The long-standing engagement between Tiffany & Co and Damas International has been broken off following the Dubai company's delisting from the stock market.
Tiffany signs deal with Damas to take over UAE retail operations
The long-standing engagement between Tiffany & Co, the New York jeweller famous for its sparkly rings, and Damas International has been broken off following the Dubai company's delisting from the stock market.
All operations, marketing and sales functions for Tiffany in the Emirates will now be the responsibility of the brand itself, having previously been controlled by Damas, which was the wholesale distributor and operator of Tiffany stores.
The pair of jewellers have agreed to remain friends and signed a joint venture that will involve Damas International acting as a local partner and legal entity for the brand.
"This restructuring of our retail presence in the UAE through this joint venture with Damas allows us, for the first time, to wholly manage Tiffany's operational activities," said Laurent Cathala, Tiffany's vice president of emerging markets.
The Dubai jeweller was bought out last month and will be delisted from the Nasdaq Dubai after more than three quarters of shareholders agreed to a US$445 million (Dh1.63 billion) bid from a consortium of investors.
The offer was led by Mannai Corporation of Qatar and included the Egyptian investment bank EFG-Hermes and the Abdullah brothers Tawfique, Tawhid and Tamjid, the previous owners of Damas before it became a public company.
Tiffany has slowly been building its presence in the UAE, opening an office in Dubai last year, and last month it launched a new alloy made from a mix of copper, gold and silver, which it calls Rubedo, that will be used in pieces including necklaces, rings and pendants.
The New York jeweller plans to increase its sales fivefold over the next three years in the Middle East as it invests in new stores and products and spends millions on advertising.
"The [Damas] agreement is a significant milestone during the 175th anniversary year of Tiffany," said Mr Cathala. "It underscores the importance of the UAE market to our global expansion strategy and highlights our optimism about the long-term growth potential we see throughout the Middle East."
Globally, Tiffany's sales rose 18 per cent to US$3.6bn in the year ending on January 31, and net profit increased 19 per cent to $439m, compared with 2010.
Damas has had a tumultuous three years in which the jeweller was nearly brought to the brink of bankruptcy by the Abdullah brothers after they withdrew Dh600m in cash and gold from the company without shareholder approval. They still owe the money to the company, which has benefited from strong trading in the past 12 months on a resurgent jewellery and retail market in the UAE.
This robust performance and a restructuring of the company's debts led to interest in January from Mannai.
Under the joint venture with Tiffany, the new entity will be incorporated in the UAE as TCO Damas Associates.