Trade show anybody? All’s quiet in the exhibition industry

Trade shows were a regular feature of corporate marketing pre-Covid. They served as a reminder to key customers of a company’s stature, staff members loved the travel and socialising; and Government agencies, anxious to please, found them a great way to promote a large number of SMEs all at once.

Exhibitions and events were big money makers for firms like Informa (listed in London) and Reed exhibitions (a division of Relx group). Until Covid.

Last year the vast majority of trade shows were cancelled.

This year organisers hoped the vaccine roll out would provide a welcome boost, however that optimism seems misplaced. 

In the last two weeks Fancy Food, one of North America’s largest snack food shows has been pulled, as has In-Cosmetic Europe. Anuga, a popular food show, bravely proclaims 2021 is business as usual, but I suspect that is wishful thinking (and look carefully at Anuga’s site and you’ll see they’re hedging their bets with a real & virtual hybrid.)

Photo by David Nicolai 

Informa’s revenue plunged a whopping £1.3b last year and Reed’s £362m. Hardly chicken feed.

A greater concern for event organisers is the switch to digital. For example Grohe X a subsidiary of Lixil is spending its entire exhibition budget on a virtual platform which will be open throughout the year. 

Grohe are not alone.

I have always been sceptical about the value of trade shows. In entering new markets are they a good way to meet serious business partners? Are the visitors bones fide? It’s also very hard to measure a Trade show’s effectiveness.

Informa, Reed and others should be concerned as digital is an existential threat.

Is Peleton pedalling fast enough on exports to boost its share price?

It’s a brand that has yet reach its 10th birthday but has revenue over $1.8b. No mean achievement especially in a niche category: high end exercise bikes and treadmills.

Photo Andrew “Donovan” Valdiva

Peleton’s bikes sell for between $1900 and $4300, it has 5.4m members, and sells monthly memberships between $13 and $39.

Peleton, listed on the Nasdaq, was one of the stock market’s pandemic favourites. Revenue growth has been stellar, and in January the stock price reached an all time high.

Since then, the company stumbled. One reason was a recall on its Tread and Tread+ products. 

The gradual return-to-office trend provides another unwelcome headwind; gyms are reopening and enticing new punters constrained by WFH.

At the time of writing, Peleton’s stock price is down more than 20% from its peak.

Peleton’s focus has been the US and other big western markets like the UK, Germany, Canada and recently Australia. The brand clearly resonates not just with cyclists but serious road racers.

There’s a ton of those in Italy, France, Spain and Belgium, a huge number of untapped new users for it to target.

Despite sales dropping 30% in the pandemic, Eataly presses ahead with international expansion

How does one describe Eataly? For some it’s a foodie’s haven, for others an emporium of restaurants, shopping and culinary classes. A less favourable and cynical comment I heard was ‘Disneyland for pasta.’ 

Founded in 2006 in Moniticello d’Alba, the business has over 40 stores in over 18 countries. Its most successful market by far has been North America. Here the Madison, NY store turns over $85m a year, and Chicago $50m. Pre-covid annual sales exceeded Euro700m.

Photo Massimo Virgilio

There are different ownership structures globally. In Asia-Pacific for example the business is run by Japanese trading house Mitsui and restaurant chain Kichiri, together they own over 96% of the (Asia-Pacific) franchise. (A concession I think the Italian head office now regrets). As an aside I suspect the business underperforms in Japan, the stores are small, and neither Mitsui nor Kichiri are at the cutting edge of retail.

Growth is built on authenticity and provenance; Eataly has it in droves.

“We have done well on the topics of quality, originality, freshness, digestibility, history & traditions. It is now time to add sustainability to these topics.”


However Covid significantly curtailed foot traffic, especially to restaurants which account for 50% of revenue. Global sales dropped, a store in Italy was shut, and according to the Italian press, shareholders were tapped for refinancing plus a new loan agreement worth Euro100m.

Despite these set backs, not to mention a few management upheavals, in May, Eataly opened its first London store. It’s in Broadgate next to Liverpool street station. It’s a great location, right in the City of London. This store covers 2 floors and features cocktail bars, a cafe, pasta restaurants, a pizzeria, an ice cream parlour plus a wine shop with more than 2,000 Italian labels.

Eataly London dessert

Eataly’s bet is that workers are going back to the office. 

Given the drop in physical foot flow you’d imagine Eataly had dialled up its EC business. This seems to be patchy, just last October it signed an agreement with Mercato for same-day delivery in downtown New York City, Boston, Chicago and Los Angeles.

Across the pond in London, although the physical emporium is open, the online store is yet to take clicks.

Who works achieves and who sows reaps. Middle East critical for Aston Martin’s survival

Made famous by James Bond, Aston Martin’s success is now dependant upon a Canadian billionaire, Daimler Benz and Middle Eastern sales.

After a much vaunted 2018 IPO, the business subsequently stumbled and in 2020 received three capital injections. In the latest twist, Lawrence Stroll of F1 fame took a 25% share along with Mercedes who now own 20%

Whilst exports are 80% of revenue, global sales dropped 38% last year following a decision to ‘destock’ dealers. Stroll is adamant that scarcity is key to driving up brand value.

Aston Martin’s biggest region is Europe and the Middle East accounting for 30% of sales. Here there are more dealers than either the US or Asia-Pacific.

“As you would expect, the UAE is the biggest Middle East market for Aston Martin and Kuwait is also a key market, with Saudi Arabia as the second largest luxury market in the region,”

former aston martin CEO

Perhaps the DBX, Aston Martin’s new SUV is the solution to the brand’s woes? It’s targeted at female buyers and was conceived by an all-female advisory panel. Only 10% of Aston Martin owners world-wide are women.

In the Middle East there is a much lower ratio of female/male drivers. In Saudi it’s estimated there are only about 2m women driving (population 34m).

Recently Aston Martin’s share price has recovered slightly. One reason, sales of the DBX globally have shown early promise.

Aston Martin runs a dealer franchise business model enabling the company to maintain strong control over image while limiting capital investment. Dealer margins are said to range between 10-15%; they make much more on parts & service, financing & insurance and perhaps surprisingly, trade-ins.

Overall Aston Martin’s gross margins average 18% and net profit margin was -67%. (Shockingly low I know) For Lawrence Stroll’s turn around to succeed, Aston Martin needs to hold firm in the Middle East, and improve mix with models like the DBX, priced at a cool £158,000. 

In parallel the company needs to rebuild China which performed poorly in 2020.

I hope the DBX isn’t too little too late. Whilst I can understand management’s desire to appeal to a broad target market, the most successful brands are focused on a very specific demographic, and remain true to their core essence.

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