The Movado Group will reduce U.S. wholesale distribution of Movado, its largest watch brand, by 35 percent by Jan. 31, 2009, going from 4,000 stores down to 2,600, it announced in February.
The Movado Group, based in Paramus, N.J., designs, makes, and distributes Movado watches worldwide as well as Ebel, Concord, ESQ, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture, and Lacoste watches. It also operates 30 Movado boutiques and company stores in the United States.
The 1,400 outlets to be eliminated represent about $10 million of sales, which is less than 5 percent of overall brand revenue and 2 percent of the group’s consolidated revenue. The cutback affects only retailers of Movado watches, not the boutiques.
“Taking this decisive action now will allow us enhanced opportunities to generate strong sustained growth in the future,” says Efraim Grinberg, Movado Group president and chief executive officer. He adds that the new strategy was developed over the past year through analysis of the brand and customer research.
The Movado Group also changed preliminary fiscal 2008 sales estimates to $543 million, down from $560 million, because of the new brand strategy, a disappointing holiday season, and a weak economic environment, which it sees continuing into fiscal 2009. The company planned to announce final fourth-quarter and fiscal 2008 results on March 27.
It also said it anticipates 2009 full-year sales to range from $555 million to $565 million.