The COVID-19 pandemic has wreaked havoc on our lives and on the world economy. Events are being cancelled or postponed worldwide to contain the global outbreak. For the watch industry, the most important events hit are the two major trade shows: Baselworld and Watches & Wonders. As the epidemic takes a heavy toll on the industry, it was to be expected that discussions between Baselworld and its exhibitors would be tough, especially regarding costs incurred by the cancellation of the event. An article released in Swiss Newspaper Le Temps this morning reveals that the tone of the discussions is getting increasingly tense.
The article released by Le Temps reveals that the exhibiting brands are threatening MCH, the organizer of Baselworld, to leave the fair if they do not obtain a full refund. It is important to note that this letter sent to MHC is signed by Hubert du Plessix, who is not only the head of the exhibitor’s committee but also a Rolex top-tier manager (Chief Investment Officer).
“failing that, we fear that this will be the outright end of Baselworld”
The costs incurred with the cancellation of the event would amount to CHF 18.36 million. It is difficult to calculate which costs might be covered by insurances. While events are covered by insurances in case of cancellation, what is actually covered may vary and some insurers may exclude communicable diseases from their policy.
According to the Baselworld regulation, the organization is not obliged to refund the costs incurred. However, MCH stated it would make a “significant effort”, proposing to absorb a large part of the costs and offered two options to the brands. The two options offered by MCH to exhibiting brands are:
- to transfer 85% of the amounts invoiced in 2020 for the upcoming edition, while the remaining 15% will be used to partially cover the costs incurred
- to transfer 40% of the amounts invoiced in 2020 for the next edition, to refund in cash 30%, while the remaining 30% will be used to partially cover the costs incurred
This is obviously not enough for brands who insist on a full refund and are now putting pressure on the organizer. Their letter to Baselworld mentions “failing that, we fear that this will be the outright end of Baselworld, all the more so as the dates chosen in January 2021 are not suitable for the jewellery, stones and pearls sectors, and that coordination with Watches & Wonders (ex-SIHH) no longer exists“. While the situation between exhibiting brands and Baselworld’s organization was already complex prior to the cancellation, this new situation is an even larger threat to the world’s largest watch and jewellery show. To be continued…
You can read the article in Le Temps (in French) here.