The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
DUBAI, United Arab Emirates — As a line in the sand moment, LVMH Watch Week, held in Dubai this week, and hosted by Bulgari along with the LVMH Watch Division's three brands — Tag Heuer, Hublot and Zenith — couldn't have been clearer. The major Swiss watch fairs are running out of time. On Instagram yesterday, Bulgari Chief Executive Jean-Christophe Babin declared the event was "making obsolete the 20th century Swiss Watch fairs which lost connection with commercial requirements and industry promotion."
He was referring to Baselworld and the Richemont Group vehicle Watches & Wonders (formerly known as the Salon International de la Haute Horlogerie, or SIHH). Both, but particularly Baselworld, have been heavily criticised in recent years for being overpriced and failing to serve their exhibitors or their visitors in the digital age.
While the four LVMH brands still plan to exhibit at Baselworld this year alongside Rolex and Patek Philippe, many others have pulled out. Baselworld, which also covers jewellery, has lost around 1,500 exhibitors, or around 75 percent of the total, in a little over a decade, including Swatch Group (which owns Omega, Longines and Breguet among others), Breitling and Seiko. Audemars Piguet and Richard Mille, two of the most powerful names in luxury watches, withdrew from Watches & Wonders last year.
Outrageously Expensive and Crazy Timing
This year, the two fairs have collaborated on dates in an attempt to attract more visitors, but that has meant moving the shows to the end of April. SIHH was previously in January; Baselworld in March. "The fairs are outrageously expensive, and the timing of this year’s fairs is crazy for our clients, retailers and press," said Babin at a press conference to launch the three-day event on Monday.
The major Swiss watch fairs are running out of time.
Losing the LVMH brands would be a big blow for Baselworld’s beleaguered new management, which has been tasked with reviving an event founded over 100 years ago. Stéphane Bianchi, head of the LVMH Watch Division and Tag Heuer’s chief executive, said he would decide after Baselworld whether his brands would exhibit again in 2021. "No decision has been taken to pull out," he said. "Everything is open."
Babin said the event, which was attended by 145 retailers and 200 members of the press from around the world, all as invited guests of LVMH, was "much cheaper" than taking four brands to Basel, although declined to say what the group had spent. Costs were split between the four brands.
"I believe in proximity and relationship," said Babin at the launch. "Being together is something you cannot enjoy at a watch fair where you have so many brands."
Getting Ahead of the Pack
Bulgari, Hublot and Zenith all used the event to launch new product, as much as 50 percent of their 2020 collections. Tag Heuer launched a single limited-edition piece timed with the company’s 160th anniversary. Consensus among the brands was that a January showcase gave them an opportunity to stimulate sales and interest early in the year.
Many visitors questioned Tag Heuer’s decision not to use the platform LVMH Watch Week created to launch a new collection. Spokespeople for Bianchi said this was because the company has a far bigger distribution footprint than Bulgari, Hublot and Zenith, and would not have been able to entertain its entire retailer network in Dubai.
A January showcase gave [brands] an opportunity to stimulate sales and interest early in the year.
Bianchi said he would be launching a new version of Tag Heuer’s Connected smartwatch in March but holding the rest of the company’s new collection back until Baselworld. He added that the collection, which will be led by Tag Heuer's best-selling Carrera model, would be immediately available on launch, borrowing the see-now/buy-now concept trialed by fashion brands in recent years. Typically, new watch collections can take months to come to market.
The move suggests Tag Heuer may yet commit to a major watch fair, assuming visitor numbers are high enough, even if Bulgari and other LVMH watch brands choose not to. Babin confirmed in an interview that while the four brands had joined forces for LVMH Watch Week, the group "will never constrain any brand to act collectively."
In the same interview, Babin continued his criticism of the Swiss watch fairs and their exhibitors, saying they "want to sink with the ship." Watches & Wonders, which is far smaller than Baselworld with only 31 exhibiting brands, is organised by the Fondation de la Haute Horlogerie and hugely reliant on Richemont brands such as Cartier, IWC and Panerai for its survival.
Many have suggested Baselworld, which says it will have around 600 exhibitors this year (up from 520 in 2019), will stay afloat as long as Rolex and Patek Philippe continue to exhibit. The two most powerful names in global watch retail continue to operate traditional distribution models, working predominantly with third party retailers, and still need a trade fair.
Baselworld’s Managing Director Michel Loris-Melikoff said at Dubai Watch Week in November that the fair will keep its B2B focus, while evolving a B2C concept alongside it. Thierry Stern, president of Patek Philippe, has said he has no plans to move away from Basel. Rolex has made no comment. Mr Loris-Melikoff has previously been quoted saying Baselworld lost money for the first time in 2019.
It’s a Woman’s World
Many of the new pieces unveiled during LVMH Watch Week were women's watches. Bulgari led with two high-end mechanical pieces. It said the Serpenti Seduttori Tourbillon was the smallest women’s tourbillon wristwatch on the market, and that the Divas’ Dream Minute Repeater Malachite was the thinnest women’s minute repeater (a watch that chimes the time on demand) ever made.
Zenith introduced 20 new references from 50 scheduled for the year, spearheaded by a first women’s version of its Defy collection called the Defy Midnight. Julien Tornare, the brand’s chief executive, said Zenith currently sold around 15 percent of its watches to women and that the Defy, a line inspired by a design from the company’s 1970s archive, was the company’s "growth engine."
Many of the new pieces unveiled during LVMH Watch Week were women's watches.
The new watches, all of which are set with diamonds, come on stainless steel bracelets and are sold with three additional straps. These are rubber based with either leather or satin inserts and can be switched using Zenith’s new strap-changing system. "I wanted a contemporary watch for women," said Tornare. "Women are much better at multi-tasking and we wanted a product they can use at different moments of the day, of the week."
Ricardo Guadalupe, Hublot's chief executive, said in an interview that sales of women’s models accounted for 22 percent of his company’s turnover, but that he would like to grow that to 40 percent. Hublot introduced two new women’s watches in Dubai, but its collection focused around the Big Bang Integral, an update to the company’s flagship men’s watch with a specially designed integrated bracelet.
Guadalupe said that 95 percent of his sales had been on rubber straps and that he hoped to add new customers with the Big Bang’s first collection of bracelet watches. "If we do 5 percent of our sales in bracelets [this year] it will be a success," he said. The new pieces are available in titanium, ceramic and Hublot’s high-performance King Gold. He also said this week’s releases would all be available before Baselworld.
The Future of Watch Fairs?
So, what happens next? Watches & Wonders opens on April 25; Baselworld follows on April 30. Before then, Swatch Group and Seiko will both hold events for international press and retailers. Breitling, which left Baselworld after this year’s dates were announced saying they were too late, has yet to announce its 2020 plans.
So far, Baselworld appears not to have convinced the LVMH brands it has done enough to encourage them to sign on beyond 2020. "The world has changed," said Guadalupe. "[Baselworld] said they’re going to do an evolution, but this year will be a repetition of last year. Stands don’t have to be cathedrals — we want to be more open, to give visitors an experience. The show has to be B2C as well as B2B, more than just watches in windows."
LVMH in years to come will present an alternative to the traditional fairs.
Guadalupe also said, however, that the Swiss watch industry "needs one big event." But he pointed out that "our growth in the future will be mainly because of China. Not just in China, but selling to Chinese [consumers] around the world."
In the past, Loris-Melikoff of Baselworld has suggested he could either move his show to Hong Kong or create a satellite event there. Baselworld’s parent company MCH Group has an existing network in the territory, following the success of Art Basel, which this year will be held in March. Recent civil unrest makes that unlikely to happen in the near future, however.
Babin said he had three choices; Watches & Wonders, Baselworld or an LVMH event. He said he would like to see LVMH Watch Week grow and involve other brands from the LVMH portfolio.
LVMH brands Dior and Chaumet also make luxury watches, while the group’s recent $16.2 billion acquisition of Tiffany may yet see it look to revive the company’s flagging watch offering. "We are the only watch and jewellery group with a hospitality division," Babin noted. "LVMH in years to come will present an alternative to the traditional fairs."
As an aside, when asked whether he would be moving to Tiffany, Babin said he was "leading Bulgari and very happy here" and that he would "never trade my position back to mono-activity," referring to the five sectors Bulgari currently operates in. "At 60, it would feel like downgrading," he added.
According to its organisers, LVMH Watch Week is the future. In that same Instagram post, Babin concluded: "LVMH and Bulgari, Hublot, Zenith and Tag Heuer have clearly taken the lead and developed the vision for the category relevance in the 21st century."
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholder’s documentation guaranteeing BoF’s complete editorial independence.