The Swatch Group has ended its watch making partnership with Tiffany & Co alleging the high-end jeweller made “systematic efforts to block and delay development of the business”.
Announcing the end of the partnership which founded the Tiffany Watch Co in 2008, Swatch Group siad it would claim for damages against Tiffany & Co to compensate for the loss of planned long-term future business.
Responding to the announcement, Tiffany & Co issued a statement arguing that in the three years since the launch of the Tiffany Watch Co, it had become increasingly clear that Swatch was “unwilling to honor the terms of our agreement, make the necessary commitments, and work cooperatively to develop the business for Tiffany & Co watches in the luxury space”.
“Despite assurances to the contrary made in 2007, Swatch has failed to provide appropriate distribution for Tiffany & Co brand watches, with the result that our current business forecasts do not include any meaningful increase in watch sales or royalty income,” the statement said.
“Tiffany has honored its obligations under the agreement, and insisted that Swatch honour its own obligations, particularly its obligation to respect Tiffany’s rights regarding brand-management and product design.
“Tiffany & Co is confident that its position will be vindicated in the pending arbitral proceedings in relation to this matter and Swatch’s misconduct.”
Under the framework of the partnership, the Swatch Group founded Tiffany Watch Co, which was responsible for the development, production and distribution of Tiffany & Co branded watches.
Worldwide sales were handled through points of sale operated by Tiffany & Co, The Swatch Group and independent retailers.
Tiffany Watch Co is now expected to wind down its business over two years.