Even before the full force of the coronavirus pandemic hit the art world, Art Basel’s parent company, MCH Group, was grappling with instability and shareholder unrest. Financial strain and difficulties allocating its resources between its trade fairs and its live marketing division had been plaguing the Swiss company—and now the global health crisis has sent shockwaves throughout its numerous enterprises.

Five high-profile brands including Rolex, Patek Philippe, Chanel, Chopard, and Tudor have deserted Baselworld, MCH Group’s premier watch fair. The luxury watchmakers jointly announced plans to exit Baselworld in 2021. The news came after Rolex released open letters complaining about the fair’s 2020 rescheduling plans and its handling of refunds.

The brands have now joined forces with the Fondation de la Haute Horlogerie in Geneva and yesterday announced plans to create a new watch show in early April 2021 at the convention center Palexpo, coinciding with Watches & Wonders. “This departure follows a number of unilateral decisions made without consultation by Baselworld management, including the postponement of the watch show until January 2021, as well as its inability to meet the brands’ needs and expectations,” according to the watch brands’ joint statement.

A view of Baselworld in Basel, Switzerland. Photo by Clemens Bilan/Getty Images.

The split appears to be increasingly acrimonious. “It is with great surprise and equally great regret that the MCH Group takes note of the cancellation of major exhibitors at Baselworld,” reads a statement from MCH Group. “The new date for the unavoidable postponement of Baselworld 2020 was defined jointly with leading exhibitors. The objective was to find the earliest and best possible date for the industry following the Covid-19 related measures. The companies now ‘migrating’—including Rolex—spoke out in favor of a postponement to January 2021.”

MCH had already been forced to cancel the fast-growing Hong Kong edition of Art Basel last month and has now pushed back the Swiss edition of the art fair from June to September.

News also emerged recently that MCH laid off 150 employees in its live marketing entity, known as MC2. “We had to lay off 150 employees at MC2 Group [in its “live marketing solutions” division] in the USA, because in the USA—unlike in Europe—there are no measures such as short-time work to avoid redundancies,” a representative told Artnet News.

The cut to the live marketing division represents 42 percent of its 350-person workforce. In total, about 800 employees worked for MCH Group before the layoffs.

KAWS, COMPANION (EXPANDED) in Hong Kong, 2020, augmented reality. Courtesy: KAWS and Acute Art.

The cut represents a stark reversal in MCH’s business trajectory. Less than three years ago, when MCH acquired MC2, the move was described as “by far the biggest acquisition in the 100-year history of MCH Group” and “a tremendous step forward in the implementation of our corporate strategy.”

At the time, MCH said MC2 had 15 locations in the US and one in Dusseldorf, Germany, and an annual turnover of roughly CHF160 million ($160.6 million).

Many observers have debated the value of MCH’s live marketing business versus its art fairs. MCH shareholder Erhard Lee argued unsuccessfully last fall that the company should focus more on the former and decrease its focus on the fairs. (Lee did not immediately respond to a request for comment.)

The MCH representative insisted that the changes at Baselworld and MC2 “do not have any impact regarding Art Basel.”