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Tiffany & Co ordered to pay Swatch over failed venture | Tiffany & Co ordered to pay Swatch over failed venture |
(about 3 hours later) | |
The Tiffany & Co jewellery chain has been ordered to pay Swatch Group $448m (£274m) over a failed joint venture. | The Tiffany & Co jewellery chain has been ordered to pay Swatch Group $448m (£274m) over a failed joint venture. |
The chain said it was "shocked and extremely disappointed" with the decision and cut its full year earnings on the news. | The chain said it was "shocked and extremely disappointed" with the decision and cut its full year earnings on the news. |
Swatch, which is the world's biggest watchmaker, struck a deal in 2007 with Tiffany to make watches together under the Tiffany brand. | Swatch, which is the world's biggest watchmaker, struck a deal in 2007 with Tiffany to make watches together under the Tiffany brand. |
But a dispute started in 2011 when Swatch cancelled the cooperation. | But a dispute started in 2011 when Swatch cancelled the cooperation. |
The Swiss watchmaker said at the time that Tiffany had been trying to block and delay the venture, which was called Tiffany Watch Co. | The Swiss watchmaker said at the time that Tiffany had been trying to block and delay the venture, which was called Tiffany Watch Co. |
'Own watches' | |
"We were shocked and extremely disappointed with the decision of the majority of the arbitral panel," said Tiffany chief executive Michael Kowalski, in a statement. | |
The joint venture would have been a 20-year agreement for Swatch to sell watches under the new brand in Tiffany's own shops as well as other high-end outlets. | |
The two companies would have shared profits. | |
Tiffany, which has its headquarters in New York, faced Swatch in an arbitration court in the Netherlands, where the joint venture was based. | Tiffany, which has its headquarters in New York, faced Swatch in an arbitration court in the Netherlands, where the joint venture was based. |
The court has also required that Tiffany pay about $9m to cover Swatch's legal fees. | |
Tiffany said the decision would not impact its ability to realise its existing business plans in the short or long term and that it would review its legal options. | Tiffany said the decision would not impact its ability to realise its existing business plans in the short or long term and that it would review its legal options. |
Shares in Swatch closed up 1.1% on Friday worth 581.50 Swiss francs. Its shares are up about 26% this year. |
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