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Trade Braces for Smaller, Cheaper Baselworld

Mar 20, 2019 5:53 AM   By Joshua Freedman
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RAPAPORT... Baselworld has reduced prices for diamond exhibitors by 10% to 15%, after rising costs had prompted companies to abandon the annual show.

The move ensures its prices match those of the competing GemGenève fair, a Baselworld spokesperson told Rapaport News Tuesday.

The 2019 edition of Baselworld, beginning Thursday, will still see a 10% drop in the number of exhibitors in Hall 3, which houses loose-diamond companies. But the decline, to a total of 120, has slowed compared with last year, as the trade responded positively to new management’s initiatives aimed at repairing a damaged relationship between organizers and diamond exhibitors, the spokesperson noted.

“There’s an [emphasis] on jewelry this year, and on gems as well,” the spokesperson for the Swiss show said. “Last year, when GemGenève started, a couple of exhibitors broke away, but this year it’s quite stable.”

New management

Aside from the price drop, Baselworld has negotiated deals with local hotels and restaurants to keep costs down. It’s also tried to make more fundamental changes to clients’ perception of the show, after several diamantaires complained that the previous management didn’t care about them, and placed them in an unfavorable section of the venue.

Michel Loris-Melikoff took over from long-standing chief Sylvie Ritter as managing director of the show last May, while Bernd Stadlwieser will soon replace René Kamm as CEO of MCH Group, the parent company. Some of the diamond dealers Rapaport News interviewed reported an improvement in customer care under the new leadership, with organizers now listening to their requests and ideas.

“They are a lot more open-minded than what I ever saw or felt in past years,” said Bruno Scarselli, a partner at Scarselli Diamonds, which will exhibit in Hall 3 as usual. “They certainly know that whatever used to be is not working out.”

Diamond exhibitors were also buoyed by a rumor that they’d be moving to a better location closer to the watch and jewelry exhibitors in 2020, after years of being in a separate hall with lower traffic. Baselworld declined to comment on whether that was true, but said it would announce plans for the future at the end of the show next week.

Traders felt a change was necessary. MCH scaled back the fair last year to about 650 exhibitors across all categories, versus 1,300 in 2017, and reduced it to six days instead of eight. But while the shorter length made it cheaper, it forced buyers to prioritize their time, resulting in many of them focusing on the watch and jewelry displays and ignoring the diamond hall, one exhibitor explained.

Expensive show

A booth can cost diamond dealers $250,000 or more, plus other expenses such as travel, accommodation, food and insurance. One former exhibitor estimated he spent more than $1 million each year on Baselworld, and was no longer making the sales to warrant that. It doesn’t help that local businesses hike their rates during exhibition week, with the cost of a schnitzel rising to CHF 50 ($50) from the usual CHF 12 ($12), one participant observed.

To minimize the outlay, several diamond traders will be attending this year’s show without renting a booth as they assess whether to return next year. The large expenses may no longer be worthwhile, noted Nissim Zuaretz, CEO of Israel-based DN Diamonds, who’s taking a “one-year break” from exhibiting but will still be in Basel. Swatch Group’s exit from the show made the decision easier, he said.

“I already have contacts with customers [I see at the show],” Zuaretz noted, adding that those client relationships would exist irrespective of whether he exhibited. “My opinion is it won’t be a strong future at Baselworld for loose diamonds.”

Andre Messika, a high-end diamond and jewelry supplier, also won’t take a booth this year, but is open to rethinking next year, said the founder of the company that shares his name. Messika will also attend, despite not having his own stand.

While the Basel fair’s diamond hall faces an uncertain future, GemGenève is expecting exhibitor numbers to grow 40% to about 200 for its May show, its second edition after launching last year.

Image: Visitors at the 2017 edition of Baselworld wait for public transportation. (Shutterstock)
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Tags: Andre Messika, basel, Baselworld, Bernd Stadlwieser, Bruno Scarselli, DN Diamonds, GemGenève, Joshua Freedman, MCH, MCH Group, Messika, Michel Loris-Melikoff, Nissim Zuaretz, Rapaport News, René Kamm, Scarselli Diamonds , Sylvie Ritter
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