Movado is shutting the doors on its money-losing U.S. retail boutiques on June 30th. The retail boutiques, which opened in 1998, sell clocks, watches, jewelry, leather goods, pens, and accessories. But while they accounted for $30 million in annual revenue, they lost $10 annually.
The Swiss watchmaker will maintain its New York flagship and 31 outlet stores, and focus on selling its watch products through wholesalers and independent retailers.
A recent report by the Gerson Lehrman Group titled "Movado (MOV) Struggles to Find Its Place In a Changing Market Place" sees plenty of troubling signs on the horizon for the brand:
Today Movado is a lot more or less, depending on how you envision it. For example, the company is primarily a branded watch company with one strategic brand, Movado. Like its competing brands, Gucci, Baume Mercier, Cartier, Choppard. Ebel, Philippe Charriol, and Kenneth Cole to name a few, Movado has to struggle to find its voice in a highly competitive, oversaturated market place.
Unfortunately, the company took its eye off the ball when it invested in retail and outlet stores, as well as, marketing non-franchise building alternative brands. Now, it should be now be apparent to Movado’s management that the brand doesn’t have the cache’ to be extended to either fashion accessories or jewelry. But that doesn’t really help going forward.
What’s next? Reinvent Movado again. After all, the brand was all but dead when North American acquired it. Now it the midst of dozens of competing, often better capitalized brands, Movado is faced with what to do with a brand that is too expensive to have mass appeal and not prestigious enough to compete head on with the high end luxury brands.