ZURICH (Reuters) - Jeweler Tiffany & Co (TIF.N) has filed a $590 million counter-claim against Swatch Group SA UHR.VX, the Swiss watchmaker said on Monday, the latest volley in the companies’ feud over a failed deal to sell watches together.
Tiffany’s claim for 542 million Swiss francs in a Dutch arbitration court comes three months after Swatch, the world’s largest watchmaker, sued it for lost profits it estimated at 3.8 billion francs ($4.2 billion). The companies ended their deal in September.
In a statement on Monday, Swatch said Tiffany’s claim “has no factual or legal basis” and it will contest it “vigorously.” Tiffany did not return a request for comment.
The strategic alliance, signed in 2007 and intended to last for 20 years, was meant to boost the development, production and worldwide distribution of Tiffany branded watches, but it never turned into big business for either company.
According to Tiffany’s most recent annual report, the deal with Swatch represented less than 1 percent of sales.
Swatch has accused its former partner of systematically trying to block and delay development of the business and not giving the watches, marketed under the Tiffany brand, enough prominence in its stores.
Tiffany in turn has said that Swatch did not honor the terms of the agreement, including providing adequate distribution, and was unwilling to work cooperatively with the U.S.-based group.
Shares in Bienne, Switzerland-based Swatch were flat at 1406 GMT, while Tiffany shares were up 0.8 percent in morning trading in New York.
“The impact of this affair on numbers has not been that relevant, given that the Tiffany relationship was terminated when it was still in its very early stages,” analysts at UBS said in a note.
($1=0.9190 Swiss francs)
Additional reporting by Emma Thommasson and Phil Wahba; Editing by Greg Mahlich, David Holmes, Dave Zimmerman