| NEW YORK, Sept 6
NEW YORK, Sept 6 Tiffany & Co sees big
potential in its watch business and plans to build it back up
once its feud with one-time partner Swatch Group SA is
settled, the U.S. jeweler said on Thursday.
The company only gets about 2 percent of sales from watches
now, but Chief Executive Officer Michael Kowalski said at a
conference that the percentage could be much more over time and
even return to the 9 percent level of two decades ago.
"We are working very diligently to imagine what our watch
business might look like once our disagreements with the Swatch
Group are behind us," Kowalski said at a Goldman Sachs retail
conference in New York.
In 2007, the company formed a joint venture with Swiss
watchmaker Swatch to develop, produce and distribute
Tiffany-branded timepieces. The arrangement, intended to last
for 20 years, never turned into big business for either company,
and the deal ended a year ago.
The companies have sued one another in arbitration court in
the Netherlands, where their Tiffany Watch Co joint venture is
domiciled. The case goes to arbitration this autumn.
Kowalski said that in the late 1980s, watches made up 8
percent to 9 percent of Tiffany's sales. That shrank as the
company decided to focus more on its engagement jewelry
Watches will never be 50 percent of sales for Tiffany, but
the business is "a great opportunity for us," Kowalski said.
Swatch Group, the world's largest watchmaker, faulted
Tiffany for "systematic efforts to block and delay development
of the business." Tiffany in turn has said that Swatch did not
honor the terms of the agreement, including providing adequate