewelry makers’ annual business.)

One billion Swiss francs. The news was good for other aspects of BaselWorld 2005. There were few complaints this year about lack of hotel beds (some 800,000 overnight stays are booked in Switzerland, Germany and France during for the show); about unfriendly taxi drivers or knockoffs of other exhibitors wares.

Thanks to the show’s heavy seen and unseen security (against both criminals and possible terrorists), there were only seven reported cases of theft on the fair’s premises, and a smashed jewelry showcase at nearby Hotel.

Finally, the show pleased both its owner/organizers—MCH Swiss Exhibition, which collects about 60 million Swiss francs ($50 million)—and the Basel region, which provides about one billion Swiss francs (about $834 million) in business for area hotels, restaurants, tourism, logistical supplies, and other businesses. Half of that is spent in the city of Basel itself.