UPDATE 1-Swatch quits annual Baselworld trade fair - Swiss newspaper

(Adds comments from Swatch Group statement)

GENEVA, July 29 (Reuters) - Swiss watchmaker Swatch Group is quitting the annual Baselworld watch and jewelry trade fair, the NZZ am Sonntag newspaper reported on Sunday, calling time on an event that has been a fixture of the luxury industry calendar for a century.

Omega maker Swatch is the most important exhibitor at Baselworld, which traces its history back to 1917, but more and more brands are deserting the fair held every March, blaming high costs and insufficient returns.

"The Swatch Group has decided not to be present at Baselworld from 2019," the newspaper quoted Swatch chief executive Nick Hayek as saying.

Swatch Group confirmed the decision in a statement.

The portfolio of Swatch, based in Biel in western Switzerland, spans the expensive Breguet, more affordable Longines and plastic Swatch timepieces.

Some of Swatch's high-end competitors have left Basel for a rival fair in Geneva, but Hayek said traditional annual watch fairs were no longer useful in a more transparent and fast-paced world.

Major exhibitors such as Swatch budget about 50 million francs ($50.3 million) for each Baselworld, to cover travel and hotel expenses for staff and guests, the paper said.

"Annual watch fairs, as they exist today, no longer make much sense," Swatch Group said in its statement.

"This does not mean that they should disappear. But it is necessary that they reinvent themselves, responding appropriately to the current situation and demonstrating more dynamism and creativity. At the moment, the trade fairs are failing to do so."

Hayek, a famously outspoken and flamboyant character in a staid and conservative industry, cited the cost of the fair's 430 million franc exhibition building as a reason for the decision to withdraw.

"We are not there to amortize an expensive hall designed by (Swiss architects) Herzog & de Meuron," Hayek told the paper.

Swatch Group said the funding of the new building was largely financed by the watch industry during the fairs, and Baselworld's organizers were more concerned with that than "having the courage to make real progress and to bring about true and profound changes."

Nobody at Baselworld could be reached for comment on Sunday.

Michel Loris-Melikoff, who took over as managing director of Baselworld at the beginning of this month, said Baselworld intended to remain the number one event for the watch industry.

"It would be a great disappointment if the Swatch Group were to leave Baselworld," he told the paper. "We are doing everything we can to keep them in Basel." ($1 = 0.9943 Swiss francs) (Reporting by Tom Miles, Editing by Raissa Kasolowsky, Editing by William Maclean)