We covered earlier how Baseworld 2020 was set to be postponed to 2021. With that decision Baselworld probably figured they were covered for the rest of 2020 so they could just pick things back up in Jan 2021. Well, unfortunately it isn’t that simple.
In a confidential letter written to MCH (the organizers of Baselworld), Swiss brands who have already paid to attend Basel 2020 are demanding to be fully reimbursed. Shortly after, many additional European (non-Swiss) brands have followed in suit to put additional pressure on Baselworld to fully reimburse exhibitors.
While it’s being reported that conversations and letters between exhibitors and MCH have been civil, their demand has teeth; if not reimbursed for the costs of the 2020 event, exhibitors threatened to leave Baselworld behind (following in suit of many other brands who have already done so). A large exhibitor exodus of this type would make the future of Baselworld even more bleak than it already is at this time.
However, the issue of simply reimbursing or not reimbursing the exhibitors isn’t really a “do or do not” situation. Obviously, with the fact that these exhibitors have organized and banded together to put pressure on Baselworld, their threat is being taken seriously. However Michel Loris-Melikoff (director of Baselworld) revealed in a recent interview with Le Temps that “Rembourser l’intégralité, c’est impossible. Si je le fais, je compromets Baselworld [Google Translation: To reimburse the full amount is impossible. If I do, I jeopardize Baselworld].”
If the brands receive their money back, Baselworld’s chances of survival are in even greater peril than they were in before. But the pendulum of fate and economic ruin swings both ways in this scenario. Many of the brands that attend Baselworld aren’t the huge, big names that we hear about constantly. Smaller brands that also attend and buy exhibitor booths may not survive long if they don’t get their money back.
Loris-Melikoff acknowledges that the 30,000 CHF – 40,000 CHF (approx. $31,000 USD – $41,000 USD at the time of this coverage) that brands have paid to attend Basel 2020 represents almost the entire marketing budget of that exhibiting brand for the year. These smaller brands rely on that 30,000 CHF – 40,000 CHF being invested in attending the show to gain exposure and generate their yearly revenue projections.
If that money isn’t reimbursed by Basel, these brands may potentially be unable to sustain themselves until the next projected Baselworld date of Jan 2021. If they can get that money back, they can at least use that as a cushion to make it through 2020 (which is going to be a tough year) or at the very least to experiment with marketing budgets and explore more online exposure options.
Cognizant of the issues the exhibitors are facing (which also keeping their own self preservation in mind), Baselworld has offered a compromise to exhibitors:
Option A:
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- Carry over 85% of their Baselworld 2020 Payment to the next Baselworld 2021 event
- While 15% will be retained by Baselworld in order to cover their costs from 2020
Option B:
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- Reimbursing 30% of rendered payment
- Carrying over 40% of the payment to Baselworld 2021
- While 30% will be retained by Baselworld in order to cover their costs
There’s no real world yet on which options brands are seemingly going for. However my perspective here is that there is some compromise and attempt to make everyone happy on both ends. However, there is still the elephant in the room of how Baselworld has chosen to treat the 2020 event. The language that’s been cited by the event is that it’s “postponed” to 2021 – so Baselworld 2020 will be occurring in Jan 2021.
The language they’re using suggests then that Baselworld 2021 will continue as a separate event in 2021… so are we having 2 Baselworld’s next year? Am I overthinking this? Possibly – but this is something that exhibitors really need to think hard about. Do you still really want to be associated with this event if so much of your survival relies solely on it’s occurrence.?
The reality that I’ve always tried to keep in mind is that your revenue stream and general outreach should never rely on just one source. How people hear about you and how you make money needs to be diversified, because if one of your revenue/outreach streams fails, at least you have the other ones to help carry the weight. In the case of some of these brands who are suffering hard after not being able to attend Baselworld 2020 at the scheduled time, they’re learning this the hard way. Cliche, but don’t put all your eggs in one basket.
Sources:
https://www.baselworld.com/en/news/news/03042020_exceptional_measures
https://www.letemps.ch/economie/michel-lorismelikoff-baselworld-mode-survie
https://www.letemps.ch/economie/menacee-horlogers-suisses-baselworld-pourrait-mourir
https://www.letemps.ch/economie/fronde-generale-contre-baselworld
https://www.letemps.ch/opinions/cas-baselworld-exemple-ne-suivre
https://watchesbysjx.com/2020/04/baselworld-refund-mch-rolex-letter.html
Co-Founder and Senior Editor
Kaz has been collecting watches since 2015, but he’s been fascinated by product design, the Collector’s psychology, and brand marketing his whole life. While sharing the same strong fondness for all things horologically-affordable as Mike (his TBWS partner in crime), Kaz’s collection niche is also focused on vintage Soviet watches as well as watches that feature a unique, but well-designed quirk or visual hook.
That interview in French is really interesting. This response caught my eye: “Let’s be clear, full reimbursement is practically impossible. But never say never, stay open to discussion and, if another solution is viable, we will take it into account.” Since MCH is majority owned by state governments, I wonder if a third solution involving a govt injection of funds will be forthcoming.