Better-than-Expected BaselWorld 2009

The Omega exhibition space in the Watch Hall at Baselworld 2009BaselWorld 2009, the world’s biggest watch and jewelry trade show closed Thursday and the verdict on business there in this year of global final crisis?

Much better than expected, despite a drop in attendance. Indeed, the Basler Zeitung, the newspaper serving Basel, Switzerland, headlined the story as “BaselWorld Exceeds Expectations.”

Granted, those expectations were cautious—among exhibitors, retailers and even show officials—when the eight-day BaselWorld opened Mar. 26 because of the impact of the global financial crisis on the watch and jewelry industry worldwide, especially in the United States.

But better-than-expected business, especially in the show’s busy watch halls, showed “The industry is alive,” said René Kamm, chief operating officer of the MCH Group, BaselWorld’s owner, just before it closed. And added Sylvie Ritter, the show’s director, that shows retailers “still have confidence” that business will improve in the second half “by Christmas 2009 and Chinese New Year 2010.”

The Patek Philippe exhibition space in the Watch Hall at Baselworld 2009And that’s important for vendors and retailers worldwide because BaselWorld, more than any other major industry trade show, is a weathervane of how the economic winds are blowing in the world’s watch and jewelry industries. Many of the show’s 1,952 exhibitors had feared business with retailers—affected by the world’s economic crisis—would be as cold and cloudy as the weather outside for most of the show. But—like an unexpected sunny, spring day just before closing—many exhibitors, said they had satisfactory orders and a number of them—such as Timex or, at the very high end, Steinway Watches and Maîtres du Temps–did good business. “The mood appears better than the circumstances,” Christoph Wellendorf, of the famous German jewelrymaker, Wellendorf, told the show’s “Daily News.”

In terms of business for 2009 as whole, most watch companies expected overalls sales to be flat or even under 2008, a record year. Nicolas Hayek, chairman of the Swatch Group, the world’s largest watchmaker with 17 brands, from popular- to luxury-priced, expects sales to be flat in 2009’s first half and have “modest growth” in the second.
In the jewelry halls–which saw less buyers than n the watch halls and had almost two dozen companies drop out before the show (especially among Hong Kong pearl firms)—a number of jewelry firms, who had expected dismal sales, said their sales actually equaled those of 2006 or 2007. A handful even equaled 2008. As one put it, “we came with very reserved expectations, and were positively surprised.”

As expected, attendance was below 2008’s record 100,000, by about 12 percent, said Sylvie Ritter, the show’s director. Attendance by Americans—usually 7-8 percent of the total—was down, “reflecting the [impact of the] economic turbulence in the United States on U.S. buyers and the industry there.” While most watch brands said they had the same number of appointments with U.S. watch and jewelry retailers and firms as 2008, most said companies sent fewer people and they saw 30, 40, 50 and even 60 percent fewer Americans than in 2008. “That doesn’t mean a lot of retailers and wholesalers missed the trade show,” said Ritter. “The buyers were present, but their delegations smaller” for budgetary reasons and “the economic instability.” Also, some exhibitors said that a number of smaller U.S. retailers had told them they were going to summer’s JCK show in Las Vegas or the JA show in New York “once they see how things develop, economically,” as one vendor put it.

And some events normally at BaselWorld—such as the Gemological Institute of America’s Basel GemFest—were cancelled this year for budgetary reasons.
Still, some big retailers—like Macy’s, Zale and Sterling—were at Basel as were others like London Jewelers of Long Island, N.Y., or Saks Fifth Avenue.

In trends, there is a return to what many watchmakers called “true values” by companies and customers. For customers, that means more reliance on established brands with solid reputations, and for both retailers and watchmakers, more emphasis on craftsmanship and intrinsic value, and less on pricing simply based on a brand’s ‘name,’ on extravagance and ‘flash’ on watches. “People want substance and quality, and less bling,” a spokesman for Omega told JCK.  That may be why there were so many stylish black watches at BaselWorld 2009, and white watches for women (both more than usual) and many ‘anthracite gray’ ones. There are also many regulator watches and retrogrades (even on quartz watches), more watches with open-work dials, and more brands with their own in-house developed movements.  The hold which mechanical watches has on the U.S. market continues to strengthen, with Bulova, for example, debuting stylish self-winding mechanicals (with open apertures) for women, and Hamilton’s see-through Ventura XXL. And many brands, such as Festina, are offering new, attractive, more price-accessible collections, “in view of the economic climate.”

Among gemstones, business in red spinel and mandarin garnet reportedly was good, while big, high-end stones seemed to do very well, and mid-range stones (i.e., 1 ct.) sold well. In the diamond section, dealers said they hoped the business overall at BaselWorld would help stabilize the diamond market. Among pearls, a trend in colored pearls in shades of gold and brown was evident.

Caption: Despite the worldwide economic crisis, the watch halls of BaselWorld 2009 seemed as busy as previous years