Swiss watchmaking, collateral damage from the Coronavirus

Even during the SARS epidemic, if some visitors had very logically canceled their visit to Switzerland, the great Swiss watchmaking masses, Watches & Wonders (ex SIHH) and Baselworld, had not been canceled. This year, it will not be the same: the Fondation de la Haute Horlogerie has just announced the cancellation of the Geneva watchmaking fair which, precisely, began its moult this year with a new date, a new concept and a new facet off in the heart of the city. “Given the latest developments concerning the global spread of COVID-19, it is the responsibility of the Fondation de la Haute Horlogerie (FHH), organizer of Watches & Wonders Geneva, to anticipate the risks of travel and significant international groupings could generate in the weeks to come ”, it is explained. It is the most responsible decision in the current context of health risks. ” Contacted, the FHH did not wish to say more about this cancellation.

The end of a generation of watch fairs

Such a decision, taken at the end of February, can still surprise or even seem hasty, especially on the eve of the opening of the Geneva Motor Show which, for its part, has not yet been canceled, despite the current spread of the epidemic across Europe. The opposite would have seemed more logical ... But beyond the health issue, it is also the economic question that undoubtedly arose: the Swiss watch market depends very heavily on Chinese customers, whether in situ or in Paris. However, the Coronavirus has literally put China at a standstill, and with it the financial windfall represented by Chinese customers and tourists.

In such a context, without visitors or customers from the Middle Kingdom, canceling seemed logical. And this even if the cost of this cancellation will not be negligible, both for the FHH, of which this fair represents a good part of the resources, as for the exhibiting brands, which for many had already largely invested, notably in their stands. Thirty flagship brands, mainly from the Richemont group, and the dozens of freelancers from the Carré des Horlogers should therefore suffer. Are we witnessing the end of watch shows, which have been losing momentum for years, and which more and more brands and groups (LVMH, Swatch Group, Movado, Breitling… prefer dedicated events? "C "is an earthquake. We went from a crisis to a revolution," said Gregory Pons, creator of the Business Watches news site. This is the end of this generation of watch fairs. I think that fairs watchmakers are necessary, but they have to be reinvented. ”

The context of the Swiss Made industry was already tense, between exports at the lowest in 2019 and an Apple Watch whose volume sales for the first time last year exceeded all sales of Swiss watchmaking . This cancellation of Watches & Wonders represents a loss of 50,000 to 200,000 euros for small exhibiting brands. There should be a lot of collateral damage in the coming months, especially among the self-employed, twenty to thirty this year, in my opinion. ”

Recreating purchasing capacity for customers

Beyond that, "we will have to radically get out of the sinodependence of the Swiss made industry," says Grégory Pons. It is time for brands to once again offer watches dedicated to European customers at a decent price. ” Some houses have already started this shift, offering entry-level models at around 3000 euros, again allowing a lambda executive to afford it in a few months of savings. The second-hand market is also booming, there too to recreate purchasing power for watch lovers, between resale and assets to afford a new model. A segment in which the Richemont group has already positioned itself with the acquisition of Watchfinder, soon to be established in Paris. Bucherer is also soon entering this “pre-owned” market, while the MMC site (Montres Modernes & Collection) sees its online sales take off a little more every day.

The Roaring New Years

"We are heading into the roaring new years, and the way of consuming will not be the same after this coronavirus," Grégory Pons projects. It will take time to no longer depend on the Chinese clientele and recreate a local clientele ... We have to redo everything, the salons, watch catalogs, and stop dreaming of waiting for the Chinese clientele to return. After this crisis, I think that she will no longer consume in the same way as before. This story is going to have a terrible influence on his morale. ”

Will Watches & Wonders Geneva really take place next year? Impossible to be sure yet. Next announcement expected: the possible cancellation of the other major Swiss watchmaking mass, the Basel fair (Baselworld), organized this year from April 30 to May 5 ... in the wake of Watches & Wonders, precisely to allow Asian visitors to attend the two Swiss watch fairs in a single trip. "The Basel show is in the same situation as that of Geneva," says the creator of Business Watches. It is suspended from the position taken by the authorities of the Swiss Confederation. ” Bulgari and Citizen had already announced recently that they would no longer participate in the 2020 edition of Baselworld. As in Geneva, the central question is undoubtedly more economical than sanitary: who should take the initiative to cancel, between authorities and organizers? A question that is both political and contractual…