BaselWorld: The Big are Getting Even Bigger

Last look: Following the close of this year's show, construction continues on a vast new exhibition hall that will span over the Messeplatz.

Basel, Switzerland—Although BaselWorld 2012 drew only 1% more buyers this year—some 104,300 from more than 100 countries, show officials said—the mood was all about getting bigger.

The 40th world watch and jewelry show, which ended Thursday, was about bigger sales in Asia, particularly Greater China, and Russia; plans for bigger stands at the 2013 show to accommodate rising attendees; and bigger needs for Swiss-made movements to meet demand.

Despite many exhibitors reporting a slowdown in sales in the Eurozone, where austere measures to prevent defaults have stymied sales and consumer confidence, there were mostly positive reports with most watch brands reporting strong sales in the United States, the BRIC countries, and the Far East.

Demand in Japan, which saw sales dive a year ago when it was struck by a tsunami and earthquake, has seen a recoup in sales. And any fears of a slowdown in China were allayed, too.

Boom Markets: Russia, China, Latin America

“We registered an exceedingly positive mood among our customers throughout the entire show,” said Jasmina Steele, spokesperson at high end watch brand Patek Philippe.

“On the sales side, we were able to welcome a very large number of retailers, marking an increase of 30% over last year, said Françoise Bezzola, vice president communication at TAG Heuer. “This show is a not-to-be-missed moment for all players from the world of watches.”

While the watch industry, which reported last year that business has rebounded, continues to grow, jewelry business also was up this year, thanks mostly to the deep pockets of Russian retailers.

“The purchasing behavior was gratifying and the potential in the boom markets, including Russia and Latin America, highly promising,” said Ralph Chow, director product promotion at Hong Kong Trade Development Council.

Added Giuseppe Picchiotti, the owner of Italian brand Picchiotti: “We are happy in respect of the sales we have achieved. Precisely our business with South East Asia ran very well indeed.”

Any grumbling among exhibitors wasn’t about sales but about plans for next year’s BaselWorld, April 25 to May 2, 2013, when a new and expanded exhibition halls premiere. Following the close of this year’s show, Messe Basel, producers of the show, will begin demolition in the front of Hall 1, the main watch hall, and finish building a wing over the Messeplatz plaza, connecting Hall 1 to a newly refurbished Hall 3.

New Exhibition Halls for 2013

Hall 1.0 Hall of Dreams, which houses some three- and four-story stands, will be expanded next year with even larger stands.

Many major brands report they may double in size their already gigantic stands, with others will be moving to new locations where they may be required to build larger stands. Hall 6, which houses Hong Kong and other non-Swiss exhibitors, will close and those exhibitors will move to Hall 4 across the street from the former Hall 3. Jewelry brands, primarily in Hall 2, will be shifted around as well, some moving closer to major watch brands, and others—reportedly some 400 companies—will effectively be eliminated from the fair as more watch brands move into Hall 2.

“Nearly all the brands will now be investing in their new stand for BaselWorld 2013 and enhancing their presence still further,” said Jacques J. Duchêne, chairman of the Exhibitors’ Committee. “This highlights the fact that we have a great deal of confidence in this event, because the world show will be giving us exhibitors even more opportunities to experience positive development in future.”

Indeed, some smaller watch brands may be squeezed out of more than just exhibition space. Some analysts say that despite the growth in the watch sector, some consolidation will likely occur among some of the small companies. Swatch Group, the world’s largest watchmaker, could hold back as much as 1 million movements.

Squeezing Out the Small Brands?

Smaller brands “lack the financial strength to develop movements and probably can’t afford to pay double the price they pay now-which will ultimately happen,” said Jon Cox, analyst at Kepler.

Nayla Hayek, chairperson at Swatch Group, has said the company probably won’t acquire beyond its nearly 20 brands this year in order to focus on production.

“If we miss our targets this year, it will be because of supply, not because we haven’t created enough demand,” Jean-Christophe Babin, Tag Heuer’s ceo, told Reuters.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com