Movado to Close Boutique Division

Movado Retail Group Inc., the retail subsidiary of Movado Group Inc. (Paramus, N.J.), plans to close its retail boutique division by the end of June, in an effort to streamline its business, redirect investment toward higher return businesses and improve the company's overall profitability.
 

The company will continue to sell its watch products primarily through its wholesale model and will try to increase its market share by further expanding relationships with existing wholesale customers and independent retailers. In addition, the division will continue to operate its 31 outlet stores, as well as the Movado Boutique flagship in New York's Rockefeller Center.

“Following several years of unprofitability and a strategic review of the business, we have decided to close our retail boutique division,” says Rick Cote, president and coo of Movado Group Inc. “We believe that this action will assist Movado Group to return U.S. operations to profitability.”

Cote adds that the company will continue to make strategic investments in its brands to capitalize on growth prospects, build market share and elevate its connection with consumers. “We believe in the strength of the Movado brand and the rest of our portfolio of iconic brands, and we expect these actions will solidify our position as a leader in the watch industry,” he says.

The company anticipates the boutique closing will lower annual revenues by approximately $30 million, but will lead to improved profitability for the 2011 fiscal year on an adjusted basis. “We are confident the closure of our retail boutiques is in the best long-term interests of our company and all of our stakeholders, and we look forward to focusing on new opportunities we see in our wholesale business,” says chairman and ceo Efraim Grinberg.

The company recently announced net sales rose 16.7 percent for the first quarter ended April 30, 2010, driven by growth in the U.S. and international wholesale categories.