Tiffany Was Awarded A Compensation Of Swatch4 Billion Francs.

Last Saturday, the Holland Arbitration Association decided on the cooperation dispute between Tiffany&Co. (NYSE:TIF) and the world's largest watch maker SwatchGroupAG (URH.VX) Swatch group. Tiffany&Co. (NYSE:TIF) had to pay 402 million Swiss francs (about US $449 million 500 thousand) damages to SwatchGroupAG (URH.VX) Swatch group, which was even more than the total profit of Tiffany&Co. (NYSE:TIF) in the 2012 fiscal year, 416 million US dollars.

Tiffany&Co. (NYSE:TIF) chairman and chief executive officer of the board MichaelKowalski Shocked and disappointed at the verdict: "we firmly believe that the ruling of the jury is not based on facts." He disclosed that he was consulting with the lawyers team about future actions and pointed out that the group had sufficient financial resources to pay compensation, and that the group's ability to implement the business plan would not be affected.

SwatchGroupAG (URH.VX) Swatch group spokesman BeatriceHowald declined to comment on whether Tiffany&Co. could appeal, but she revealed. Tiffany &Co. (NYSE:TIF) needs immediate compensation and pays the penalty interest from July 2012 to date.

ExaneBNPParibas analytical LucaSolca told Bloomberg that the ruling was good news for SwatchGroupAG (URH.VX) Swatch group.

SwatchGroupAG (URH.VX) Swatch group in 2007 and Tiffany&Co. (NYSE:TIF) agreement formed a 20 year strategic alliance to promote the production, design and promotion of Tiffany&Co. (NYSE:TIF) brand luxury watches. However, the alliance has never entered the actual operation and cooperation has been declared broken, and the two sides concluded their partnership in 2011.

　　 Swatch GroupAG (URH.VX) Swatch group submitted arbitration in Holland in December 2011. SwatchGroupAG (URH.VX) Swatch group accused Tiffany&Co. (NYSE:TIF) of "systematically preventing and postponing the development of business", breaking the contract content and therefore claiming 3 billion 800 million Swiss francs (about US $4 billion 200 million). In March 2012, Tiffany&Co. (NYSE:TIF) counterclaim SwatchGroupAG (URH.VX) Swatch group "did not provide a suitable distribution channel for Tiffany&Co. brand watches", asking the latter to compensate the loss of 541 million 900 thousand Swiss francs.

The counterclaim of Tiffany&Co. (NYSE:TIF) has been rejected and the arbitration fee of 2/3 should be paid on the basis of 402 million Swiss Franc damages. That is, $8 million 800 thousand. Tiffany&Co. (NYSE:TIF) will spend an additional $2.95-3.05 billion in the fourth quarter of this fiscal year, reducing its earnings per share by 60%, or 2.30-2.35 dollars. Wall Street analysts predict Tiffany&Co. (NYSE:TIF) earnings per share will be between 3.65-3.75 dollars in the fourth quarter.

At the time of the deadline, Tiffany&Co. (NYSE:TIF) shares fell 1.77% to 89.02 dollars in the pre trading session in December 23rd, up 58% this year, while SwatchGroupAG (URH.VX) rose 0.60% to 585 Swiss francs, up 26.84% this year.