Tiffany, Swatch trade jabs over watch agreement

AP News
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Posted: Sep 12, 2011 6:12 PM
Tiffany, Swatch trade jabs over watch agreement

Watchmaker Swatch Group said Monday it has ended its partnership with Tiffany & Co., accusing the jeweler of trying to "block and delay" a joint venture the companies entered about four years ago.

Tiffany responded that it was Swatch that was unwilling to "work cooperatively."

The companies' partnership goes back to late 2007, when they announced a 20-year agreement where Swatch would create a new company, Tiffany Watch Co. Ltd., to make and sell watches under the Tiffany brand. Swatch was to sell the watches at Tiffany stores and other high-end retailers and share the profits with Tiffany.

Swatch, based in Switzerland, said in a statement Monday that it had decided to end the agreement because of Tiffany's "systematic efforts to block and delay development of the business." It did not elaborate, but Swatch's chairwoman told Reuters in March that Tiffany didn't give the watches enough prominence in its stores.

Swatch also said Monday that it would file claims against Tiffany for compensation for lost future business.

Tiffany, based in New York, responded that Swatch had been "unwilling to honor the terms of our agreement, make the necessary commitments and work cooperatively to develop the business" for Tiffany watches. It also said that Swatch had "failed to provide appropriate distribution" for the watches.

Tiffany said it was "confident that its position will be vindicated" in coming arbitration.

Tiffany's stock rose $1.36 to close at $69.85 Monday. Swatch Group AG fell slightly .20 Swiss francs to 354 on the Swiss stock market.