Swatch Group and Tiffany & Co. (NYSE:TIF) exchanged public jabs on Monday after the watchmaker said that it terminated its contract with the jeweler over a breach of contract.
The Swiss watch giant accused Tiffany of systematic efforts to block and delay development of the business.
Swatch and Tiffany Watch said they will press claims for damages against Tiffany to compensate for losses related to the early closure of the business. The partnership was supposed to last 20 years.
Tiffany responded to the claim by blaming Swatch for disobeying the terms of their three-year old agreement. The retailer accused Swatch of failing to provide appropriate distribution for Tiffany-brand watches.
Our current business forecasts do not include any meaningful increase in watch sales or royalty income, Tiffany said in a statement.
Swatch, which formed Tiffany Watch in spring 2008 to develop and distribute Tiffany branded watches, said the watch subsidiary will be permitted to wind down the current business over a two-year period following the effective termination of the contract.
Over the last three years, Tiffany has said that the Swatch business represents less than 1% of total sales.