Articles and News

Court Rules Tiffany Must Pay Swatch $450 Million

Rotterdam, The Netherlands—The two-year battle between luxury retailer Tiffany and Swiss-based Swatch Group has ended with a Dutch arbitration panel ruling in favor of the watchmaker.

In late 2007, to great fanfare, the two companies announced a collaboration (called Tiffany Watch Co. Ltd.) to produce and distribute Tiffany branded watches. The watches were to be offered for sale at Tiffany stores, but also by Swatch Group and independent retailers. By 2011, however, the agreement had fallen apart, with both sides blaming the other for poor sales.

The agreement was initially terminated by Swatch in September 2011, claiming Tiffany was “blocking and delaying” development of the business, and it filed suit for breach of contract in December of that year. But in March 2012 Tiffany countersued, saying the Swatch-produced watches weren’t up to Tiffany product standards. At least one watch industry analyst believes there's enough blame to be shared.

On Sunday, the Netherlands Arbitration Institute ruled that Tiffany—not Swatch—is in breach of contract and must pay 402 million Swiss francs (US $450 million) to the watchmaker. The retailer, which in a statement said it was “shocked and disappointed” in the ruling, will cut its year-end forecast and plans to appeal, though it claims to have enough cash reserves to pay the fine.

Top image: A 2009 Tiffany Atlas chrono watch, one of the first created by the joint Tiffany-Swatch entity. Photo, Jewelry News Network

Three Industry Organizations Donate To Help Children

Merrick, NY—The Providence Jewelers Club (PJC), Israel Diamond Exchange (IDE), and Diamond Empowerment Fund (DEF) each have announced charitable donations at year’s end.

The Providence Jewelers Club donated $3,042.33 to Children’s Wishes of Rhode Island, which grants wishes to children in the state who are facing life-threatening medical conditions.

Meanwhile, in Ramat Gan, Israel, IDE is holding a fundraising drive at the diamond bourse there to benefit ILAN, the Israel Foundation for Handicapped Children. The drive coincides with ILAN's national campaign where, through cooperation with the Israel Ministry of Education, tens of thousands of elementary school pupils will be knocking on the doors of virtually every Israeli household to collect donations for the organization. 

"IDE's board and members are glad to continue their affiliation with this important charity," said IDE president Shmuel Schnitzer. "While the diamond industry's contribution to the Israel economy is of considerable significance, I believe that a highly visible industry like ours also needs to set an example in the realm of corporate and social responsibility (CSR). By embracing the cause of ILAN, we hope to contribute toward improving the lives of many handicapped children, for whom life is a daily struggle and who deserve our help in maintaining their personal dignity and quality of life.” 

ILAN assists thousands of physically impaired children and adults suffering from neuromuscular disorders such as infantile paralysis, cerebral palsy, and muscular dystrophy. Assistance is offered to anyone with physical disabilities, regardless of religious or secular affiliation.  

Finally, the Diamond Empowerment Fund announces a $175,000 grant has been made to its three beneficiary schools in Africa. Monies were divided evenly between Botswana Top Achievers, which provides the top high school students the opportunity to study at a university of their choice worldwide and then return to Botswana to contribute to its economic diversification and growth; African Leadership Academy, a university preparatory school in Johannesburg, South Africa, founded on the belief that ethical leadership is the key to sustainable development; and CIDA City Campus, South Africa’s first non-profit university offering a four-year business degree.

Phyllis Bergman, president of D.E.F’s board of directors, said of the grants, “The gift of education is the greatest gift of all.”