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Top-Level Rolex Exec Pushes Back On Baselworld’s Planned January Dates And 2020 Refund Policy | April 07, 2020 (2 comments)
Basel, Switzerland—After the 2020 Baselworld Fair was canceled due to the COVID-19 pandemic, the show’s management—a relatively new team supposedly tasked with reversing the fair’s tone-deaf policies—has demonstrated once again just why the show has grown so unpopular. But now the stakes are much higher, as it has raised the ire of the Rolex executive who also heads its exhibitor board.
In an April 3 press release, ironically headlined “Exceptional Measures In Support of Exhibitors,” Baselworld management announced the dates for the 2021 fair will now be January 28 - February 2. The new dates not only conflict with Centurion and the Tucson gem shows in the United States, but are an abrupt departure from the much-touted return to late spring dates and alignment with the SIHH Show that the industry asked for and that would have begun in 2020 if not for the virus.
That, and plans to not refund exhibit fees for 2020, may well spell the end of the fair, warns Rolex executive and Swiss watch industry leader Hubert du Plessix.
Related: SIHH, Basel To Realign Dates
The decision to schedule Baselworld at the end of January is rumored to have been made to continue aligning it back to back with the SIHH show, now called Watches & Wonders Geneva. But at press time that show had not announced its 2021 dates. Furthermore, a letter from du Plessix to Baselworld management said that the new dates would mean “coordination with Watches & Wonders (SIHH) no longer exists.” Retailers worldwide had pressed for the two shows to be held back-to-back, eliminating the need to travel to Switzerland twice in a season.
Still, exhibitors speculate a move by SIHH would be the only reason for Baselworld to move to January. “It has never been in January,” says Vishal Kotahwala of Royal India USA/RIU Jewels/Aero Diamonds Inc. His company has exhibited in Basel for 40 years.
Whatever the reason for the date change, Kotahwala says Baselworld management did so without surveying exhibitors from the jewelry and gem sector or discussing it with their representative organizations. Fair officials say the decision was made with the knowledge of its advisory board, which represents all three sectors.
"We make it our responsibility to stay in close contact with our exhibitors and to make decisions bilaterally. Date issues were discussed extensively at the Advisory Committee which represents all 3 industries (watch, jewellery, gems & stones industries). As Baselworld represents multiple industries it is more complicated to change the date than it might be for other similar events," Marie Kuttler, the fair's press officer, told The Centurion.
But jewelry and gemstone exhibitors are furious. Kotahwala says 68 exhibitors from the United States, India, Hong Kong, Thailand, and Europe have sent a joint response to Baselworld management, asking to move the fair dates back to April/May or, if unable, then to provide companies that can't attend in January with a full refund.
The letter reads in part, "While we do understand that you had to cancel the 2020 Basel show due to the virus and create a new event (January 28- February 2), we note that:
- None of us were consulted about the new dates. The new show timing poses an immense conflict and stress for many Basel buyers and exhibitors as there are three other important shows at this time of the year: Tucson (February 2-7), Vicenza (January 22-27) & Miami Antique (January 22-26).
- As a consequence, we should be able to cancel our participation to the January Basel show for a full refund.
Therefore, we kindly ask you as a group:
- To reconsider your new announced dates and revert back to the original April-May format.
- Regarding the financial aspect in your last email dated February 28, you propose two alternatives. In both options you retain an amount for the costs you incurred. We ask you to understand that we are not ready to agree with your financial requirements linked with a compulsory close deadline."
Exhibitor anger aside, Kotahwala is extremely concerned that the January dates will siphon off key American retailers who, as Rolex dealers, will feel obligated to attend Baselworld instead of the American shows.
“In these turbulent times where we should be working together to determine the best for the future of our industry. Importantly, we want to resolve the issue amicably, as it is important for the entire jewelry industry," he told The Centurion.
Adding insult to injury, exhibitors that can’t participate in the January event due to conflicts with the American spring shows are going to be out a significant amount of cash.
All exhibitors, whether they participate next year or not, will be out at least some cash under the current plan. The fair says 85% of exhibitors’ 2020 fees will be applied to 2021, but 15% will be forfeited to help show management cover expenses already incurred for the initial stages of setup before the 2020 event was canceled. Alternatively, exhibitors may request a cash refund of up to 30% of fees paid for 2020, but that comes with a significant cost: only 40% of their 2020 fees will then be applied to the 2021 fair and the remaining 30% will be forfeited to show management.
Michel Loris-Melikoff, managing director of Baselworld, defended the fair’s position as more generous than other organizations, pointing out that organizing an event on the scale of Baselworld requires substantial financial commitments ahead of time and that the fair was just days away from beginning set-up when the pandemic crisis forced its cancellation.
“We are all in this together and that is why we are committed to supporting our exhibitors as best we can in these turbulent times. We are offering unprecedented conditions, which go far beyond contractual obligations (general terms and conditions) and are much more generous than the vast majority of similar European shows that had to be cancelled or postponed. It seemed essential to make these significant financial efforts. I wish for all of us a return to business as soon as possible,” he said in the media statement.
"We offer various options for exhibitors wishing to remain in January 2021. Regarding exhibitors that do not wish to attend in January 2021, as per today [April 8], our general regulations foresee a partial refund," Kuttler told The Centurion in an emailed response.
Unacceptable, say the gem and jewelry companies that signed the letter. "We all have our own businesses which have taken losses during these times. We do not agree to sharing in your own losses. We would like to resolve these two issues amicably, and as a group be available to discuss other alternative time frames and financial conditions."
Kotahwala also points out that many jewelry and gem exhibitors, including his company, have demonstrated loyalty to the fair despite its having shrunk markedly in recent years.
Jewelry exhibitors may find an unexpected ally in the quiet, but very powerful, voice of du Plessix, who is not only a 30-year veteran and director of Rolex SA and Rolex Holding SA (heading its investment and logistics division and president of the Rolex pension business), but also is one of the most influential leaders in the wider Swiss watch industry. He has been president of the Comité des Exposants Suisses à Baselworld since 2019, and is a member of Baselworld Comité Mondial (world committee).
And he’s not happy about the date change, the refund arrangement, or the fact that exhibitors are being told to make their decisions before April 30 or forfeit all their 2020 fees, something that wasn't mentioned in the press release.
The article in WatchPro (as well as a similar article in Swiss newspaper Le Temps) says du Plessix wrote a strong letter to fair management expressing his displeasure. Although written in the careful, measured tones of a respected industry leader, the letter is very clear: failure to change either the dates or the refund policy may well spell the end of the fair. It read in part, “This lack of consideration on the part of the leaders of the MCH Group unfortunately recalls an era that we thought was over. Full refund would be the best way to encourage exhibitors who can participate in a future edition of Baselworld. Otherwise, we fear that this will be the end, pure and simple, of Baselworld, especially since the dates chosen in January 2021 are not suitable for the jewellery, gemstones and pearls sector, and that coordination with Watches & Wonders (SIHH) no longer exists.”
The letter was copied to the heads of other key industry associations, including Federation of the Swiss Watch Industry (FH), the watchmaking employers’ association of the Vallee de Joux (Apiah), the Swiss jewelers and goldsmiths union (Ubos), and the transnational committee of European watchmaking (CPHE).
Hubert du Plessix
Jiaxian Su, editor of the Singapore-based WatchesBySJX, also obtained a copy of the letter, portions of which are excerpted in his article here. He observes that Rolex is well-capitalized enough to freeze production for a year, pay all staff salaries, and not blink an eye—so it’s not counting on the refund from the fair to make an appreciable difference in its own bottom line. But du Plessix is aware that for many other exhibitor companies it is possibly life or death, and in that regard, his advocacy for not only watch brands but also jewelry and watch companies, is extremely powerful.
The Baselworld fair also has asked the Basel Hotel Association—equally unpopular among visitors—to adjust its strict refund policies to the unprecedented situation. Visitors to the fair have long complained about both exorbitant hotel fees and unreasonable booking policies, such as requiring visitors to book for the duration of the fair regardless of whether they need the room for the entire time.
But if Les Trois Rois (aka The Three Kings, Basel’s leading luxury hotel) is any indication, that request fell on equally tone-deaf ears. A separate article in WatchPro says the hotel will not refund any reservations made for the 2020 fair:
The rational reaction to the postponement of Baselworld and uncertainty over the entire exhibition industry is for guests booked into Les Trois Rois this year to cancel their hotel bookings. This is precisely what most watch executives have been trying to do.
But Les Trois Rois took until March 18, almost three weeks after the Baselworld announcement, to reach a decision on how to handle cancellations, and the news was not good for guests.
Free cancellations are not possible, the hotel has told guests with many thousands of pounds tied up in reservations. “Should [guests] wish to cancel the booking we will charge 100% of the costs,” an e-mail sent to one prestigious jeweller, and seen by WatchPro, says.
The even more egregious insult to its loyal and long-standing guests is delivered should people be generous enough to choose to move their reservations from this year’s cancelled Baselworld to the 2021 event in January.
Rather than simply changing the bookings, Les Trois Rois is charging a “10% no show fee”.
The luxurious Three Kings Hotel in Basel, typically filled with guests from Rolex and Patek Philippe during the fair, is not refunding any reservation fees from 2020.
In comments following the story, one reader pointed out that Hotel du Commerce, another popular fair venue, is no better:
In defense of the hotel sector, another reader commented that in small cities like Basel hotels don’t get enough guests year-round to make up for the loss of revenue generated by large exhibitions. But for the show’s increasingly precarious position in the industry, he pointed the finger of blame directly on the fair itself.
Baselworld isn't the first industry behemoth to push its weight too far in recent weeks. An angry diamond industry dealt swift retribution to Martin Rapaport’s price list, with hundreds of diamantaires defecting and joining efforts to quickly create a new, more transparent global trading platform under the auspices of the World Federation of Diamond Bourses.