Breo warns of watch sales dispute

BREO, the Dundee-based brand company which has taken the global watch market by storm, is involved in a legal dispute after changing its business model to sell direct to the travel industry.

The action is revealed as a post balance sheet event in the company’s latest accounts and is thought to refer to the company’s sales to airlines which are one of the biggest sellers of Breo watches.

The company said that following a strategic review of operations it had changed the way it sold its products and now directly supplies the global travel retail sector rather than through another party.

“Unavoidably this has resulted in the removal of the incumbent provider to the sector whom has subsequently raised an action against the company for breach of contract,” said the note to the accounts.

But the company added that it “strongly believes that this dispute will be satisfactorily resolved resulting in no material financial impact to the company”.

The identify of the company involved is not known and no-one from Breo was available for comment yesterday.

Breo was founded by former joiner Rob Morrison in 2008 to market a digital watch he had seen as a prototype in Dubai. The “Roam” first proved popular with runners and triathletes, and Morrison later won orders from online retailer Play.com and department store chain John Lewis.

In a further breakthrough, he persuaded airlines to stock the Roam in their onboard duty-free shops. Much cheaper than the products normally touted down aircraft aisles, the £10 watch proved a hit.

Breo has sold more than 4.5 million of the brightly coloured watches, allowing it to design a range of accessories around a similar fashion theme. The travel sector has seen strong growth and by the end of 2010 the company was selling to more than 50 airlines.

Last year the company said easyJet had been selling a Breo watch every two minutes while airlines in general were loading between eight and 20 watches per flight. The company’s three-year expansion to a turnover of around £8 million has been financed entirely from cash flow.