Swatch Group executives earlier this year were planning to sell some of the Swiss conglomerate’s higher-end watches through Amazon.com Inc.
Continue Reading Below
But after months of talks, the two companies hit a wall. Swatch, whose brands include Longines, Omega and Blancpain, demanded a commitment that Amazon proactively police its site for counterfeits and unauthorized retailers. Amazon refused, according to Swatch Chief Executive Nick Hayek, putting a deal between the two on ice.
“We add value to them,” Mr. Hayek said. “But they should also add value to the brand.”
Amazon declined to comment on Swatch.
Amazon is courting companies across the retail spectrum, but one sector is still mostly holding out: the world’s club of luxury brands. Swatch and other high-end retailers say Amazon’s online marketplace undermines the strict control they say is key to maintaining a sense of exclusivity — and keeping prices high. While some makers of luxury products have decided to join Amazon, many of the industry’s biggest players — including Swatch, Gucci owner Kering, luxury-watch maker Cie. Financière Richemont SA and LVMH Moët Hennessy Louis Vuitton SE — are staying away for now.
The absence of high-end products has hampered Amazon’s push to be a force in the fashion industry, despite years of working to expand the merchandise it sells officially though its website. Adding luxury goods would help Amazon boost margins and build loyalty among customers of Amazon Prime, its premium service favored by higher-income shoppers that offers faster delivery and other perks, according to former executives familiar with the company’s shopper base.