Shares of Movado Group Inc. fell 4.6 percent in trading Thursday following a 33.7 percent drop in second-quarter earnings.
Meanwhile, Movado said chairman Gedalio “Gerry” Grinberg will retire. His son, Efraim Grinberg, will succeed the elder Grinberg as chairman and continue as president and chief executive officer.
For the three months ended July 31, income dropped to $8.1 million, or 32 cents a share, from $12.3 million, or 45 cents, in the year-ago quarter. Sales fell by 7 percent to $129.7 million from $139.5 million. The company said that year-ago figures included $8.3 million of discontinued products, without which sales declined 1.1 percent.
For the six months, income fell 36 percent to $9.4 million, or 36 cents, from $14.7 million, or 54 cents, in the first half of last year. Sales slipped 4.1 percent to $231 million, from $240.8 million.
“While our second-quarter results reflect the continued challenging macroeconomic environment, the decisive actions we’ve taken to reduce expenses and improve productivity are designed to position our company to emerge quickly and even stronger than before as the economy recovers,” said Efraim Grinberg.
The ceo noted that Movado continues to gain market share due to product innovation and marketing and advertising investment across its brands.
The younger Grinberg, who joined the company in 1980, will become chairman in January at the end of fiscal 2009. Gerry Grinberg, 76, will remain on the board as founder and chairman emeritus.
The current chairman, who fled to Miami from Fidel Castro’s Cuba in the Sixties, started selling alarm clocks in Havana and soon moved into dealing more serious timepieces by the likes of Omega and Piaget. He helped propel the sales of luxury watches in the U.S. in a period when most people wore inexpensive, utilitarian Timex styles.
Grinberg founded the North American Watch Corp. in 1965, eventually adding Concord and Movado to its roster. The company went public in 1969 with approximately $5 million in annual sales. It later went private again. In 1993, the firm reentered the public market, and since then has grown from a $130 million business to the $560 million enterprise now known as Movado Group.
In 2003, Grinberg was the first recipient of the Lifetime Achievement Award from the Jewelry Information Center.
“I’m proud of all that our company has accomplished with the help of our employees and the confidence of our investors,” Grinberg said. “After establishing a $30 million-plus luxury watch business as a distributor in North America with two brands, our company strategically shifted its focus onto designing, manufacturing and distributing our own brands and as a licensee — acquiring Concord in 1970, reviving an icon of modernism in Movado, launching ESQ in 1993, expanding into the licensed watch category and, most recently, acquiring Ebel.”