Costco’s Swatch Sales May Lead High Court to Limit Gray Market
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In the early 2000s, Costco Wholesale Corp. worked out a way to sell Seamaster watches made by Swatch Group AG’s Omega unit for a third less than the suggested retail price.
Costco found a distributor offering watches originally sold overseas, where Omega charged less than it did in the U.S. for its goods. The discount let Costco, the largest U.S. warehouse club, sell the watch for $1,299, compared with the $1,995 suggested retail price.