Does the resignation of a top executive at a trade fair have broader implications for the realm of art fairs?
As with in other industries, the increased emphasis that luxury-goods companies are placing on online distribution channels and social media for promoting their wares has made the physical trade fair less of an integral factor in the way business is done.
René Kamm, the longtime CEO of Art Basel parent company MCH Group, resigned last week after reported troubles at Baselworld, the premier trade fair for watches. Kamm’s resignation came immediately on the heels of news that the fair’s largest exhibitor, the Swiss watch company Swatch, had suddenly pulled out of the event’s 2019 edition. In a statement, the exhibition company described Swatch’s departure as “a decision MCH Group deeply regrets.”
According to a report in the Financial Times, shares in MCH Group, which is 49 percent owned by public-sector institutions, fell 11 percent last week after Swatch announced its withdrawal, but rose after news of Kamm’s departure.
The FT says that Baselworld, which was introduced in 1917 and is just over 100 years old, saw the number of exhibitors in its latest edition decrease by half—to 650, down from 1,300 in 2017—although visitor levels held steady at roughly 106,000.
In 2013, MCH invested roughly $430 million in new exhibition space in Basel but had to write down that value in 2017 due to the downsizing of the fair. Jecker says this did not influence cash and cash equivalents, and that since the balance sheet has been strengthened in the past few years, the company is in a position to absorb the adjustments. The company intends to further evaluate the investment going forward based on “future utilisation of the exhibition premises’ capacity and the success of the events it hosts.”
Asked whether the management turnover at the top of MCH might impact the Art Basel fair and its subsidiaries in Hong Kong and Miami Beach, MCH representative Christian Jecker told artnet News via email:
The situation of Baselworld (and the decision of Swatch Group) and the resignation of René Kamm do not have any impact regarding Art Basel. Art Basel is a very healthy division within MCH Group and is financially in a very sound position. This is due to the great support of the galleries and corporate partners, and due to the expansion of Art Basel into Asia in 2011. Just as importantly, the quality of the Art Basel shows has never been stronger. Art Basel’s Global Director Marc Spiegler is in close contact with Dr. Ulrich Vischer, Chairman of the Board of Directors, MCH Group, who has expressed his and MCH Group’s full support for Art Basel’s current leadership and directions, based on the great success of the shows and recent results. MCH Group and Art Basel are confident that current developments within MCH Group will not impact the quality of the Art Basel shows.
Swatch CEO Nick Hayek had been vocal about trade fairs’ declining importance in his industry and also critical of Baselworld itself, saying its organizers acted “arrogantly,” according to the FT. Swatch said it spent $50 million on Baselworld annually, flying in employees from all over the world, including from its brands Omega and Tissot.
Kamm had been at MCH for almost two decades. According to MCH’s statement, Kamm began his career in 1999 as director of Baselworld and turned it into “the most important international trade fair in the watch and jewelry segment.” He had found success in focusing on collector exhibitions, and through adding marketing solutions and event services.
Chairman Ulrich Vischer will take over the role of CEO until a successor is appointed.
Today everything has become more transparent, fast-moving, and instantaneous. Accordingly, a different rhythm and a different approach is needed. With its 18 watch brands, Swatch Group has operated for a long time very successfully along these criteria in production, distribution as well as in marketing.
In response to artnet News questions, Swatch Group wrote in an email that “annual watch fairs, as they exist today, no longer make much sense.” While insisting that watch trade fairs should not disappear entirely, the statement said the need to “reinvent themselves” by “responding appropriately to the current situation and demonstrating more dynamism and creativity.”
Swatch also took direct aim at MCH saying: “The MCH Group, which organizes Baselworld, is clearly more concerned with optimizing and amortizing its new building—which, incidentally, is largely financed by the watch industry during the fairs—than it is in having the courage to make real progress and to bring about true and profound changes. For all these reasons, Swatch Group has decided that from 2019 onwards, it will no longer be present at Baselworld.”
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