NEW YORK — Watchmaker Movado Group Inc. said Thursday it will cut 90 jobs in an effort to reduce expenses and meet its fiscal 2009 guidance. The cuts, which represent 6 percent of Movado’s staff, will take place immediately and are expected to generate roughly $25 million in pretax annualized cost savings for the New Jersey–based company.
“Streamlining our organization is a difficult decision, because it impacts the people who have contributed to Movado Group,” said Efraim Grinberg, president and CEO. “However, we recognize that it is necessary to make decisions that not only respond to the current challenging economic environment, but that will also strengthen Movado Group for the long-term.”
The payroll reductions will affect Movado’s corporate and shared service departments in North America and Europe. The company, which designs, sources and distributes watches under the Movado, Ebel, Concord, Coach and Tommy Hilfiger brands among others, will also consolidate distribution, finance, administration and procurement—a move which Movado executives expect to generate $6 million in additional savings in fiscal 2009.
“A streamlined cost structure will allow the company to be more nimble as it responds to current market conditions while capitalizing on future growth prospects as the economy recovers,” said Grinberg, who added that there are significant opportunities ahead for the company. “Our solid balance sheet and financial flexibility enable us to continue to invest in our business and execute our strategic initiatives.”
Excluding the charge and cost savings associated with Movado Group’s expense-reduction plan, the company is maintaining its fiscal 2009 diluted earnings-per-share guidance of approximately $1.65 to $1.72, based on a projected tax rate of 24 percent. Movado will announce its second quarter fiscal 2009 results in September 2008.