PARAMUS, NJ-In an effort to streamline its business, locallybased Movado Retail Group will close its retail boutique divisionand focus on its wholesale model, the company announced along withits first-quarter fiscal 2011 results yesterday.

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The stores, scheduled to close by June 30, include New Jerseylocations at the Pier Shop at Caesars in Atlantic City, the Shopsat Riverside in Hackensack and the Mall at Short Hills. The companywill continue to operate its flagship at Rockefeller Center in NewYork as well as its 31 outlet stores. The company said it doesn'tintend to run any store closing or liquidation sales, a move toprotect its brand name.

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The move is one that Movado is taking to improve its overallprofitability, redirecting investment toward what it believes arehigher-return businesses. The company said it expects to increaseits market share by expanding relationships with existingwholesaler customers and by enhancing its relationships withindependent retailers.

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Though shifting its focus to a wholesale model, Movado RetailGroup will continue to sell all of the company's watch brandsdirectly to consumers through its 31 outlet stores. It will alsokeep the Movado boutique located in New York City's RockefellerCenter open as a flagship store.

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Movado Group president and COO Rick Cote said the decision toclose the retail boutique division came after several years ofunprofitability and a strategic review of the business. In fact,the retail division was losing an average of $10 million a year andwas expected to lose $7 million in fiscal 2011, he said, addingthat the stores, which average 2,200 square feet, are too big to beprofitable in the current economic environment.

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The company said it anticipates that closing the retail boutiquedivision will lower annual revenues by approximately $30 million,but will immediately improve profitability for the 2011 fiscal yearon an adjusted basis. In addition, Movado said it believes the movewill have a favorable impact on the multi-year profitability andcash flow plan that it expects to present later this year.

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As for Movado Group's first quarter results, the companyrevealed that adjusted net loss for the period ended April 30,2010, was $4.8 million, or $0.19 per diluted share. Top-line growthfor the quarter was reported at 25%, excluding sales of excessdiscontinued product for the previous year. Net sales for thequarter increased 16.7% to $78.9 million, primarily driven by anincrease in consumer demand and a return to normalized buying andinventory replenishment patterns among retailers, the company said.Movado reported gross profits of $44.2 million, or 56% of sales forthe quarter, while operating expenses increased $5.5 million, or11.4%.

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