Breakups can be ugly — and this one is no different.
Tiffany & Co. and The Swatch Group Ltd. traded barbs Monday after the Swiss watchmaker said it ended its three-year partnership to manufacture watches for the American luxury jeweler.
Swatch took the first jab, blaming Tiffany for “systematic efforts to block and delay the development of the business.” As a result, the company vowed to pursue a claim against Tiffany to recoup compensation for the loss of future business.
Nayla Hayek, president of Tiffany Watch & Co. and chairwoman of Swatch, told WWD that the damages requested would amount to a triple-digit figure in millions of Swiss francs.
The blockage “occurred in various domains, such as in the marketing, for example events, ads, etc.,” she said, noting that “due to the obstructions from Tiffany & Co., the development of the distribution did not live up to expectations.”
The American jeweler fired back in what is shaping up to be a he said, she said back-and-forth, denying that it neglected its obligations in the agreement.
“Since Tiffany & Co. and The Swatch Group Ltd. entered upon this venture more than three years ago it has become increasingly clear that Swatch is unwilling to honor the terms of our agreement, make the necessary commitments and work cooperatively to develop the business for Tiffany & Co. watches in the luxury space,” the retailer said. “Despite assurances to the contrary made in 2007, Swatch has failed to provide appropriate distribution for Tiffany & Co. brand watches, with the result that our current business forecasts do not include any meaningful increase in watch sales or royalty income. “
The New York-based luxe jeweler “insisted that Swatch honor its own obligations, particularly its obligation to respect Tiffany’s rights regarding brand-management and product design.”
It added that it was “confident that its position will be vindicated” in coming arbitration.
The partners unveiled a 20-year strategic alliance in 2007, and Swatch set up a new entity, Tiffany Watch Co. Ltd., to manufacture, design and market luxury watches through Tiffany stores, the Swatch Group and independent retailers.
At the time, Tiffany’s chairman and chief executive officer Michael Kowalski referred to the alliance as an “historic agreement,” adding that Swatch Group is “the best conceivable strategic partner for Tiffany’s long-planned reentry into watch distribution.” As part of the agreement, Tiffany said Swatch would support distribution with a significant marketing campaign. “Our advertising and that of the new watch company will be fully integrated and support a common objective,” Kowalski said.
“This agreement is a path-breaking strategic move,” added Nick Hayek Jr., ceo and president of the group management board of Swatch. “It allows without any financial capital transaction the maximum utilization of manufacturing and distribution resources of both partners.”
Fast-forward to 2011 and Swatch, which has a similar cooperation contract with Calvin Klein, said it is planning on winding down current business with Tiffany over the course of two years.
According to Tiffany’s most recent 10-K filing with the Securities and Exchange Commission, watches sold in Tiffany’s stores constituted 1 percent of net sales in both 2010 and 2009 and 2 percent in 2008.
In 2010, the jeweler amassed net sales of $3.06 billion, which constituted a 13.9 percent jump, versus sales of $2.71 billion in 2009.
Either way, Monday’s news didn’t seem to faze Wall Street. Tiffany saw its stock edge up 2 percent to $69.85 at the end of trading.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast