PARIS — Swatch Group is lending its muscle to Tiffany & Co. in the New York jeweler's bid to grow its watch business worldwide.
The Swiss watch firm and Tiffany on Monday said they had sealed a 20-year strategic alliance that foresees the creation of a new Swiss-based company to manufacture, design and market luxury watches under the Tiffany name.
Swatch Group, whose stable of brands includes Breguet, Blancpain, Omega and Swatch, will own the new watch company. Tiffany will hold one of the five seats on the company's board, through which it will participate in before-tax profits and offer input on design and marketing.
"The alliance will place Tiffany & Co. within the distinguished collection of luxury watch brands manufactured and distributed by the Swatch Group," said Michael J. Kowalski, chairman and chief executive officer of Tiffany & Co.
Kowalski said discussions of the tie-up began more than a year ago. "Swatch Group is the best conceivable strategic partner for Tiffany's long-planned reentry into watch distribution," he said.
The deal is the latest alliance between an American brand and a major Swiss watch conglomerate. In March, Polo Ralph Lauren and Compagnie Financière Richemont — the owner of Cartier and Van Cleef & Arpels — formed a joint venture to create fine watches and jewelry under the Polo and Ralph Lauren brands.
Likewise, the deal reflects buoyancy in the luxury watch market and underscores a desire among brands to profit from growing demand generated by wealth creation and meteoric growth in fast-emerging markets such as the Far East and Russia.
"Tiffany & Co. is a true luxury brand with a long-standing heritage in watches," said Nick Hayek Jr., ceo and president of the group management board of Swatch Group. "We fully expect to see Tiffany & Co. strengthen its position among the best known and most respected watch brands in the world."
Watches have been underdeveloped at Tiffany, accounting for only 2 to 3 percent of the retailer's total sales, which were $2.6 billion last year. Recent attempts to energize the category include the redesign of the Mark and Atlas collections and the introduction of the Tiffany Grand line.The new deal should accelerate Tiffany's efforts. In April, for example, the company said it would operate a stand at the important watch fair in Basel, Switzerland. The company also revealed plans to wholesale its watches to broader distribution for the first time.
The new Swatch-operated company will produce a full line of Tiffany & Co. watches, all made in Switzerland, to compete with the likes of Cartier and Baume & Mercier. Distribution will be made through the Swatch Group network as well as Tiffany stores.
Equally, the deal allows Swatch Group to operate Tiffany watch stores in certain markets outside of the U.S. Those stores may offer "a targeted collection" of Tiffany jewelry, according to the alliance. Tiffany also plans to increase visibility through greater marketing and advertising campaigns.
"Our advertising and that of the new watch company will be fully integrated and support a common objective," said Kowalski.
"This deal is a pathbreaking strategic move [for Swatch Group]," added Hayek. "It allows, without any financial capital transaction, the maximum utilization of manufacturing and distribution resources of both partners."
The two companies plan to host a news conference in Tiffany's New York flagship on Wednesday to provide further details on the hookup.
Swatch, which operates some 160 production facilities in Switzerland, last year recorded sales of more than 5 billion Swiss francs, or $4.45 billion.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)