Tiffany and Company is making plans to rebuild its watch business. Tiffany says that it sees a great deal of potential in the industry. They plan to build their watchmaking business back up as soon as the spat with Swatch Group SA is over. According to a report from Reuters, the two companies were once partners.
Optimistic About the Rebuild
Several decades ago, as much as nine percent of Tiffany and Co’s sales were from watches. That number, however, has fallen to only two percent recently. The Chief Executive Officer of Tiffany and Company, Michael Kowalski stated that he believes that number could once again soar once this dispute has been settled, according to the article by Reuters. While speaking at a retail conference for Goldman Sachs in New York, Kowalski stated, “We are working very diligently to imagine what our watch business might look like once our disagreements with the Swatch Group are behind us.”
In the 1980s the sales of watches had reached an all-time high for the brand. Timepieces made up 8-9% of all sales at the time. Kowalski, however, admitted that the sales diminished as Tiffany began to focus more on the engagement ring and jewellery business. The CEO stated that although the sale of watches might never become 50% of the business, offering timepieces is a fantastic opportunity for the brand.
Tiffany Jewellery Gets Its Start
Tiffany and Company was founded by Charles Lewis Tiffany and Teddy Young in 1837 in New York. The two men first opened the business as a “stationery and fancy goods emporium.” It first operated in Manhattan under the name “Tiffany, Young, and Ellis,”. They changed the name to Tiffany and Company when Charles Tiffany took over in 1853. Although many stores in the 1830s did not post prices because they were negotiable, that was not the case at Tiffany’s jewellery store. The prices were marked very clearly and indicated that there would be no haggling over them. Tiffany’s also offered no credit, unlike other stores, and only accepted cash.
Tiffany’s main store has been located in Manhattan at the corner of Fifth Avenue and 57th Street since the 1940s. The store has become a landmark due to being the location of a number of films, most famous of which Breakfast and Tiffany’s starring Audrey Hepburn. Since then, Tiffany and Company has expanded to major cities all over the world. The brand now operates sixty-four locations in the United States alone. It also boasts one hundred and three international locations.
The Issues With Swatch
Tiffany’s and Swatch, a Swiss watchmaker, joined forces in 2007 to develop, manufacture, and sell watches with the Tiffany brand name. Although the arrangement was supposed to be a twenty-year venture the deal was ended in 2011. Both companies have sued each other over the failed project. The case is expected to go to arbitration in the fall. Swatch claims that Tiffany both blocked and delayed the development of watch sales. On the other hand, Tiffany jewellery maintains that Swatch failed to honour the terms of their agreement. Amongst these was a provision that Swatch provides adequate distribution.
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