By Brett Callwood, Benzinga Staff Writer

The alliance of luxury-goods producer Tiffany (TIF) and Swiss watchmaker Swatch looked, on the surface, like a match made in heaven. But the play-by-play reads like that of a failed marriage between a billionaire and a wealthy socialite.

Swatch needed a bit of a freshen up, and Tiffany's was happy to help in 2007. But scratching under the surface showed more than a little trouble in paradise. The main aim of the alliance was to develop, produce and globally distribute Tiffany brand watches. Swatch, of course, has plenty of experience in that area. Sadly, the wheels soon fell off the bus.

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Swatch is claiming $4.1 billion from Tiffany after the partnership dissolved last year. Tiffany isn't standing idly by; it's demanding $590 million from Swatch.

The partnership ended in September, according to Swatch, because of a breach of contract by Tiffany. The damages Swatch is seeking include a claim for lost profits. Over the next two years, Tiffany Watch Company will wind down its business.

Swatch also said that Tiffany blames it for failing appropriately distribute Tiffany brand watches. Swatch said it intends to fight the claims.

Still sounds like a celebrity divorce, doesn't it?

When the alliance was first signed and sealed, it was hailed as historic -- but never really took off as expected. Now, both companies will look elsewhere to expand their portfolios.

Tiffany recently unveiled a new collection, Rubedo, which features an alloy of silver, gold and copper in a rose-colored finish. The collection features price points ranging from $200 to $8,000, with initial pieces already being sold in select U.S. stores ahead of a March worldwide rollout.

"Our store checks suggest the line has been well received, especially pendants and necklaces priced from $275 to $1,250," analysts at Sterne Agee wrote in a recent report. "This new metal is lightweight but strong. The line offers a new interpretation of its 1837 collection and is inscribed with the signature of Tiffany's founder Charles Lewis Tiffany.”

In addition, Sterne Agee said that its research suggests this line appeals to a wide age range of consumers looking for something more modern and flashy than the typical piece of silver jewelry. "The addition of low-cost copper (about $0.25 per ounce) to the metal permits Tiffany to provide the jewelry at a lower price point."

So it would seem that Tiffany has moved on and found another love already.

Shares of Tiffany are trading near $69 -- almost unchanged on Monday's session. Within the last year, shares have traded as high as $83.82 and as low as $57.36. Shares up are up just over 15% from last March.

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