BaselWorld opened its doors at the same time that American troops were worrying about meeting strong resistance as they continued their advance on Baghdad. The Fair ended ten days later, on the same day that the world watched the statues of Saddam being pulled down in Iraq's capital city. They were a tense ten days, dominated by worry but ending with a tinge of relief. One had the impression that we had avoided the worst. But, even more than concerns about the war, it was SARS that cast a long shadow over the large Basel show.

Chinese indignation
On the first day, during the customary opening press conference, representatives of the Hong Kong contingent made little attempt to hide their indignation and incredulity. Their sentiments certainly must have been very strong because the Chinese usually do not like to publicly show their anger. But on this day, it was indeed anger that was expressed. Frederick Lam, Deputy Executive Director of the Hong Kong Trade Development Council

(HKTDC) did not mince his words when he criticized, in no uncertain terms, the “very Swiss” measures taken by the government to ban exhibitors from four countries from participating in BaselWorld.

It is true that understanding the logic behind the Swiss Government's decision is definitely not easy. Lam explained that he was able to freely enter Switzerland Sunday evening, without the slightest control or even a question, as did some 2,500 other people from Hong Kong. Yet, on Monday morning came the announcement. Exhibitors coming from Hong Kong would not be allowed to man their stands. How could one not feel that this decree was discriminatory, since it also allowed people coming from Hong Kong as buyers rather than as sellers to roam around freely, as they pleased, with no restrictions! Where was the logic in this double standard as the Swiss tried to protect themselves from one and only one disease, yet inflicted two different rules for two different groups of people?

The end of Zurich?
This half-measure, quite Swiss in nature (which means: not totally for, nor totally against), actually produced two victims. First was the Hong Kong contingent (along with exhibitors from Vietnam, China and Singapore) which is now getting ready to sue the Swiss Government for 2 billion Swiss francs in damages. The second was the BaselWorld Fair itself, which not only had to enforce the absurd decision taken by the bureaucrats, but which also had just inaugurated its new 'One fair, Two locations' formula that split the Fair between Basel and Zurich. Even well before the Swiss directive banning the Chinese exhibitors, the division of the Fair into two locations was a difficult and financially risky strategy for the organizers.

Moving the national pavilions to Zurich, of which Hong Kong made up the vast majority with its 383 exhibitors, had already been a hotly debated topic. It was only after long and hard negotiations that this move was finally accepted. The management of BaselWorld invested much in terms of time and money in this operation, only to see it end in total failure. Hardly any buyers came to Zurich, thus severely hurting those national pavilions that remained. As of today, no one can say if Zurich will even be used next year. (Concerning these events and reactions from Hong Kong and the people concerned, see our special article on SARS/Hong Kong.)

Quality rather than quantity of visitors

So, it was in this heavy atmosphere, that the watch 'festivities' got underway at the Basel Fair this year. A wait-and-see attitude, in light of the general economic climate, was de rigueur. What would happen? Would the Americans show up? What about buyers from the Middle East?

Ten days later, when BaselWorld closed its doors and the SIHH in Geneva was in full swing, feelings of relief were clearly visible. Basel officially registered a decrease of 22% in the number of visitors in relation to last year. Unofficially, however, the decrease seemed to be more than 30% judging from the reduced traffic in the corridors. On the other hand, the professional 'quality' of these visitors apparently partially made up for the lack in quantity. The majority of watch brands that we contacted expressed their relative satisfaction with the Fair. Although 2003 will certainly not go down in the annals as a 'good' year, business was better than expected given the economic, political and health safety uncertainties. “Those who came were the most serious buyers. Business was conducted in a calm setting and the number of nuisance visits was dramatically lower. The quality helped compensate for the quantity,” explained a large Swiss manufacturer.

Forced to take other measures
Still, we should look at this opinion a little more closely. The various exhibitors had very different experiences depending on their position in the marketplace. Globally known and strongly established brands fared the best, or in other words, the largest brands suffered the least. With their distribution more or less controlled, even verticalized, their order books more or less filled, these companies went to Basel or Geneva primarily to publicly exhibit their new products. Still, some enterprises admit that they must now compensate for the absence of Asian and American buyers by organizing additional commercial activities.

Unstable positions
The situation of the less well-established and emerging brands was clearly different. Some were able to benefit from the circumstances by concentrating on a restricted number of markets where they are making headway. Others took a more wait-and-see approach.

Hurt most were brands that came to the shows in an already weakened position. Hoping to strengthen their business, they were instead forced to cut back on their plans. As always, rumours of impending sales circulated throughout the halls and, quite likely in the coming months, we will see some transfers or major revisions in strategy.

The move upmarket by many players over the last few seasons is the main reason that some brands are in such a delicate situation. The large wave of luxury has passed and the current economic tides are leaving a lot of debris on the shore. A number of brands are now finding themselves in very unstable positions. Too expensive at the wrong time, not having acquired sufficient image to confront the financial storms, not able to change strategies, these brands are now stuck with too much inventory. As has been true since the dawn of time, when the situation gets tough, everyone must fall back on what seems to be the surest bet.

The dance of death
There was one man at Basel who well understands the ways of the world and was up to the challenge of this worrisome climate, Severin Wunderman. The owner of Corum was having a wonderful time at Basel. It was impossible to miss his stand, adorned with crimson velvet, near the entrance of Hall 1. In the displays, Wunderman showcased a number of remarkable precious objects linked to the theme of death: skulls of all kinds, bones, finely chiselled skeletons, canes with a skull and crossbones knob… all kinds of high priced paraphernalia, a collection of skeletons in a dance of death.

Not only did Severin Wunderman return to the secular traditions of the city of Basel, where, in 1538, Hans Holbein published his famous set of engravings entitled the 'Simulacres de la Mort' (Images of Death), but he was right on the mark, reminding us all about the consequences of war and the threat of this new disease hanging over the great luxury festival.

With the display of death, Severin Wunderman might have been accused of cynicism or of opportunism. Not so, however, since this exhibition was planned well in advance of recent events. Also, he himself had a brush with death a few years ago and perhaps used this collection to recall the incident with brilliance, humour and sarcasm. Standing in front of his stand, a diamond-set skull and crossbones on the lapel of his black suit, he unveiled his latest collections, which are freer, whimsical, with ever more colour. Under the sign of the bones, Wunderman addressed a hymn to fantasy and life. His brand has also carved out a place for itself in a largely cold and conservative industry, an industry that has lost its bearing, as well as its profits from the ostentation of years past, and is now navigating without instruments.

The dance of the trends
There are no longer any trends. Or to be more precise, all the trends are co-existing without any particular one appearing to be dominant. Do you want a large watch? No problem. You have a large choice since nearly everyone is offering one. Do you prefer a tiny timepiece? Again, not the tiniest problem, since you will find them everywhere. What about an Italian Baroque design (ah, the Italians are very big this year in colour, exuberance and irony) or the coldest minimalist piece? Or absolute classicism, mechanical mastery, or ostentatious luxury clothed in complications? Avant-garde timekeeper or a cascade of precious stones? You can find them all right now, while waiting for the next great and unknown trend to arrive.

Having said that, there are a few phenom-enon that should be mentioned. In particular, no one could help but notice the avalanche of tourbillons this year. It seemed to be a remake of the famous years of Nouvelle Lémania (before its take-over by the Swatch Group) when the movement manufacturer was accused of wanting to destroy the tourbillon by putting it in everything. Fortunately, this new wave of tourbillons is more creative that the preceding one (which was very classic, as we remember, with the exception of the pioneering Alain Silberstein). This year we were able to admire the bold styling of the tourbillons by Hysek and Richard Mille, the lovely Piaget, the revolutionary version by Franck Muller, the rigorous architecture of Jaeger-LeCoultre, the mysterious tourbillon of Genta, the audacious model from Ikepod, the large form by JeanRichard, the 'Dubuisistic' tourbillon of Dubuis, the sober Chopard, the rich surprise from Preziuso, the austere Patek… and so many more . (Europa Star will have a special section on tourbillons in its next issue.)

This exuberance, this apparent vitality, is also a sign that the industry has lost its bearings. Beyond a few brand icons (no need to list them, you know them as well as I do), that appear untouchable, the hierarchies have been scrambled or at least their future is less certain.

Another observation is the amazing revival of the digital display. With its very successful 'Chocolat', Chanel has brought digital (and quartz) into the realm of the haut de gamme (see Europa Star 2.03). But the French brand is not the only one to give letters of nobility to this type of display. We also admired the ingenious 'V-tech Alpha' by Ventura (see Europa Star 2.03) that permits a multitude of functions using a small scrolling crown. Then there was the very pure digital ring watch by Starck+. To top it off, Harry Winston presented the most surprising watch of the spring shows, its Opus III. Due to the profuse talent of Vianney Halter, this timepiece is equipped with a very unusual digital display that is 'motorized' by an entirely mechanical movement that in itself is a veritable technological feat. We will discuss it in detail in our next issue.

Emerging groups
The third observation, already announced last year but taking effect this year, is the notable increase in strength of the watch groups active in mass production. In particular, we think of the Festina group, which is strongly re-launching Candino, and the Fossil group.

The road travelled by Fossil over the last few years is indeed remarkable. From a low-priced brand based on the nostalgia of the American 1950s and 1960s, targeting the discount store market, Fossil has developed into a major player in the realm of licensing. In this regard, we must note the accomplishments with two completely re-branded names, Zodiac and Burberry. In both cases, a 'reverse' strategy was used. Fossil took the old and traditional Swiss company Zodiac into the Swiss Made 'fashion' sector. With Burberry, Fossil transformed an originally 'fashion' brand into a real 'watch' brand, emphasizing the classicism and integrity of the company. Christopher Bailey, the very young 'Creation Director' at Burberry designed a very nice classic collection that draws on the brand's roots and transposes its symbols with class, elegance and a great sense of detail. “We remain totally realistic as to our place in watchmaking,” explains Bailey, “but we instil integrity into the product. It must work. It must be emotional and it must be technological.” Without a doubt, we will be seeing more and more of Fossil and its strategy of 'encircling' Swiss watchmaking.

Re-launches
Once more we have seen, and it is heartening, that watchmaking continues to exercise a strong power of attraction. Many new brands were launched or re-launched this year. Among them is the example of Milus. This is a brand that made a name for itself in the domain of 'hard and fast' design but whose director, Paul Junod, was wrong to be right too early. Literally plundered by the fashion brands, which were directly inspired by it, Milus found it hard to get access to markets and distribution. The only solution was to find investors, and in this case it called upon the Hong Kong Peace Mark group. Intelligently, the group conferred the control of the brand to a young Swiss team headed by Jan Edöcs, who affirms they will have the “time necessary” to re-launch Milus in the luxury sector with a softened, more sensual design created by Paul Junod. The enterprise is very courageous and we salute and encourage such initiatives. However, as is the case with many other brands trying to position themselves in the high quality sector, we fear that the current global economic situation, combined with the large number of companies targeting this price range (an average of CHF 4,500), will force investors to be patient while waiting for the desired results. Finding a place in the sun of distribution is already expensive and becoming even more so.

The keys to distribution
A man such as Christian Bédat, heading up a brand with his name and that of his mother Simone, a well-known figure in the watch industry, certainly knows what it is like to encounter problems of distribution. Even though the brand is now part of the Gucci group, even though it has developed a remarkable collection of up-market timepieces, finely designed and created with the greatest care and attention to detail, Christian Bédat has had major difficulties in gaining access to distribution, especially in Europe and most particularly in its home country of Switzerland. The brand is a huge success in the United States and in Japan but it had to wait five years to open its first sales point in the German-speaking part of Switzerland!

More than ever, distribution is the central element of success. To get the key, or one of the many keys, is essential, but it is increasingly problematical. Whatever the large groups might say, the pressures, lock-outs and forced joint offers are alive and well. But, while they do exist, there are many cracks in the system, providing new opportunities. The mix of current design, where every stylistic option and price range are possible, opens a profusion of niche possibilities. While there are many such openings, they demand a heightened professionalism, patience and the ability to plan and manage consistent operations. Of the many examples, one is Dubey & Schaldenbrand, a company proposing original collections of mechanical watches inspired by the 1920s. The diligence and patience is paying off for this successful enterprise.

Persistence of the broad-based brands
In a completely different manner, we observe the perseverance of certain 'business models' inherited from the past. A brand such as Cyma, for example, is one of the few to have conserved its broad-based offer, with thousands of models (while all other brands have strictly limited their own). In its niche, Cyma produces tens of thousands of watches, sold primarily in the secondary American cities like, for exemple, St. Louis, Denver, Boston, Phoenix, Baton Rouge or Cheyenne where it is the second largest selling Swiss brand, right behind Rolex!

We also should mention another niche brand, Victorinox. In 2002,it accounted for 23% of Swiss watches exported to the USA. With a production of 800,000 pieces going to this market out of a total of one million (Victorinox has now set its sights on Russia and China), the 'niche' is hardly a real niche any more. (See article in this issue.)

And the large groups?
With few exceptions, the dominant groups kept a low profile at the 2003 spring fairs. Even Nicolas Hayek was very reserved at Basel this year. The large stage/platform of the Swatch Group, previously a veritable fair within a fair, did not present the unbridled activities of earlier years. Nick Hayek Jr. made only a brief appearance for a 'Dadaïst' event with Swatch.

This year will certainly not be known for its creativity. The groups, remaining cautious because of the Iraq war, SARS and the global economic crisis, have to digest their large industrial investments and the integration of their distribution. They are waiting, so nothing really new is happening. They prefer to refine the tried and true. This is particularly the case with Richemont. Within the group, the dynamics are diverse and contrasted among the brands that must rapidly affirm themselves, such as IWC, for example, that has demonstrated a large appetite and seems to be succeeding in the 'Latinization' of its collection, or those that need time to reflect, such as Cartier. As for Vacheron Constantin, it is looking to strengthen its presence among the ladies with the new Egérie line while Piaget is subtly becoming more aristocratic with its Secret Gardens.

The most beautiful watch this year, in my own personal opinion (with absolutely no relation to my recent criticism of the brand), is Jaeger-LeCoutre's special platinum edition Master LeCoultre. It is one of the purest and most wonderful expressions of watchmaking that I have seen over the last few years. It evokes harmony and perfect equilibrium between form, material, function and refinement.

At LVMH, the situation seems much more varied. The group's brands are being led by a TAG Heuer that is showing brisk vitality. The charisma and enthusiasm of Jean-Christophe Babin have been important elements in this revitalization. The man has charm and tact, masters remarkably well his profession, and knows all the brand's models by heart. He knew how to form a strong and creative team. An example of their work, which has a good chance of success, is the concept watch that was presented to the press. (See the Cover Story in this issue.)

Zenith is still in the phase of reaffirming its position and identity. To accomplish these goals, it is refining its marketing and its models. As for Ebel, whose task is more difficult following the brand's forced about-face in the past, it has seemingly not yet found its rightful position between the flamboyant Baroque lines of 'haute joaillerie' and the clearly more modest lines of 'prêt-à-porter'.

Bulgari, which left Geneva, inaugurated its new quarters in Basel. The aristocratic Italian took over the entire Hall 4, rebuilt and redecorated the interior, and has plans to remain there for the next 10 years. The enterprise welcomed visitors as they descended into a giant catafalque, using a sublime and vertiginous staircase, reminiscent of an archaeological visit to the tombs of the pharaohs. It was clearly a demonstration of power reflecting the good health of the enterprise that is now getting its watch brands Genta and Roth back into the saddle. (We return to this topic in our next issue, Europa Star 4.03.)

Infinitely more modest but also more convivial, our master watchmaker friends at the famous Academy of Independent Horological Creators showed their good spirits by opening a few bottles of bubbly each evening in front of the stand. Far from the charts of the stock exchanges, far from the worries about stock options, business plans and other marketing headaches, these ardent experts of the gear trains celebrated their heartening independence by speaking quite simply about… watchmaking. The likes of François-Paul Journe, Antoine Preziuso, Vincent Calabrese, Svend Andersen, Philippe Dufour and their friends don't need to worry. They are considered as 'Living Treasures' in Japan, the next gold mine of the most advanced levels in mechanical timekeeping.