January 2005
Best Practices: Share of the cut

H2 Events owns 50 percent of the Centurion Show with 98 exhibiting companies owning the other 50 percent

By Cathy Chatfield-Taylor

As pampered guests at the invitation-only Centurion Show, fine jewelry retailers will enjoy complimentary rooms, meals, and nightly entertainment with open bar, Jan. 31–Feb. 2, 2005, under tight security at an undisclosed resort in Tucson, AZ — exclusively at the expense of the high-end jewelry designers and manufacturers who co-own the show.

“High-profile sponsorships make attendees think the event is being brought to them by sponsors, not the exhibitors,” says Howard Hauben, President and CEO of New York-based H2 Events (www.h2consult.com), which owns 50 percent of the Centurion Show LLC with 98 exhibiting companies owning the other 50 percent. “While you might be able to sell sponsorships, you find that the exhibitors lose prestige. So we’ve eschewed going out of our way to sell a lot of sponsorships.”

It’s one of many decisions made jointly by Hauben and his managing board, comprised of three to five employees of H2 Events and an equal number of exhibitor/owners, who are elected to two-year terms. The shared ownership model gives exhibitors equal say in policy decisions about the show’s venue, dates, pricing and operation. The benefit, he says, is “curtailment of the potential for show management to cave in to easy money, unrealistically high margins and possibly greed.”

Exhibitors who joined Centurion Show its first year, 2002, received shares in exchange for a nominal investment, which was credited to their first-year exhibit fee. The LLC structure limits their liability in case of a loss and gives them a say in whether profits are distributed or reinvested. To date, Centurion has operated at a “small profit or a small loss,” according to Hauben, and any surplus has been plowed back into the show.

“The exhibitors help determine what they want in terms of financial success,” he says. “If you grow too fast, you outgrow your viability. This is part of figuring out the right size for the show, with the exhibitors in equal decision-making capacity. We want to think about how much we can sell before we start to suffer. What’s the right size for the value?”

Despite a hefty waiting list, the board has decided to limit the number of new exhibitor/owners so Centurion doesn’t outgrow its one-floor layout at the hotel (the identity of which is confidential for security reasons). Still, the show has grown 30 percent, from 80 booths in 2002 to 106 booths in 2005. Attendance has grown 43 percent, from 175 companies the first year to about 250 in 2004, due in part to the popularity of concurrent gem shows in Tucson.

The financial structure allows Centurion Show to drive revenue into value, providing a luxurious environment where exhibitors are gracious hosts. As co-owners, exhibitors entrust Hauben with day-to-day management, knowing he’ll recommend necessary changes and bring them together for a vote if a decision is contentious. Otherwise, the board meets quarterly and communicates by conference call and e-mail throughout the year.

“They’re busy running their own companies,” Hauben says. “My job is to be a good show manager — not to become unilateral, and to be diligent about integrity, to do what’s right for the exhibitors and the show.”

The model has been so successful, Hauben launched a consumer show in which 55 of Centurion’s retail attendees are the exhibitors. The Prestige Jeweler’s Vault (www.buyjewelryatcost.com), held Oct. 22–24, 2004, in Osceola, FL, attracted about 650 people — despite the $154,000 advertising budget. Nevertheless, the 45 companies that opted for co-ownership of Prestige Jewelers Inventory Clearance Show (PJICS, www.pjics.com) LLC intend to build the brand with a second show in 2005.

Like Centurion Show, PJICS gives exhibitors the power to shape their own future. “You don’t presuppose a high margin,” Hauben says. “You can invest in the show on a continual basis. The exhibitors may not make a fortune on the show company itself, but if it helps them sell, it’s providing value.”