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Geneva Watch Shows: are ‘other’​ brands prohibited at Palexpo? What if the reason were juridical?

Temps de lecture : 6 minutes

On May 7, 2020, on my Linkedin profile, the bomb was posted. It took a confined summer before it exploded in September, on the national television RTS and on the front page of the newspaper Le Temps. A milestone article, to be read again, which is in line with the DNA and mission of JSH Magazine for the sector, since this media was the official organ of the Basel Fair for more than 50 years.

 

By Joël A. Grandjean | Editor in Chief JSH® Magazine & Swiss Watch Passport
Subscribe to JSH, since 1876

 

{May 07, 2020} Baselworld is giving up, the news just came down. But what is stopping Geneva and Palexpo from simply brandishing a “Welcome” sign to the 500 watch brands that want to exhibit in Geneva in April 2021? And what if this strong gesture were delayed for juridical reasons?

 

Trauma: Rolex and Patek slam the door on the Basel exhibition
By announcing their arrival in Geneva on 14 March 2020, Rolex-Tudor and Patek Philippe, joined by two other Chanel and Chopard independents brands have shaken up in Geneva a balance of almost a quarter of a century. Namely that Palexpo will now have only one ‘watchmaking tenant’ on its premises, but two. I mean that two brand exhibitions will henceforth be on the same dates in areas that belong to the Geneva canton via its 80% shareholding in Palexpo. So what is there to obstruct the halls of this complex so that they are not wide open to all the other players, whether large or small independents or smaller groups?

 

Oops, the non-competition clause that nobody thinks about!
In a contract, such a clause is totally legal, normal, and even highly recommendable. How could the FHH, Fondation de la Haute Horlogerie and organizer of Watches & Wonders (ex-SIHH), the main tenant of Palexpo for more than 20 years in terms of brand shows, could have been so careless as to would have omitted to include it in its contract as a guarantee that its lessor would not give in to the temptation of renting out its premises to other watch brands or organizers? I’s sorry but in view of the crisis that is still raging and is knocking down one of the leading Swiss economic sectors, the presence of such a clause now seems indefensible from a sectoral point of view. In other words, if it’s perfectly legal, does that make it moral?

 

In view of the crisis that is still raging and is knocking down one of the leading sectors of the Swiss economy, the presence of such a clause now seems indefensible from a sectoral point of view.

 

It was a non-watchmaking friend, who is used to the trade fair business, who made me aware of this: this type of clause is frequent in business and the trade fair world is no exception. Easy to understand: you are a baker, you are renting an arcade in a new building complex and, of course, you contractually require that there will be no other baker tenants. It is legitimate to ask for it and, if the lessor agrees, it becomes a legal requirement. Would it be the same for the world of watchmaking exhibitions in Geneva?

 

Could Rolex showing allegiance to the Richemont group? Let’s be serious!
The current deadlock situation could therefore be of a juridical nature. There are some indications that support this hypothesis. The first comes directly from the press release from Rolex and its four new co-exhibitors. It says “with the FHH’s collaboration” and it is co-signed by Richemont Group CEO Jérôme Lambert. But for what other reason than a legal one, would the watchmaking giant Rolex, which is here associated with the prestigious Patek Philippe, have shown its ‘allegiance’ to the Richemont group which, as everyone in the sector knows, remains at the helm of the FHH?

baselworld 2019; impression; hall 1.0; rolex; booth

The other clue can be found in an interview with Pierre Maudet in Le Matin Dimanche. To my confrere Ivan Radja’s question “Palexpo is 80% owned by the Canton. What is your room for manoeuvre“, the new “Mr. Watchmaker” of Switzerland, since he is State Councillor in charge of Economic Development in Geneva, answers: “The canton does not manage Palexpo. But I am still in discussion with the boss of the Richemont group… (…).”Is it because this is the legal and contractual procedure that the State Councillor is ‘dealing’ with the management of Richemont?

 

EPHJ and GemGenève, two fairs that already decline watch brands
Finally, the third clue is one of observation. EPHJ and GemGeneva, two other Palexpo “tenants”, have one particular feature in common: Among their more than 1000 exhibitors, there are no watch brands. Only co-contractors or producers are accepted. A fact which argues in favour of the existence of such a clause, since their presence within the same premises cannot therefore fall within the ambit of any non-competition clause.

The watchmaking sector and Geneva taken hostage?
According to the Matin Dimanche, the boss of the Richemont group has always had “the intention of having an “in” show (editor’s note: at Palexpo) and an “out” show in town”. In other words, and please forgive me if I read between the lines, “there is no way for him to open Palexpo to others”. But how, without a contract that would give him legitimacy, could his opinion prevail over the strong wish of more than 500 players in the same sector? Who only want one thing, to exhibit where it happens, i. e. not too far from Rolex and Watches & Wonders (FHH). Especially since these ‘other’ players, large or small, are being deprived of any Basel alternative, since on 7 May 2020, Baselworld announced that it was throwing in the towel. Of course, Richemont is one of the voices that cannot be ignored. But what about LVMH Group and Swatch Group, what about all the other players?

 

Does an A-League make sense without a B-League, can haute-couture live without ready-to-wear? Geneva unwillingly ends up with a concept that has had its day. That of an haute-horlogerie that forgets to embrace the industrial excellence that nevertheless represents the majority of production in this country. Starting with Rolex, which produces watches for less than CHF 10,000.00 and which, through the Tudor brand, manages to occupy the entry-level Swiss made segment in terms of quality.

 

Legal, but not moral: if there’s a clause in the contract, Richemont should give in…
The hypothesis of this clause provides a plausible explanation of the current deadlock and the fact that at each request, one either kicks in the sidelines or replies that negotiations with the Richemont group are under way. For assuming that Rolex and its four independents were able to benefit from one exception, why not dream of a second, third and even 500 other exceptions? Even if no one can predict how much space the two exhibitions will require, Palexpo probably still has space left. It would be unwise in the name of legality to prevent this Cantonal structure from opening its offer to other “tenants”. Especially in view of the economic crash it has just experienced following cancellations due to pandemic causes.

 

Palexpo probably still has space left and It would be unwise in the name of legality to prevent this Cantonal structure from opening its offer to other “tenants”. Especially in view of the economic crash it has just experienced due to all the last pandemic cancellations

 

Faced with all these players in a watchmaking industry that aspires to recover after the economic disaster it has just suffered, faced with the probable damage to Geneva’s image caused by a press that is already talking in German-speaking Switzerland about the Geneva Mafia or cartelization, there would be a certain arrogance in not allowing Pierre Maudet and his Economic Development department to have a free hand. He really needs to be finally able to wave a warm Bienvenue, Welcome to the whole of the watchmaking world! Everyone would gain from this, all those, including Richemont, who dip their existential roots in the richness of a plural sector.

 

©Genevaworld by JSH® Magazine. Geneva on May 07, 2020.

 

 

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