Tiffany hits back at Swatch over lawsuit
US luxury jeweler Tiffany & Co. denied on Monday that it had violated an agreement with Swatch, and accused the Swiss watchmaker of provoking the breakdown of their partnership.
The denial came hours after Swatch, the world's biggest watchmaker, said it was ending the two companies' project to make and sell Tiffany-branded watches and vowed to seek damages against the New York-based jewelry firm for lost business.
"Tiffany & Co. is confident that its position will be vindicated in the pending arbitral proceedings in relation to this matter and Swatch's misconduct," the jewelry firm said.
Tiffany alleged that Swatch had broken its promises and failed to provide appropriate distribution for Tiffany-branded watches, depriving it of the increase in watch sales and royalty income it had been seeking.
In its own statement, Swatch said that Tiffany had failed to uphold its side of the partnership, accusing the jeweler of "systematic efforts to block and delay development of the business".
Swatch, based in Biel, Switzerland, founded Tiffany Watch in 2008 to develop, produce and distribute Tiffany-branded watches under an agreement with the US jeweler.
With the termination of the agreement on Monday, Tiffany Watch will begin winding down its business over two years.
The divorce between the two companies marks the end of a partnership that failed to live up to initial hopes.
Analysts at Bank Vontobel, a Swiss bank, estimated that sales of Tiffany Watch reached 30 million Swiss francs ($34 million) in 2010, making up just 0.5 percent of Swatch's overall revenues.
They believed however that the sales potential was 300-400 million Swiss francs.
© 2011 AFP