Movado streamlines with expense-reduction plan

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Movado streamlines with expense-reduction plan

August 08, 2008

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Paramus, N.J.—Movado Group has implemented a new expense-reduction plan, which the company expects will save $25 million.

The plan is designed to streamline operations, reduce expenses and improve efficiencies across the company's global organization, the group announced in a media release on Thursday.

As part of the plan, Movado will reduce its payroll expense by approximately 10 percent, which represents about 90 currently filled positions, or 6 percent of the company's full-time workforce.

The payroll reductions are spread primarily across Movado's corporate and shared service departments, predominantly in its North American and European operations, the company said.

In streamlining its operations, Movado will consolidate geographical functions such as distribution, finance, administration and procurement.

In addition, savings are expected to come from reductions in discretionary expenses.

Of the $25 million pre-tax cost savings that Movado expects to realize, the company expects $6 million to be saved in fiscal 2009.

"Streamlining our organization is a difficult decision, because it impacts the people who have contributed to Movado Group," Efraim Grinberg, Movado Group president and chief executive officer, said in the release. "We are extremely grateful to each of our employees and are very proud of their many contributions to the company. 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 company has established a program to offer severance packages as well as out-placement support to employees directly affected by the payroll reduction.

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