The Movado Group expects to streamline its Movado brand U.S. wholesale distribution by 35 percent—from 4,000 doors to approximately 2,600 doors—by Jan. 31, 2009, the company announced recently.

The closing of these least productive stores represents approximately $10 million of Movado brand sales, or less than 5 percent of the overall brand's revenue and less than 2 percent of Movado Group's consolidated revenue.

The company says it will continue to partner with retailers that it believes will support and enhance the Movado brand image and strategy.

This decision is part of the company's new unified strategy to leverage the strength of the Movado brand across all distribution channels by uniting the areas of product development, merchandising and marketing across the company's wholesale and retail channels. The company says it intends to optimize its wholesale distribution network and enhance the performance of its Movado boutiques to contribute to the brand's long-term growth.

"Managing our brand proactively, we believe there are significant opportunities to harness the power of Movado across all channels of distribution and to build on the aspirational nature of the brand," Movado President and Chief Executive Officer Efraim Grinberg said in a media release. "We developed this comprehensive strategy following a thorough analysis of our brand, our retail customers and our end-consumers. While we are cognizant of the economic environment in which we currently operate, we continue to take a long-term view of our business. We believe that by taking action now, it will allow us enhanced opportunities to generate strong sustained growth in the future."

The company has also updated its guidance for the year ended Jan. 31, 2008, based on its new brand strategy and the weak macroeconomic environment.

On a GAAP basis, Movado Group projects fiscal 2008 net sales will be approximately $559 million, which includes approximately $31 million of excess discontinued product sales. The company's updated sales guidance includes the effects of lower holiday replenishment sales and a one-time accrual of $15 million for product returns associated with the company's closing of certain wholesale doors.



The Movado Group plans to reduce its Movado brand U.S. wholesale distribution from 4,000 doors to about 2,600 doors by Jan. 31, 2009.

Excluding the aforementioned discontinued product sales and accrual for product returns, fiscal 2008 net sales are projected to be approximately $543 million, compared with the company's previous guidance for net sales of approximately $560 million.

Movado Group projects fiscal 2009 net sales will be in the range of $555 million to $565 million. This guidance reflects management's expectation of a continuing weak macroeconomic environment. It also includes an approximate $0.20 per fully diluted share negative impact related to expected wholesale door closings, certain expenses related to the company's ERP implementation and severance costs to be completed as part of the company's Movado brand strategy.

Movado Group Inc. designs, manufactures and distributes Movado, Ebel, Concord, ESQ, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture and Lacoste watches worldwide, and operates Movado boutiques and company stores in the United States.

Source: Nationaljeweler.com: www.nationaljeweler.com