Trade Braces for Smaller, Cheaper Baselworld

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 GemGen??vefair, a Baselworld spokesperson told Rapaport News Tuesday. The 2019 edition of Baselworld, beginning Thursday, willstill see a 10% drop in the number of exhibitors in Hall 3, which houses loose-diamondcompanies. But the decline, to a total of 120, has slowed compared with lastyear, as the trade responded positively to new management's initiatives aimedat repairing a damaged relationship between organizers and diamond exhibitors,the spokesperson noted. "There's an [emphasis] on jewelry this year, and on gems aswell," the spokesperson for the Swiss show said. "Last year, when GemGen??vestarted, a couple of exhibitors broke away, but this year it's quite stable." New management Aside from the price drop, Baselworld has negotiated deals withlocal hotels and restaurants to keep costs down. It's also tried to make morefundamental changes to clients' perception of the show, after severaldiamantaires 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 SylvieRitter as managing director of the show last May, while Bernd Stadlwieser willsoon replace Ren?(C) Kamm as CEO of MCH Group, the parent company. Some of the diamonddealers Rapaport News interviewed reported an improvement in customercare under the new leadership, with organizers now listening to their requestsand ideas. "They are a lot more open-minded than what I ever saw orfelt in past years," said Bruno Scarselli, a partner at Scarselli Diamonds,which will exhibit in Hall 3 as usual. "They certainly know that whatever usedto be is not working out." Diamond exhibitors were also buoyed by a rumor that they'dbe moving to a better location closer to the watch and jewelry exhibitors in2020, after years of being in a separate hall with lower traffic. Baselworld declinedto 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 fairlast 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 madeit cheaper, it forced buyers to prioritize their time, resulting in many ofthem 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, plusother expenses such as travel, accommodation, food and insurance. One formerexhibitor estimated he spent more than $1 million each year on Baselworld, and was no longermaking the sales to warrant that. It doesn't help that local businesses hiketheir rates during exhibition week, with the cost of a schnitzel rising to CHF50 ($50) from the usual CHF 12 ($12), one participant observed. To minimize the outlay, several diamond traders will beattending this year's show without renting a booth as they assess whether toreturn next year. The large expenses mayno longer be worthwhile, noted Nissim Zuaretz, CEO of Israel-based DN Diamonds, who'staking a "one-year break" from exhibiting but will still be in Basel. SwatchGroup's exit from the show made the decision easier, he said. "I already have contacts with customers [I see at theshow]," Zuaretz noted, adding that those client relationships would existirrespective of whether he exhibited. "My opinion is it won't be a strongfuture at Baselworld for loose diamonds." Andre Messika, another Israel-based company, also won't takea booth this year, but is open to rethinking next year, said the founder of thecompany that shares his name. Messika will also attend, despite not having hisown stand. While the Basel fair's diamond hall faces an uncertainfuture, GemGen??ve is expecting exhibitor numbers to grow 40% to about 200 forits May show, its second edition after launching last year.Image: Visitors at the 2017 edition of Baselworld wait for public transportation. (Shutterstock)