Last week, Rolex, Patek Philippe, Chanel, Chopard and Tudor made a joint announcement on their departure from Baselworld, the world’s largest watch industry trade show, to create a new watch trade show in Geneva with the Fondation de la Haute Horlogerie. MCH Group, the parent company of Baselworld and Art Basel, takes note of the cancellation of major exhibitors with great surprise. The group will make a decision on the continuation of Baselworld and on investments in its further development in the next few weeks. On the other hand, the Swiss company—which took a great hit financially due to COVID-19—has laid off 150 employees at MC2 group (in its live marketing division) in the United States.
Five luxury watch brands are leaving Baselworld to form a new watch trade show in Geneva
MCH Group has its roots in the 'Schweizer Mustermesse in Basel' which was established in 1916 and later gave rise to the 'Messe Basel' which, in 2001, merged with the 'Messe Zürich'. It offers live marketing solutions and trade fairs on a global scale.
MCH group organises several leading international events including the Art Basel shows in Basel, Miami Beach and Hong Kong, the watch and jewellery show Baselworld, as well as Grand Basel and Swiss-Moto. The group also owns the exhibitions companies and exhibitions sites in Basel (Messe Basel) and Zurich (Messe Zürich).
MCH Group’s exhibition site in Basel
Art Basel Hong Kong 2019
Prior to the coronavirus outbreak, the Swiss company had faced challenges in its business restructure last year. Due to limited investment resources, it had to choose a single core business from two of its main businesses: trade fairs and live marketing solutions. It decided to focus on trade fairs going forward and to explore everything from cost-cutting to a full or partial sale of its robust Live Marketing Solutions division.
While MCH group is going through the difficult restructuring process, it is further plagued by economic upheavals across the world amid the coronavirus outbreak. It had been forced to cancel the Hong Kong edition of Art Basel and refund 75% of the booth fee to participating galleries and exhibitors. The Swiss edition of the Art Basel is now postponed from June to September. It is still uncertain whether the event can be held as scheduled.
As MCH group is under pressure to cut costs and streamline its business, it has recently laid off 150 employees in its live marketing division MC2. The staff cut represents 42% of the 350-person division. The company had about 800 employees before the layoffs.
MCH's Live Marketing Solutions division provides event marketing service
There has been a debate among MCH shareholders on the company’s decision to focus entirely on trade fairs. Some think that it should focus more on its live marketing business instead of doubling down on its own fairs.
When MCH acquired MC2 in 2017, it was the biggest acquisition in the 100-year history of MCH Group and a key strategic expansion. According to MCH group’s statement, the move is described as ‘a tremendous step forward in the implementation of our corporate strategy’. MC2 had 15 locations in the US and one in Dusseldorf, Germany, and an annual turnover of roughly CHF160m (US$160.6m) at that time.
A representative for MCH group told Artnet News that the cuts impacted staff in the United States ‘because in the USA—unlike in Europe—there are no measures such as short-time work to avoid redundancies.’ The representative also insisted that the changes at Baselworld and MC2 ‘do not have any impact regarding Art Basel.’