BaselWorld 2009 generated better business than expected, said exhibitors and show officials, despite the global economic crisis and a 13 percent drop in attendance. That’s “reassuring … after [2009’s] very difficult beginning,” said the Swiss Exhibitors Committee post-show report. “Signs are that the industry is returning to normality, rather than experiencing a really serious turndown.” Basler Zeitung, the newspaper serving Basel, Switzerland, headlined its closing-day story with “BaselWorld Exceeds Expectations.”
Granted, expectations weren’t high among exhibitors and buyers when the eight-day fair opened March 26, because of the global financial calamity’s impact on business. “The current economic crisis is at the heart of every conversation,” said Sylvie Ritter, BaselWorld show director.
Exhibitors and their national committees cited effects on markets worldwide, especially the U.S. market, of what they called the “unprecedented,” “challenging,” and “unsettled” economic situation. Italy’s 2008 jewelry exports to the United States, for example, fell 30 percent, while Swiss watch exports dropped 23 percent worldwide in January and February 2009, and in the Americas, especially the United States, almost 40 percent.
However, better-than-expected business, especially in BaselWorld’s busy watch halls, demonstrated that the jewelry and watch industries are holding their own. Affordable brands like Timex and Guess, and some high-end ones like Steinway watches and Maîtres du Temps timepieces, did good business.
“The industry is alive,” said René Kamm, chief operating officer of MCH Group, BaselWorld’s owner, when the show closed. “Something good always comes out of a crisis. More consumers are rediscovering secure [product] values and safe investments, and well-established brands and stable companies are able to profit from this.”
In the jewelry halls—which saw fewer visitors—a number of exhibitors who had expected dismal sales said business was on par with 2006 or 2007, or, for a handful, 2008. “The mood appears better than the circumstances,” Christoph Wellendorf, co-owner of German jewelrymaker Wellendorf, told the fair’s Daily News. Lisa Foo, marketing manager for Italy’s Pasquale Brune, noted, “Our expectations, which were initially a little conservative, were clearly surpassed.”
Better-than-expected results for many exhibitors indicate retailers worldwide “still have confidence” business will improve by Christmas 2009 and early 2010, Ritter told JCK. “The watch and jewelry industry is facing this difficult economic situation in an extremely positive way, and BaselWorld 2009 has given it new momentum.”
Because so many watch and jewelry companies do much of their annual business at BaselWorld, it’s considered a weathervane of how economic winds are blowing in those markets. Karl-Friedrich Scheufele, co-president of luxury watch and jewelry maker Chopard, calls it “the barometer for the rest of the year.”
Still, “better than expected” doesn’t mean record business. Buyers were uncertain and cautious. “They’re serious and selective, ordering less, instead of more than they need, as they once did,” noted one exhibitor. Jeffrey Cohen, president of Movado worldwide, said, “They’re watching what they spend and what they spend it on.”
Many watch exhibitors said they expect their 2009 U.S. sales to be flat or below 2008 levels, with some upturn by year’s end. Rolex chief Bruno Meier told NZZ, a German-language newspaper, that Rolex sales worldwide might equal 2005 sales. Jean-Claude Biver told Reuters news service that Hublot’s 2009 sales “might be a couple of percent above or below” 2008 levels, and Ebel co-president Loek Oprinsen said its sales would likely be under 2008’s, largely because of the weak U.S. market. Swatch Group chairman Nicolas Hayek expected flat sales in 2009’s first half, with modest growth in the second.
“In the end, this isn’t just financial, but also a crisis of confidence,” said Martin Bachmann, CEO of Maurice Lacroix. “When that begins changing, things will improve.”
Some 93,900 people from 100 countries attended BaselWorld, 12.9 percent less than 2008’s record 106,800, but more came from overseas (68.1 percent) than in 2008 (63.6 percent). Americans—usually 7 or 8 percent of the total—were noticeably absent. There were fewer Japanese, Indians, and Russians, but more attendees from Central and South America.
Most watch brands had about the same number of appointments with U.S. retailers and firms, including majors like Macy’s, Sterling, and Zale, and others prominent in the industry, like London Jewelers of Long Island, N.Y., and Saks Fifth Avenue. However, they sent far fewer people.
BaselWorld 2009 had more watch vendors (359) than in 2008, with dozens investing in new, larger, multi-floor stands to showcase products. However, in the jewelry sector, which Ritter said was “heavily affected by the [financial] crisis, almost two dozen exhibitors cancelled (especially Asian pearl companies). All told, there were 1,952 exhibitors, down from 2,087 in 2008.
Economics affected BaselWorld in other ways. Some companies reduced spending on show activities, and the Gemological Institute of America’s Basel GemFest was cancelled for budgetary reasons. The fair itself—for the first time in years—raised the one-day ticket price 25 percent (from 45 Swiss francs to 60) and pushed back the deadline for the expansion of its exhibition center from 2012 to 2013.
In trends, there’s a return to what Francois Thiébaud, president of the Swiss Exhibitors Committee and of Tissot watch worldwide, called traditional values. “There’s less extravagance, less emphasis on price, and more on craftsmanship,” he said.
For consumers, that means more reliance on brands with solid reputations for value, quality, and design, and for retailers and watchmakers, more emphasis on products’ intrinsic value. “People want substance, quality, and value in a timepiece, and less bling,” said Thomas Weigl, Omega’s national sales manager.
That may be why there were so many more stylish black watches at BaselWorld this year, such as Corum’s Admiral’s Cup Black Hull, plus many anthracite gray, chocolate, and bronze watches and dials.
There were many regulator watches, skeletons, and retrogrades, even on affordable quartz watches; more with open-work dials; and more brands with in-house movements.
Business in mechanical watches in the U.S. market is growing, with more firms adding new ones, like Bulova’s self-winding mechanicals (with open apertures) for women, and Hamilton’s large, see-through Ventura XXL.
Some didn’t debut new lines, knowing retailers would buy little or none. Many were more careful, as a vendor put it, pricing new models, while others, like Festina, added attractive, price-accessible collections.
In jewelry, too, many retail buyers sought what the Swiss Exhibitors Committee report called “unpretentious luxury”—jewelry that doesn’t call attention to the wearer, can be worn every day, or is identified with a leading brand.
Jewelry gemstones, from white diamonds to precious and semi-precious gems like amethyst, were smaller. Red spinel and mandarin garnet reportedly did good business, as did 1.00 ct. diamonds. Also evident: colored pearls in shades of gold and brown.