ESQ Wrist Watches

Movado Group, Inc. family of brands collectively competes in the watch industry's moderate through luxury price categories. The company's trade customers include department stores, jewelry store chains and independent jewelers, many of which sell more than one of Movado Group's brands. In addition, the company operates five retail boutiques.

Strength of Core Brands. Each of the company's core watch brands: Concord, Movado and ESQ remain strong with each brand's styling and advertising targeted at diverse consumer and price segments. Concord has received strong acceptance in the luxury market, offering a good value. The Movado line, which includes the widely recognized Museum Watch Dial, continues to appeal to sophisticated customers; while the moderately priced ESQ watch attracts younger consumers with an active lifestyle.

New Watch Brand Introductions. Movado Group has a strong history of success in launching new brands. The launch of the Coach brand has been described as the most exciting watch brand launch ever, with first year sales exceeding $16 million at wholesale. The company's ESQ line has remained strong since it was introduced in 1992 and the introduction of the Movado Vizio line was considered highly successful. The company has recently signed an exclusive license with the Tommy Hilfiger Corporation, to development and distribute a watch brand.

New Businesses. The company launched its Movado Boutique concept in 1998, with each store carrying exclusively-designed custom jewelry, tabletop accessories, home decorative objects, as well as watches. Additionally, Movado signed a license agreement with Linden Clocks, a leading maker, to develop, produce and distribute a line of Movado clocks, and a seperate agreement with Lantis Eyeware Corporation for the production and sale of Movado eyeware and sunglasses.

Marketing and Advertising Expertise. The company's innovative and targeted marketing campaigns have been instrumental in building and supporting new brands. Movado has plans to invigorate individual advertising campaigns for each brand during fiscal 2000. Approximately 19%-20% of total sales is committed to support the continued development of its brands.

Gross Margin Expansion. The company's strategic decision to generate a greater portion of its sales from manufactured brands versus distributed brands has resulted in improved gross margin levels. In fiscal 1999, the company's gross margin reached 59.8%, an improvement of 90 basis points over fiscal 1998.