Swiss Shows come Roaring Back

What a difference a year makes! The gloom overhanging the international spring Swiss watch shows—and the watch business generally in 2003—was replaced at this year’s shows by a sense of optimism, strong sales gains, and increased attendance by retailers from around the world, especially from the United States.

Concerns about Asia’s SARS epidemic, terrorism, and the start of the war in Iraq dampened attendance and business last year at international trade fairs in Europe and elsewhere. But this year, the eight-day BaselWorld 2004—the world’s oldest watch and jewelry trade show, featuring 2,186 companies from 44 nations—reported a 39% gain in attendance over 2003 (and 8.2% over 2002) to 89,350.

As early as the second day, visiting Americans already had equaled their entire 2003 attendance figure (800). “People are here in a big way this year, way ahead of last year,” noted Lisa Roman, Breitling USA marketing director. In Geneva, the 14th Salon International de la Haute Horlogerie (SIHH)—the annual luxury watch fair whose 16 brands represent a third of global luxury watch sales—had more than 10,000 visitors. This year’s attendance figures equaled those of 2002, even though the 2004 seven-day show was a day shorter. Even at Franck Muller Watchland, the Geneva luxury watch firm beset since 2003 by a bitter dispute between its founders, attendance and orders at its annual three-brand spring show were up strongly, following 2003’s sales gains.

“Business [at BaselWorld] was wonderfully lively, a tremendous success,” said a delighted Jacques J. Duchêne, president of BaselWorld’s exhibitors committee. Franco Cologni, president of SIHH’s supervisory board, declared at his show’s end: “The crisis of 2003 lies behind us; luxury watchmaking can resume its upward curve.” SIHH’s final report said business at the 2004 show topped that of 2001—a record year—in amount and value, “in spite of concern for political, social, and economic trends at the international level.”

Of course, reasons for many of the 2003 worries remain, including possible effects of terrorism and the Iraqi war on global politics, business, and consumer confidence. Also, both the euro and the Swiss franc rose against the dollar in late 2003 and early 2004, affecting what jewelers and other U.S. retailers will pay and charge for watches and jewelry.

Buoyant and buying. Still, the buoyant mood of retailers and suppliers indicated they’ve “overcome those concerns,” as a leading Basel newspaper put it. Aiding both the mood and business at the shows were reports this spring of renewed strength in the U.S. economy, the lead horse for world business; Swiss watch exports’ best quarter since early 2001 (up 15.9% in Jan.-March 2004, up 19% in the United States alone); solid holiday luxury watch sales; and sales gains in early 2004 by various watch brands and bellwethers such as LVMH, the Movado Group, and the Swatch Group.

As a result, many retailers and vendors interviewed at the Swiss shows said they’re “confident”—an oft-used word—about their business locally this year and business in general. BaselWorld exhibitors, especially in its often-crowded watch halls, were enthusiastic about their U.S. clients’ mood, their openness, and the orders they generated. Hugh Glenn, president of Cyma USA, cited the “bullishness” of U.S. buyers, and Stuart Zuckerman, vice president of Citizen Watch Co. of America, noted “a good feeling about this year’s show. Retailers are upbeat.”

Jill Golden, of upscale Concord watches, agreed. “There’s a genuine sense of optimism among retailers we’re seeing,” she said. “They want to buy, and they want to be impressed” by the new products. “Retailers this year are open to lots of different possibilities,” said Michele Barouh, for whom the popular Michele fashion watches are named. “Last year, they were conservative in what they wanted to see and order.” As Maurice Lacroix’s Carol Levy put it, “Their wallets are open, and they’re ordering broader and deeper.”

‘Best-yet.’ Some exhibitors even called this year’s fair their “best ever,” a significant turnaround from 2003, which many had called disappointing. Cindy Livingston, chief executive officer of Callanan International, which makes Guess and Nautica watches, said, “For us, the show was simply fantastic.” Ritmo Mundi’s first two days were “as good as all of last year’s fair,” said owner Ari Soltani. And Philippe Dufour, speaking for the Académie Horlogère des Créateurs Indépendants (independent high-end watchmakers), called his group’s results “excellent.”

Enhancing the mood was sunny weather and the fact that 2004 marked the end of years of restructuring and construction of the Fair’s several large buildings, including a 20-story glass tower for administration. Exhibition Plaza itself was done over, with temporary glassed-in tented buildings for restaurants surrounded by containers of flowers and trees. At day’s end, attendees relaxed there, listening to jazz bands and quaffing Swiss beer.

A well-attended attraction at BaselWorld 2004 was the new Hall 6, a 28,000-square-meter facility built in eight months on a former railroad yard. It housed more than 650 nonbranded watch and jewelry vendors in 27 national pavilions. Also in Hall 6 was the huge Hong Kong group (332 companies), which many buyers hadn’t seen last year, when Asian vendors were banned by the Swiss government because of the SARS scare.

First-time Basel participants this year included the Dubai Gold & Jewelry Group and the Association of Russian Watchmakers—Russia’s 10 largest watch manufacturers, seeking foreign business and distributors.

Awards and information. BaselWorld also was a platform for expansion and renewal. Both Bulova and Speidel were there to expand or open foreign markets, and their officials were busy most of the time. Several watch brands—including Milius and Harwood—relaunched after many years’ absence, and renowned watch designer Gerald Genta came out of retirement to launch his high-end Gerald Charles brand.

Special events at BaselWorld included “Watch of the Year 2004” (selected by German and Swiss newspaper and watch magazine readers); Guess Watches’ selection of two young models to be the new “Face of Guess Watches” in global promotions; the Hublot Prize, awarded annually by MDM Geneve to a little-known humanitarian; Omega’s press conference with Gene Cernan, last man on the moon, and Matt Wallace, manager of NASA’s Mars Rover project; the annual Prix Golay jewelry prize awarded by the Golay Group; and finalists in the HRD Awards for diamond jewelry.

Marketing and branding dominated seminars of the Israel Diamond Institute and the Diamond Trading Company, while the Gemological Institute of America’s Basel GemFest 2004—with top execs from the GIA Gem Laboratory—provided a comprehensive look at GIA’s diamond cut research project.

Special events at SIHH in Geneva included the debut of a new exhibit by Cartier on its Santos watch, 100 years old this year, and pioneer aviator Alberto Santos-Dumont; an SIHH exhibit on watch straps and bracelets through the years; and the world premiere of a new film about the Cousteau Society’s exploration of the Red Sea, co-sponsored by IWC luxury watches.