Partnership Ends Between Swatch Group and Tiffany Co.
A surprising announcement was made in the luxury market. Swatch Group has terminated its alliance with Tiffany & Co. and ended its partnership.
Swatch Group has blamed U.S. jeweler Tiffany & Co. for blocking the development of their watch joint venture. The partnership between the Swatch Group & Tiffany & Co. was to develop a luxury watch line.
Swatch claimed damages from the luxury jeweler for loss of long-term future business. There is also talk that Tiffany could become a corporate takeover target.
Earlier this year, Swatch Group Chairwoman Nayla Hayek stated that back in 2007, Tiffany Watch Co. was created to manufacture Swiss-made watches under the Tiffany trademark. Unfortunately, the luxury watch line showed disappointing sales and the watches apparently were were not well displayed in Tiffany’s stores.
Swatch stated in a press release, “Today Swatch Group terminated its cooperation contracts with Tiffany & Co. This action became necessary following Tiffany & Co.’s systematic efforts to block and delay development of the business.”
Tiffany responded to the Swatch Group claim by explaining it did honor its partnership agreement obligations with Swatch, as well as stated that Swatch did not make the necessary commitments to develop the new watch business.
According to Swatch, the Swiss company expects that Tiffany Watch Co. will be allowed to ramp down the current business over the next two years once the partnership contracts have been officially terminated.
I’m sure we will be reading much more about this in the coming months as additional information is uncovered and distributed to the media.