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Tiffany, Swatch watch contract officially severed
Tiffany & Co. is on the hunt for another company to handle its watch business following the official termination of its agreement with the Swatch Group Ltd.
New York--Tiffany & Co. is on the hunt for another company to handle its watch business following the official termination of its agreement with the Swatch Group Ltd.
According to a Form 8-K Tiffany filed with the Securities and Exchange Commission Oct. 11, the multi-million dollar claims Swatch and Tiffany filed against each other regarding the dissolution of their December 2007 agreement are pending in confidential arbitration.
While the three-member arbitration panel hasn’t issued a decision, Tiffany said it has received numerous communications from Swatch Group indicating that from Swatch’s viewpoint, the agreement between the two parties was terminated as of Oct. 1.
Tiffany said it is “proceeding on that basis with plans to design, produce, market and distribute Tiffany & Co. brand watches through alternative arrangements.”
The timepiece row between the Swiss watch company and the New York-based retailer dates back to September 2011, when Swatch publicly announced it was terminating its watch distribution agreement with Tiffany and that Tiffany Watch Co. Ltd., the company formed under the partnership, would wind down its business in two years.
Tiffany Watch Co. Ltd. developed, produced and distributed Tiffany & Co.-branded watches that were sold in stores, including independent retailers, worldwide.
Swatch Group claimed it was terminating the contract because of Tiffany’s “systematic efforts to block and delay development of the business,” while Tiffany accused Swatch of not respecting its rights regarding brand management and product design.
Swatch Group filed a 3.8 billion Swiss francs ($4.14 billion) claim for lost profits in the case while Tiffany’s counterclaim is for 541.9 million Swiss francs ($589 million).
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