Grand Basel, the Art Basel for luxury cars, was set for its U.S. debut in Miami next year. But just six months after signing a contract with Miami Beach for the event, Art Basel’s parent company, MCH Group, said it is pulling out.
Grand Basel was billed as a cultural car event, with around 200 automobiles from the “past, present, and future” on display, the majority available for purchase. The event debuted in Basel, Switzerland, in September and planned to come to the Miami Beach Convention Center in February 2019.
The website Artsy.net first reported the news that the Miami Beach edition of Grand Basel had been “indefinitely postponed” as financial woes deepen at Art Basel’s parent company, MCH Group.
MCH’s financial performance is not negatively impacting Art Basel Miami Beach, according to fair director Noah Horowitz. The fair opens to the public Thursday.
Christian Jecker, head of corporate communications for MCH Group, confirmed the cancellation.
“The format of Grand Basel’s first edition in September 2018 in Basel will not be repeated,” he wrote in an email. “The concept of Grand Basel is being verified, and it has therefore been decided to forgo the planned expansion to Miami Beach — at least in 2019. We will examine in depth the future of Grand Basel and establish a solid business case for a future format. At the moment we cannot give any further specific information about the future of Grand Basel.”
As for the Art Basel fair, “the Art Basel umbrella — which includes Miami — remains strong overall,” Horowitz said. “The shows continue to grow in terms of quality,” he said, noting that 95 percent of galleries continue to reapply to appear in the fair.
“As far as we are concerned, everything we are doing will continue on the trajectory we’re on. We’re also in a strong place in terms of the global thrust of what we do.”
Renovations to the Miami Beach Convention Center have improved it as a show platform, Horowitz said. Last year the eastern side of the hall was blocked by construction; this year, entrances on all sides are open and valet parking is being offered both on Washington Avenue and Convention Center Drive. “The building looks great. Clients are happy. ... We’re in a good place.”
MCH has been best known as the producer of Baselworld, the premium watch trade show held in Switzerland, and prestigious Art Basel contemporary art fair in Switzerland. In 2002, the company launched Art Basel Miami Beach, an event credited with introducing ultra high-net-worth individuals to Miami and boosting the local economy and cultural scenes. The fair, now in its 17th edition, opens to the public Thursday.
In recent years, the live events marketing company has expanded beyond its signature events. In 203 it launched Art Basel Hong Kong; it since has acquired stakes in regional art fairs and introduced new initiatives. But some of those efforts have fallen flat amid increased competition from other shows and the internet. Several major brands — including Swatch — announced their departure from Baselworld. In September, the company’s longtime CEO left as MCH announced it expected a shortfall of $100 million.
In November, the publicly traded company issued a statement saying it was streamlining the company and reviewing its strategy. “The globally leading position of Art Basel is to be further strengthened with the focus on the existing shows,” the statement said.
The company said it would sell stakes in Art Dusseldorf and the India Art Fair and would not continue with an announced investment in a new art fair in Singapore. According to the statement, MCH plans to modernize Baselworld and boost its digital offerings.
In September, the company released a financial report that showed a consolidated operating income of $305.6 million from Jan. 1-June 30, a 16.7 percent increase over the same period in 2017.
But the report also showed the company’s profit margin dipped to 6.1 percent, compared to 8.7 percent last year, as well as a 20 percent increase in operating expenditures ($331 million).
The overall profit was down 17 percent, mostly due to its annual Baselwatch watch and jewelry trade fair, which lost $100 million this year after several major exhibitors exited the show.
“The MCH Group is undergoing a process of transformation in which it has to align itself to the major changes taking place in the classical exhibition and event business,” the company stated in the report. “Over the past few weeks, the management has been looking intensively into the continuing transformation process and has worked out a corresponding action plan.”
MCH also appointed a new interim CEO, Hans-Kristian Hoejsgaard, following the August resignation of former CEO René Kamm, who had held the post since 2003.
Earlier this week, that expected loss deepened to more than $170 million, according to Baseler Zeitung. MCH’s stock, which trades on the Swiss exchange, closed down almost 3 percent Monday at 24.50 Swiss francs, down from the 52-week high of 68 Swiss francs (about $68 U.S.)