Wednesday, April 8, 2020

The Only Certainty is Uncertainty

Okay, it's been a crazy few weeks. And a lot has happened, and even after everything that has happened, there is still a veil of uncertainty.

Fact 1 -
Patek, Rolex and Tudor have decided to postpone the release of their new collections for now. Maybe until the proposed new BaselWorld schedule of January 2021, maybe sooner. Considering the slowdown in sales globally, well, fair enough, it makes sense.

Fact 2 -
Despite the global slowdown, a few brands decided to re-open (and even stay open) even when the majority of Switzerland is still on lockdown. Considering the slowdown in sales globally? Well, this makes absolutely no sense at all. Let us hope that this proves not to have been poor judgement. Health and safety are far more important than widgets.

Fact 3 -
There is now a potentially not-so-small scale dispute between the what is officially known as the Swiss Exhibitor's Committee and MCH - the parent company responsible for BaselWorld. The Swiss Exhibitors are, in essence, the brands who participate each year in the BaselWorld fair. And the spokesperson for this group is Hubert J. du Plessix. And before you figure that this is just some hack operator from a regional chamber of commerce, think again. Yes, Mr. du Plessix is the president of the Swiss Exhibitor's Committee. But he is more than just a spokesman for this group, he is also a not-so-insignificant member of Rolex's executive backroom.

Now, before I go forward, it is important for everyone reading this to know that I was one of two people unofficially working with the fair organizers to put help put together a small additional section to accommodate small independent brands. I was personally invested (albeit not financially) in seeing the fair move forward and be a success. But this year it was not meant to be. I am as disappointed as anyone else.

So what is at the heart of this dispute? MCH has decided that every participant that signed an agreement would be financially accountable for at least some portion of the fees for the fair this year.

This is the official statement from MCH:

In this challenging environment, Baselworld is very conscious of the stakes for all exhibitors and is absorbing a significant portion of costs due to postponing the show by offering to carry forward 85% of the fees for Baselworld 2020 to Baselworld 2021 (the remaining 15% will serve to partially offset out-of-pocket costs already accrued). If needed, exhibitors can alternatively request a cash refund which will be of up to 30% of the fees, with 40% carried forward to Baselworld 2021.

So, essentially, as it is laid out every brand will actually be out at least 15%. And for the brands that cannot afford to leave their monies in "escrow" for 9 months, they can get up to 30% back with 40% moving to 2021 and (I can only assume) 30% staying as a permanent "fee" with MCH.

In Mr. du Plessix's communication (which I and several other journalists have received forwarded copies), he stresses the importance of understanding that while it is indeed a unique situation, the long-term (or even immediate) future of the fair was at stake. He also pointed out that state agencies (Basel and Zurich among others) represented nearly half of the actual owners/ investors of the fair, and that the Swiss government was working to address just these types of issues. And the desire to hang onto fees at the rates proposed are all the more concerning when weighed against the potential for the fair organization's losses to be mitigated by the Swiss government, or any insurance policy that might also serve to help make MCH whole. Lastly, the fairly public statement of Dr. Ulrich Vischer, Chairman of the Board of Directors of the MCH Group, on March 26 that the MCH Group had "abundant liquidity".

So I find myself in a rather peculiar place on this one.

On the one hand, I am a writer with a desire to report the facts. But in addition, I am also partners with one or two watch brand owners that will now be adversely impacted by this (which means that I will be as well). And finally? I would really like to see BaselWorld happen next year and for the Watch Lounge live up the The HYPE, as I put a lot of (unpaid) time into it. In truth I would really love to see BaselWorld recover from this year and grow into a solid, sustainable annual event that benefits the industry as a whole. But if I divorce myself from all three (admittedly small) roles that I have in this Kabuki Theatre of the Damned, I have to be honest and say that sooner or later, this type of impasse was inevitable. It just so happens that COVID-19 was the catalyst, but this conflict has really been on the cards for some time, slowly bubbling on a low heat setting. Once the heat turned up? Well, the lid started rattling and now has popped off.

Arrogance -

This is a word that has been bandied about quite a bit. Journalists and brands complain about the arrogance of the BaselWorld fair organizers. But in truth? They are no more arrogant than the organizers of "The Fair Formerly Known As The SIHH".

Arrogance, if we are honest with each other, and ourselves, is pretty much endemic of the entire watch world. Watch Town is packed to the brim with ego, and those of us who live and work here are all guilty of letting it guide our decisions.

As I have mentioned several times before, in addition to being a teacher, writer and educational social worker, I am also a trained mediator. Dispute resolution is always preferable. BaselWorld needs Rolex (among other participants) to continue to participate in order to keep going. And at this point? A dispute between the fair and the exhibitors ensures that there is not going to be any winning, only degrees of losing. And if this is clear to everyone, maybe it is time to stop making statements, and start talking together, like actual partners.

Mediation is the answer.

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