Step inside the nearly 21,000-square-foot suburban Chicago jewelry store with Editor-in-Chief Michelle Graff.
Movado Sales Down 53% in Q1
The watch company has reopened 14 stores in North America, which are performing better than expected, said CEO Efraim Grinberg.
Paramus, N.J.—Movado Group reported a double-digit decline in first quarter sales as the coronavirus pandemic closed its stores and hurt comps across both owned and licensed brands.
CEO Efraim Grinberg opened Tuesday morning’s earnings call by addressing the “senseless deaths” of George Floyd, Ahmaud Arbery, and Breonna Taylor.
Grinberg said the company has been “having the difficult discussions [with associates] surrounding race, diversity, inclusion, and the biases that exist within all of us” and recognizes it needs to do better.
Looking at its financial results, Grinberg said the year was progressing according to plan in February and early March, but by mid-March, the coronavirus pandemic forced the closure of most of its operations and retail stores.
In April, the company temporarily furloughed 80 percent of its North American workforce, approximately 850 employees, and temporarily reduced the work rate of its international employees.
Net sales in the first quarter fell 53 percent to $69.7 million, compared with $146.5 million a year ago.
Sales declined across all segments, including owned brands, licensed brands, and company stores, said CFO Sallie DeMarsilis on the call, adding sales were down in the U.S. and internationally.
Grinberg said he was encouraged by the strength of its online business, pointing to Movado and Olivia Burton as brands performing especially well in key markets while MVMT also saw improvement.
“Although ecommerce sales were strong, they were not nearly enough to offset the declines in our wholesale and company stores businesses,” said DeMarsilis.
China, which saw strong e-commerce sales as well, has begun to reopen its stores.
In North America, 14 out of 47 locations have reopened with 41 expected to be open by June 17.
The 14 stores currently open have performed better than expected, said Grinberg, adding that sales at these stores were down 11 percent compared with the same period last year.
“I actually think that this pandemic has kind of, to a certain extent, really fortified the need for a certain amount of brick and mortar centers, and especially outdoor ones, so we’re seeing that consumers like to shop and they’re coming to our stores and shopping at a pretty high level,” said Grinberg.
While traffic is down about 40 percent at those stores, he said, there are higher conversion rates and higher average transactions.
Looking to the year ahead, DeMarsilis said the company would not be providing specific fiscal guidance, but expects its second quarter to be “significantly impacted by the crisis.”
“Although
The company also borrowed an additional $30 million under its credit agreement to bolster its financial flexibility, she said.
Movado has slowed the inflow of inventory into its warehouses and reduced its capital expenditures with the exception of projects with short-term return on investments, including select digital initiatives.
The company’s quarterly dividend has been discontinued and its share repurchase program has been suspended until further notice.
Movado also announced organizational changes Tuesday, effective immediately, in an effort to streamline the company and accelerate its digital initiatives.
Behzad Soltani, the current president of direct to consumer and chief digital officer, has been promoted to executive vice president, commercial president, and chief technology officer.
Soltani will oversee the company’s global wholesale business, company stores, e-commerce, and digital center.
Current CFO DeMarsilis has been promoted to executive vice president and chief operating officer, while still maintaining her role as CFO.
DeMarsilis will be responsible for finance and accounting, value chain, distribution, and business controls.
Grinberg said the new management structure will help unify the company’s distribution channels.
The Latest
These punk-inspired earrings from the new Canadian brand’s debut collection reveal the alter ego of the classic pearl.
The company brings its nanotechnology to two new fancy cuts for diamonds that feature its signature color and brilliance.
From protecting customer data to safeguarding inventory records, it's crucial to learn how to tackle cybersecurity challenges.
Sponsored by Tasha R
Three Titanic survivors presented him with the personalized Tiffany & Co. timepiece about a year after the tragedy.
A federal court found that the jewelry store chain violated terms of the settlement reached after it was accused of defrauding customers.
This fall, sharpen your skills in jewelry grading, quality control and diamond assessment.
Cynthia Erivo chose Dreams of Hope, an organization dedicated to empowering LGBTQA+ youth, as the charity for this year’s collection.
The new space was designed to evoke a warm, inviting vibe.
Kinney, who spent nearly 30 years at IJO, has been hired to head Abbott Jewelry Systems’ new virtual marketplace.
The auction house was accused of helping clients avoid paying taxes on millions of dollars’ worth of art purchased from 2010 to 2020.
The four finalists will present their pieces at the 2025 JCK Las Vegas show.
The “Camera Oscura” collection showcases earring designs celebrating female Surrealist artists Claude Cahun and Leonor Fini.
The money will fund the planting of 10,000 trees in critical areas across Oregon, Arizona, Montana, and other regions.
The event centered on advancing jewelry manufacturing technology will return to Detroit in May 2025.
Local reports identified the woman as the wife of the jewelry store owner.
A collection of pieces owned by Ferdinand I, the first king of modern Bulgaria, and his family, blew away estimates in Geneva last week.
The Australian jewelry box brand’s new West Village store will showcase new jewelers each month through its Designer in Residence program.
“Lovechild” was created in partnership with Carolyn Rafaelian’s Metal Alchemist brand.
Hampton discussed how Helzberg is improving the customer experience and why it was inspired by the company formerly known as Dunkin’ Donuts.
The group will host several curated events and an exhibition of designer jewelry made with Peruvian gold traceable to the miners’ names.
The collection honors the 50th anniversary of Dolly Parton’s “Love is Like a Butterfly” song, which shares a birth year with Kendra Scott.
This year’s theme asks designers to take inspiration from classic fairy tales.
Senior Editor Lenore Fedow makes the case for why more jewelers should be appealing to nerds at the annual event.
The latest “Raiz’in” drop showcases a newly designed “Scapular” necklace and donates a portion of the proceeds to Make-A-Wish France.
No. 1 out of 100, the timepiece was created to mark Citizen’s 100th anniversary and will be auctioned off at Sotheby’s next month.