Swatch enjoys a millionaire breakfast from Tiffany. The Dutch arbitration institute agreed with the Swiss watch company, condemning the American jewelery brand to pay it a mind-boggling compensation: 448,79 million dollars.
The dispute refers to an agreement signed in 2008 between the two companies, which Tiffany violated by refusing to collaborate with Swatch and even hindering the project. At stake was the creation of a range of Tiffany-branded watches, which, however, was never produced. The Swiss company therefore exercised its right when it terminated the contract in 2011, and has now been awarded a maxi-compensation for the economic damages suffered between 2008 and 2011.
Swatch announced the decision of the Dutch court, specifying that the Court of the Netherlands (where the joint venture was based) rejected a counter-complaint filed by Tiffany in 2012. Michael Kowalski, CEO of the American company, said he was shocked and disappointed and said that the penalty that Tiffany will have to pay will have a significant impact on the accounts for the last quarter and for the whole of 2013.
Tiffany expects the penalty to cost $295-305 million to fourth quarter accounts and has cut its full-year earnings forecast from 3,65-3,75 to 2,30-2,35 as a result dollars per share.
