Swatch vs. Tiffany update

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Swatch vs. Tiffany update

Post by Ocean on 2012-09-11, 11:28

Been watching this for a while and it looks like it is going forward now. From HauteTime

Article by: Chris D

U.S. jeweller Tiffany & Co is planning on building up its watch business once its legal woes with former partner Swatch Group SA are resolved, according to a statement issued last Thursday.

Chief Executive Officer Michael Kowalski claims that while the company only gets 2 percent of its revenue from watch sales at the present time, the plan is to increase sales over time until they return to the 9 percent level of two decades ago.

“We are working very diligently to imagine what our watch business might look like once our disagreements with the Swatch Group are behind us,” said the CEO at a New York Goldman Sachs retail conference.

The partnership with Swiss watchmaker Swatch began in 2007 and was to last for twenty years. However, the deal ended in 2011 as the arrangement for Swatch to produce, develop and distribute Tiffany watches never took flight.

Both companies have sued each other in a Netherlands arbitration court, and arbitration will begin in the fall season.

Swatch, the world’s largest manufacturer or watches, has placed blame for the lack of profitability on Tiffany, stating the U.S. jeweller blocked and delayed the development of the business venture. Tiffany has stated that the Swiss company never honored the agreements terms and did not provide adequate distribution.

However, Kowalski remains optimistic about the watch sales future, saying that while watches will never make up 50 percent of the sales revenue, the watch business is a solid business opportunity for Tiffany.

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