SEC Info - Movado Group Inc - ‘424B1’ on 10/21/97

SEC Info℠

Home

Help

Please Sign In

Movado Group Inc – ‘424B1’ on 10/21/97

As of: Tuesday, 10/21/97 · Accession #: 950123-97-8729 · File #: 333-35875

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/21/97  Movado Group Inc                  424B1                  1:219K                                   RR Donnelley/FA

Prospectus — Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Filed Pursuant to Rule 424(B)(1)                      69    382K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Available Information Business Business Strategy Capitalization Certain Transactions Certain U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock Common Stock Company, The Competition Description of Capital Stock Dividend Policy Domestic Executive Officers and Directors Experts Fiscal 1996 Fiscal 1997 General Incorporation of Certain Documents by Reference Index to Consolidated Financial Statements Industry Overview International Legal Matters Liquidity and Capital Resources Management Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales Notes to Consolidated Financial Statements Notice to Canadian Residents Offering, The Preferred Stock Price Range of Common Stock Principal and Selling Shareholders Prospectus Summary Report of Independent Accountants Resale Restrictions Risk Factors Sales and Distribution Selected Historical Financial Data Selling, general and administrative Shares Eligible for Future Sale Sources and Availability of Supplies Special Note Regarding Forward-Looking Statements The Company The Offering Total Trademarks and Licensing Agreements Underwriting Use of Proceeds
1	1st Page - Filing Submission
"	Common Stock
3	Prospectus Summary
"	The Company
4	The Offering
5	Selling, general and administrative
6	Risk Factors
"	Competition
10	Special Note Regarding Forward-Looking Statements
"	Use of Proceeds
11	Capitalization
12	Dividend Policy
"	Price Range of Common Stock
"	Fiscal 1996
"	Fiscal 1997
13	Selected Historical Financial Data
14	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	General
"	Net sales
17	Liquidity and Capital Resources
19	Business
"	Industry Overview
20	Business Strategy
23	Sales and Distribution
"	Domestic
24	International
"	Sources and Availability of Supplies
25	Trademarks and Licensing Agreements
28	Management
"	Executive Officers and Directors
30	Certain Transactions
31	Principal and Selling Shareholders
"	Total
34	Shares Eligible for Future Sale
"	Description of Capital Stock
35	Preferred Stock
37	Underwriting
38	Notice to Canadian Residents
"	Resale Restrictions
40	Certain U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock
43	Legal Matters
"	Experts
"	Available Information
"	Incorporation of Certain Documents by Reference
45	Index to Consolidated Financial Statements
46	Report of Independent Accountants
51	Notes to Consolidated Financial Statements

424B1 1st Page of 69 TOC ↑Top Previous Next ↓Bottom Just 1st
Filed Pursuant to Rule 424(b)(1)
Registration No. 333-35875

2,400,000 Shares

[Movado Group Logo]

Common Stock
($.01 par value)

------------------

Of the shares of common stock, par value $.01 per share (the "Common Stock"), of
Movado Group, Inc. ("Movado Group" or the "Company") offered hereby (the
"Offering"), 1,500,000 shares are being sold by the Company and 900,000 shares
are being sold by the Selling Shareholders named herein under "Principal and
Selling Shareholders." The Company will not receive any of the proceeds from the
sale of Common Stock by the Selling Shareholders. The Common Stock is listed on
the Nasdaq National Market under the Symbol "MOVA." On October 20, 1997, the
last reported sale price of the Common Stock on the Nasdaq National Market was
$22.25 per share. See "Price Range of Common Stock."

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 6
HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

[Enlarge/Download Table]

Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company(1) Shareholders
-------------- -------------- -------------- --------------

Per Share..................... $21.50 $1.10 $20.40 $20.40
Total(2)...................... $51,600,000 $2,640,000 $30,600,000 $18,360,000

(1) Before deduction of expenses payable by the Company estimated at $1,000,000.

(2) Certain Selling Shareholders have granted the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase a
maximum of 320,000 additional shares of Common Stock to cover
over-allotments of shares. If the option is exercised in full, the total
Price to Public will be $58,480,000, Underwriting Discounts and Commissions
will be $2,992,000, Proceeds to Company will be $30,600,000 and Proceeds to
Selling Shareholders will be $24,888,000.

The shares of Common Stock are offered by the several Underwriters when, as
and if delivered to and accepted by the Underwriters and subject to their right
to reject orders in whole or in part. It is expected that the shares of Common
Stock will be ready for delivery on or about October 24, 1997, against payment
in immediately available funds.

CREDIT SUISSE FIRST BOSTON
FURMAN SELZ
RODMAN & RENSHAW, INC.

Prospectus dated October 20, 1997.

424B1 2nd Page of 69 TOC 1st Previous Next ↓Bottom Just 2nd

[PHOTOGRAPHS OF THE COMPANY'S ADVERTISING]

------------------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS, PENALTY BIDS AND PASSIVE MARKET MAKING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

424B1 3rd Page of 69 TOC 1st Previous Next ↓Bottom Just 3rd

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the consolidated
financial statements of the Company and the related notes thereto (the
"Consolidated Financial Statements") included elsewhere in this Prospectus and
in the documents incorporated herein by reference. Unless otherwise indicated,
the information in this Prospectus: (i) assumes that the over-allotment option
granted to the Underwriters is not exercised and (ii) has been adjusted to give
effect to a three-for-two stock split effected by means of a dividend
distribution on September 29, 1997, as well as a five-for-four stock split
effected by means of a dividend distribution on May 1, 1997 (the "Stock
Splits"). Unless otherwise indicated, all references in this Prospectus to
"Movado Group" or the "Company" refer to Movado Group, Inc., a New York
corporation, and its predecessors and subsidiaries. References to "dollars" and
"$" are to United States dollars unless stated otherwise.

THE COMPANY

Movado Group is a leading designer, manufacturer and distributor of quality
watches with prominent brands in almost every price category comprising the
watch industry. The Company currently markets five distinctive brands of
watches, Movado, Concord, ESQ, Piaget and Corum, which compete in the Exclusive,
Luxury, Premium Branded and Moderate Branded categories of the watch market. In
the spring of 1998, the Company plans to introduce Coach watches as a new brand
under an exclusive worldwide license from Coach. The Company's watches, all of
which are manufactured with Swiss movements, have suggested retail prices
generally ranging from $125 to $50,000, although certain watches have suggested
retail prices in excess of $1,000,000. During the fiscal year ended January 31,
1997, sales in the United States and Canada accounted for approximately 82% of
the Company's net sales, with the balance generated internationally.

The Company designs and manufactures Movado and Concord watches primarily
in Switzerland, as well as in the United States, for sale throughout the world.
ESQ watches are manufactured to the Company's specifications by independent
contractors located in the Far East and are presently sold in the United States,
Canada and the Caribbean. In addition, Movado Group is the exclusive distributor
of Piaget and Corum watches in the United States, Canada, Central America and
the Caribbean. The Company's trade customers include department stores, jewelry
store chains and independent jewelers, many of which sell more than one of the
Company's watch brands. The Company also operates 18 retail stores, including a
Piaget boutique, a Movado store and 16 outlet stores.

The Company markets its watches through a direct sales force, both
domestically and internationally, of over 130 sales personnel, as well as
through a network of approximately 50 independent international distributors.
The Company's sales personnel generally specialize in one particular watch
brand, enhancing their ability to service the needs of the Company's trade
customers. The Company also operates 10 Company-owned service facilities and has
approximately 135 authorized independent service centers worldwide.

MOVADO(R), CONCORD(R) AND VIZIO(TM) ARE TRADEMARKS OF MOVADO GROUP.
PIAGET(R) AND CORUM(R) ARE TRADEMARKS OF MOVADO GROUP IN THE UNITED STATES. THE
COMPANY LICENSES ESQUIRE(R), ESQ(R) AND RELATED TRADEMARKS PURSUANT TO AN
AGREEMENT WITH THE HEARST CORPORATION. THE COMPANY LICENSES COACH(R) AND RELATED
TRADEMARKS PURSUANT TO AN AGREEMENT WITH COACH, A DIVISION OF SARA LEE
CORPORATION. SEE "BUSINESS -- TRADEMARKS AND LICENSING AGREEMENTS."

424B1 4th Page of 69 TOC 1st Previous Next ↓Bottom Just 4th

The Company believes that advertising is important to the successful
marketing of its watches and devotes significant resources to advertising.
During the fiscal year ended January 31, 1997, advertising expenditures totaled
approximately 18% of the Company's net sales. The Company maintains its own
in-house advertising department, which the Company believes results in
significant cost advantages and enables management to alter existing campaigns
or implement new campaigns quickly and efficiently. Advertising is developed
individually for each of the Company's watch brands and is directed primarily to
the ultimate consumer rather than to trade customers, with an emphasis on
developing and supporting brand recognition and conveying to the consumer the
appropriate image associated with each brand.

The Company is, and will continue to be, focused on providing consumers
with a wide variety of watches characterized by attractive styling, high quality
and good value. The Company intends to capitalize on the broad name recognition
of its watch brands and its substantial design, manufacturing, sales and
advertising experience in pursuing new opportunities in the watch business. The
Company's business strategy is designed to: (i) increase sales in those markets
where the Company has its strongest market positions, namely the United States,
Canada and the Caribbean, by continuing to build its brands through product
development, advertising, and sales and point-of-sale support; (ii) increase
international sales for the Movado and Concord brands through further investment
in brand advertising and product support in select international markets,
primarily Japan, Hong Kong, Taiwan, the Middle East and Switzerland; (iii)
introduce and develop the Coach watch brand, both domestically and
internationally, utilizing the Company's existing product development,
manufacturing, distribution, sales and advertising capabilities; and (iv) expand
the Movado brand into related product categories through the opening of Movado
retail boutiques.

The Company's executive offices are located at 125 Chubb Avenue, Lyndhurst,
New Jersey 07071, and its telephone number is (201) 460-4800.

THE OFFERING

[Enlarge/Download Table]

Common Stock Offered by:
The Company.................................... 1,500,000 shares
The Selling Shareholders....................... 900,000 shares
----------
Total.................................. 2,400,000 shares
==========
Capital Stock to be Outstanding after the
Offering(1)(2):
Common Stock................................... 8,914,591 shares
Class A Common Stock........................... 3,897,731 shares
-----------
Total.................................. 12,812,322 shares
===========
Voting Rights(2):
Common Stock................................... One vote per share
Class A Common Stock........................... 10 votes per share
Use of Proceeds.................................. The net proceeds to the Company will be
used for working capital and general
corporate purposes, including the
expansion of existing brands, introduction
of new brands, establishment of retail
boutiques, and other marketing,
advertising and distribution efforts. The
Company will not receive any proceeds from
the sale of Common Stock by the Selling
Shareholders. See "Use of Proceeds."
Nasdaq National Market ("NNM") Symbol............ MOVA

---------------
(1) Based on the number of shares outstanding at September 30, 1997. Excludes
1,156,125 shares of Common Stock issuable upon exercise of outstanding
options at September 30, 1997 (of which options for 378,600 shares were
exercisable) pursuant to the Company's 1996 Stock Incentive Plan.

(2) See "Description of Capital Stock."

424B1 5th Page of 69 TOC 1st Previous Next ↓Bottom Just 5th

SUMMARY HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The summary historical financial data of the Company set forth below as of
and for the fiscal years ended January 31, 1997, 1996 and 1995 have been derived
from the audited historical Consolidated Financial Statements of the Company
included elsewhere in this Prospectus. The summary historical financial
statements as of and for the six months ended July 31, 1997 and 1996 have been
derived from the unaudited interim Consolidated Financial Statements of the
Company included elsewhere in this Prospectus. The results of operations for the
six month period ended July 31, 1997 are not necessarily indicative of the
results that may be expected for the full year ending January 31, 1998. The
following data should be read in conjunction with, and are qualified by
reference to, "Selected Historical Financial Data" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

The Company's fiscal year ends on January 31 of each calendar year.
References in this Prospectus to "fiscal 1997," "fiscal 1996" and "fiscal 1995"
refer to the Company's fiscal years ended January 31, 1997, 1996 and 1995,
respectively.

[Enlarge/Download Table]

SIX MONTHS ENDED
FISCAL YEAR ENDED JANUARY 31, JULY 31,
------------------------------ -----------------
1997 1996 1995 1997 1996
-------- -------- -------- ------- -------

STATEMENT OF INCOME DATA:

Net sales..................................... $215,107 $185,867 $160,853 $91,912 $81,764

Cost of sales................................. 95,031 83,502 75,871 39,785 36,784

Selling, general and administrative
expenses.................................... 99,657 84,315 69,243 47,050 41,128
-------- -------- -------- ------- -------
Total expenses................................ 194,688 167,817 145,114 86,835 77,912

Operating income.............................. 20,419 18,050 15,739 5,077 3,852

Net interest expense.......................... 4,874 4,450 4,307 2,283 2,123
-------- -------- -------- ------- -------

Income from continuing operations before
income taxes................................ 15,545 13,600 11,432 2,794 1,729
Provision for (benefit from) income taxes..... 3,853 3,876 (2,512) 699 519
-------- -------- -------- ------- -------
Income from continuing operations............. $ 11,692 $ 9,724 $ 13,944 $ 2,095 $ 1,210
======== ======== ======== ======= =======

Income from continuing operations per common
share(1).................................... $ 1.04 $ 0.86 $ 1.24 $ 0.18 $ 0.11
======== ======== ======== ======= =======
Weighted average common shares
outstanding(1).............................. 11,273 11,263 11,250 11,688 11,264

[Enlarge/Download Table]

JULY 31,
1997
-----------
BALANCE SHEET DATA (END OF PERIOD):

Working capital................................................................... $ 119,974
Total assets...................................................................... 246,302
Long-term debt.................................................................... 40,000
Shareholders' equity.............................................................. 100,405

---------------
(1) Share and per share information have been adjusted to give effect to the
Stock Splits.

424B1 6th Page of 69 TOC 1st Previous Next ↓Bottom Just 6th

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered carefully before purchasing the
Common Stock offered hereby. This Prospectus contains forward-looking statements
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the risk
factors set forth below. See "Special Note Regarding Forward-Looking
Statements."

EFFECTS OF ECONOMIC CYCLES AND RETAIL INDUSTRY CONDITIONS

The Company's business is affected by economic cycles. Sales of certain
consumer goods and accessories, such as the Company's watches, tend to decline
during recessionary periods when disposable income is lower and consumers are
less willing to use available credit to make purchases. Any significant decline
in economic conditions or uncertainty regarding future economic prospects that
affect consumer spending habits could have a material adverse effect on the
Company's business and financial condition.

Movado Group, like many of its competitors, sells to department stores and
other major retailers. Significant financial difficulties experienced by
retailers that purchase the Company's products could have a material adverse
effect on the Company's business and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business -- Sales and Distribution."

COMPETITION

The markets for each of the Company's watch brands are highly competitive.
With the exception of Societe Suisse de Microelectronique et d'Horlogerie
("SMH"), a large Swiss-based competitor, no single company competes with the
Company across all of its brands. Certain companies, however, compete with
Movado Group with respect to one or more of its watch brands. Certain of these
companies have, and other companies that may enter the Company's markets in the
future may have, substantially greater financial, distribution, marketing and
advertising resources than Movado Group. The Company's future success will
depend, to a significant degree, upon its ability to compete effectively with
regard to, among other things, the style, quality, price, advertising, marketing
and distribution of its watch brands. See "Business -- Industry Overview" and
"Business -- Competition."

EFFECTS OF SEASONALITY OF BUSINESS ON SALES, INCOME AND BORROWING LEVELS

The Company's sales in the United States and Canada are traditionally
greater during the Christmas and holiday season and are significantly more
seasonal than its international sales. Consequently, the Company's net sales
historically have been higher during the second half of its fiscal year. During
each of the three most recent fiscal years, the second half of each year
accounted for approximately 62% of the Company's net sales. The amount of net
sales and operating income generated during the second half of each fiscal year
depends upon the general level of retail sales during the Christmas and holiday
season, as well as economic conditions and other factors beyond the Company's
control. Any substantial decrease in the Company's net sales during the second
half of its fiscal year would have a material adverse effect on the Company's
financial results for the fiscal year. Inventories and accounts receivable also
reflect this seasonality. Prior to the Christmas and holiday season, the Company
is often required to borrow funds to finance the build-up of inventory in
anticipation of the peak selling season and to support increased accounts
receivable balances. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS, FOREIGN EXCHANGE RATE
FLUCTUATIONS AND CERTAIN RAW MATERIALS

Approximately 18% of the Company's net sales during fiscal 1997 were
generated outside the United States and Canada. In addition, substantially all
of the Company's products (including related component parts) are

424B1 7th Page of 69 TOC 1st Previous Next ↓Bottom Just 7th

manufactured outside the United States, either in its Swiss manufacturing
facilities or through arrangements with independent foreign contractors.
Accordingly, the Company's business is subject to risks associated with
international operations, including foreign exchange rate fluctuations, import
or export controls and trade restrictions, the imposition of tariffs, political
and economic disruptions, shipping delays and supply interruptions.

A substantial portion of the Company's sales are invoiced in currencies
other than the Swiss franc while the costs associated with these sales are based
primarily in Swiss francs. These costs include the cost for component parts and
products purchased from the Company's Swiss subsidiaries, and from S.A. Ancienne
Fabrique Georges Piaget et Cie. ("Piaget Swiss"), Corum Ries, Bannwart et Cie.
("Corum Swiss") and other suppliers. The Company's gross margins may, therefore,
be materially adversely affected by significant exchange rate fluctuations
between the Swiss franc and other currencies. In addition, because the Company's
operations outside the United States are conducted primarily through several
foreign subsidiaries whose functional currency is not the United States dollar,
foreign exchange rate fluctuations directly impact the translated dollar value
of the foreign subsidiaries' balance sheets and results of operations as
reported in the Consolidated Financial Statements. Although the Company
historically has been able to hedge against all or a portion of these foreign
exchange rate exposures by utilizing forward exchange contracts, foreign
currency options and open market purchases to cover identifiable inventory
purchase commitments and equity invested in its international subsidiaries,
there can be no assurance that the Company will be able to continue to do so
successfully.

Gold is used as a raw material in the Company's manufacturing of certain of
its Concord and Movado watches. The Company generally anticipates its gold
requirements for six to 12 months and purchases gold in advance of these
production periods. Generally, fluctuations in gold prices have not had a
significant impact on the Company's cost of sales. In the event, however, that
management determines that material increases in gold prices will be of a
significant duration, the Company will attempt to pass through these cost
increases in the form of higher prices. The Company also attempts to pass
through price increases from Piaget Swiss and Corum Swiss as management deems
appropriate.

The Company's gross margins may be adversely affected to the extent that
the Company is unable to pass through price increases that result from increases
in product or production costs or the adverse effects of foreign exchange rate
fluctuations. In addition, if the Company increases its prices to reflect these
increased costs, demand for, and sales of, the Company's products could be
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- General."

DEPENDENCE ON KEY SUPPLIERS

A majority of the watch movements used in the Company's watches are
purchased from two suppliers. The Company obtains other watch components,
including cases, crystals, dials, bracelets and straps, from a number of
suppliers. The Company believes that comparable Swiss movements and other watch
components are available from other suppliers on comparable terms, and,
therefore, does not believe that its business is materially dependent on any one
supplier. There can be no assurance, however, that the establishment of
additional or replacement suppliers would not result in a temporary interruption
in the manufacturing and assembly of the Company's products. The Company does
not have long-term supply contracts with any of its component parts suppliers.
See "Business -- Sources and Availability of Supplies."

DEPENDENCE ON CERTAIN TRADEMARKS AND LICENSING AGREEMENTS

The Company's business is highly dependent upon its ownership or licensing
of certain trademarks used in its business. Movado Group owns the trademarks
MOVADO(R), CONCORD(R), VIZIO(TM) and related trademarks for watches in the
United States and numerous other countries. The Company licenses ESQUIRE(R),
ESQ(R) and related trademarks on an exclusive basis for use in connection with
the manufacture, distribution, advertising and sale of watches pursuant to an
agreement with The Hearst Corporation ("Hearst"). The current term of the
agreement with Hearst (the "Hearst License Agreement") expires on December 31,
2000, and the agreement is renewable at the Company's option through December
31, 2018. The Company licenses the trademark COACH(R) and related trademarks on
an exclusive basis for use in connection with the manufacture, distribution,
advertising

424B1 8th Page of 69 TOC 1st Previous Next ↓Bottom Just 8th

and sale of watches pursuant to an agreement with Coach, a division of Sara Lee
Corporation (the "Coach License Agreement"). Subject to meeting certain
performance goals, the Coach License Agreement expires 10 years after the
Company's initial sales of Coach watches to retail outlets not operated by
Coach. Such initial sales are expected to commence in the spring of 1998. The
Company owns the trademark PIAGET(R) for watches and jewelry and a number of
related trademarks for watches in the United States. The Company is required to
assign such trademarks to Piaget Swiss on December 31, 2009, upon the expiration
of the Company's distribution agreements with Piaget Swiss (the "Piaget
Distribution Agreements"). The Company also owns the trademark CORUM(R) and a
number of related trademarks for watches in the United States. The Company is
required to assign such trademarks to Corum Swiss on December 31, 2009 upon the
expiration of the Company's distribution agreement with Corum Swiss (the "Corum
Distribution Agreement"), unless earlier terminated by either party as of
December 30, 2002.

The Company actively seeks to protect and enforce its trademarks by working
with industry associations, anticounterfeiting organizations, private
investigators and law enforcement authorities, monitoring the enforcement of
certain exclusion orders received from the United States Customs Service
("Customs") and, when necessary, suing infringers of its trademarks.
Consequently, the Company is involved from time to time in litigation or other
proceedings to determine the enforceability, scope and validity of these rights.
The loss of the Company's rights with respect to certain of its trademarks would
have a material adverse effect on the Company's business. See
"Business -- Trademarks and Licensing Agreements."

DEPENDENCE ON KEY PERSONNEL

The Company's ability to maintain its competitive position is dependent
upon its ability to attract and retain highly qualified manufacturing, sales and
marketing personnel. There can be no assurance that the Company will be able to
recruit and retain such personnel. In addition, the Company is dependent upon
certain key management personnel, the loss of whose services could have an
adverse effect on the Company.

The Company does not maintain "key man" life insurance on any of its
personnel other than a $1.0 million insurance policy on Gedalio Grinberg, Chief
Executive Officer and Chairman of the Board of Directors of the Company, and a
$5.0 million insurance policy on Efraim Grinberg, President of the Company and a
member of the Board of Directors. See "Certain Transactions" and
"Management -- Executive Officers and Directors."

VOTING RIGHTS; EFFECTIVE CONTROL BY PRINCIPAL SHAREHOLDERS

The Company has two classes of common stock outstanding, Common Stock and
Class A Common Stock. On all matters with respect to which the Company's
shareholders have voting rights, each share of Common Stock is entitled to one
vote and each share of Class A Common Stock is entitled to 10 votes. Except as
required by law, the Common Stock and the Class A Common Stock vote together as
a single class. Upon completion of the Offering, the outstanding shares of
Common Stock, including those offered hereby, and the outstanding shares of
Class A Common Stock will have approximately 18.6% and 81.4%, respectively, of
the combined voting power of the outstanding capital stock of the Company.

Upon completion of the Offering, Gedalio Grinberg, together with his son
Efraim Grinberg (the "Principal Shareholders"), will beneficially own 3,180,824
shares of Class A Common Stock, which will constitute approximately 24.8% of the
Company's outstanding capital stock and approximately 66.4% of the combined
voting power of the outstanding capital stock. Shares of Class A Common Stock
may be converted into shares of Common Stock on a one-for-one basis at the
election of the holder and will automatically be converted into shares of Common
Stock upon transfer (except for certain permitted transfers). Any such
conversion of Class A Common Stock by shareholders other than the Principal
Shareholders will increase the voting power of the Principal Shareholders. As a
result of this ownership, the Principal Shareholders will have the ability to
elect all of the Company's directors and otherwise effectively control the
affairs of the Company, including the power to determine the outcome of all
fundamental corporate transactions. See "Principal and Selling Shareholders."
Certain provisions of the Company's Restated Certificate of Incorporation, as
amended (the "Restated Certificate of Incorporation"), Restated By-Laws (the
"Restated By-Laws") and the Amended and Restated Credit Agreement, dated as of
July 23, 1997, among the Company, The Chase Manhattan Bank, as agent, Fleet
Bank,

424B1 9th Page of 69 TOC 1st Previous Next ↓Bottom Just 9th

N.A., as coagent, and the other banks signatory thereto, as amended (the
"Restated Bank Credit Agreement"), could also have the effect of delaying or
preventing changes in the control or management of the Company. See "Description
of Capital Stock."

POSSIBLE ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE

Future sales of a substantial amount of shares by existing shareholders
could adversely affect the market price of the Common Stock. Immediately after
the Offering, the 2,400,000 shares of Common Stock offered hereby and the
remaining shares of the Company not held by "affiliates" will be available for
sale in the public market without restriction. Of the total outstanding shares
of capital stock upon completion of the Offering, 325,977 shares of Common Stock
and 3,182,784 shares of Class A Common Stock (325,977 shares and 2,862,784
shares, respectively, if the Underwriters' over-allotment option is exercised in
full) will be held by "affiliates," as that term is defined in the Securities
Act, and are therefore subject to the limitations of Rule 144 of the Securities
Act. The Company, its officers and directors, the Selling Shareholders and
certain other shareholders have agreed not to offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file or cause to be
filed with the Commission a registration statement under the Securities Act
relating to, any shares of the Common Stock or securities or other rights
convertible into or exchangeable or exercisable for any shares of Common Stock
or publicly disclose an intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation, for a period of 120 days after the date of this Prospectus.
Following such period, shares of Common Stock held by such shareholders that are
not "affiliates" of the Company will be freely tradeable without restriction
under the Securities Act.

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, or the availability of these shares for future sale,
will have on the market price of the Common Stock prevailing from time to time.
Sales of a substantial number of shares of Common Stock in the public market
following the Offering, or the perception that such sales could occur, could
adversely affect market prices for the Common Stock. See "Shares Eligible for
Future Sale."

424B1 10th Page of 69 TOC 1st Previous Next ↓Bottom Just 10th

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical information provided herein are
forward-looking statements and may contain information about financial results,
economic conditions, trends and known uncertainties. The forward-looking
statements contained herein are subject to certain risks and uncertainties that
could cause actual results to differ materially from those reflected in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, those discussed under "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," as
well as general economic and business conditions that may impact disposable
income of consumers, competitive products and pricing, seasonality, availability
of alternative sources of supply in the case of loss of any significant
supplier, the Company's dependence on key officers, ability to enforce
intellectual property rights, success of hedging strategies in respect of
foreign exchange rate fluctuations and the continued availability to the Company
of financing and credit on favorable terms.

Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflected management's analysis, judgment, belief or
expectation only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. In addition to the disclosure
contained herein, readers should carefully review any disclosure of risks and
uncertainties contained in other documents the Company files or has filed from
time to time with the Securities and Exchange Commission (the "Commission")
pursuant to the Exchange Act.

USE OF PROCEEDS

The net proceeds to the Company from the sale of Common Stock offered by
the Company (after deduction of the underwriting discounts and commissions and
estimated expenses of the Offering) are estimated to be approximately $29.6
million. The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Shareholders.

The Company intends to use the net proceeds of the Offering for working
capital and general corporate purposes, including the expansion of existing
brands, the introduction of new brands, establishment of retail boutiques, and
other marketing, advertising and distribution efforts. Pending such uses, the
net proceeds temporarily will be used to reduce outstanding borrowings under the
Restated Bank Credit Agreement, which provides for a revolving credit facility
of $90 million. As of October 17, 1997, $64 million of indebtedness under such
revolving credit facility was outstanding, bearing interest at a weighted
average rate of 6.42% per annum. Such indebtedness matures on various dates from
October 27, 1997 to November 26, 1997. The Company may also invest such net
proceeds in interest bearing accounts and short-term, interest bearing
securities.

424B1 11th Page of 69 TOC 1st Previous Next ↓Bottom Just 11th

CAPITALIZATION

The following table sets forth as of July 31, 1997: (i) the actual
capitalization of the Company and (ii) the capitalization of the Company as
adjusted to reflect the sale of 1,500,000 shares of Common Stock offered by the
Company in the Offering (after deduction of the underwriting discounts and
commissions and estimated expenses of the Offering), the temporary application
by the Company of the estimated net proceeds to repay amounts outstanding under
the Restated Bank Credit Agreement, and the conversion of 265,500 shares of
Class A Common Stock into Common Stock on September 30, 1997 and an additional
634,500 shares of Class A Common Stock to be converted into Common Stock upon
the sale of shares in the Offering by one of the Selling Shareholders. See "Use
of Proceeds." This table should be read in conjunction with the Consolidated
Financial Statements included elsewhere in this Prospectus.

[Enlarge/Download Table]

JULY 31, 1997
--------------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)

Short-term debt:
Loans payable to banks............................................ $ 47,605 $ 18,005
Current portion of 6.56% senior notes............................. 5,000 5,000
Long-term debt:
6.56% senior notes................................................ 35,000 35,000
Long-term bank loans.............................................. 5,000 5,000
------- -------
Total debt..................................................... 92,605 63,005
Shareholders' equity:
Preferred Stock, $0.01 par value: 5,000,000 shares authorized;
none issued.................................................... -- --
Common Stock, $0.01 par value: 20,000,000 shares authorized;
6,508,618 shares issued and outstanding, actual; 8,908,618
shares issued and outstanding, as adjusted..................... 65 89
Class A Common Stock, $0.01 par value: 10,000,000 shares
authorized; 4,810,495 shares issued and outstanding, actual;
3,910,495 shares issued and outstanding, as adjusted........... 48 39
Capital in excess of par value.................................... 34,451 64,036
Retained earnings................................................. 72,934 72,934
Cumulative translation adjustment................................. (6,965) (6,965)
Treasury Stock, 17,251 shares at cost............................. (128) (128)
------- -------
Total shareholders' equity..................................... 100,405 130,005
------- -------
Total capitalization...................................... $193,010 $ 193,010
======= =======

424B1 12th Page of 69 TOC 1st Previous Next ↓Bottom Just 12th

DIVIDEND POLICY

During the fiscal year ended January 31, 1997, the Board of Directors
approved four $0.016 per share quarterly cash dividends (restated for the Stock
Splits) to shareholders of record of the Common Stock and the Class A Common
Stock. For each of the quarters ended April 30, 1997, July 31, 1997 and October
31, 1997, the Board of Directors of the Company approved a $0.02 per share
quarterly cash dividend (restated for the Stock Splits) to shareholders of
record of the Common Stock and the Class A Common Stock. The declaration and
payment of future dividends, if any, will be made at the sole discretion of the
Board of Directors and will depend upon the Company's profitability, financial
condition, capital and surplus requirements, future prospects, terms of
indebtedness and other factors deemed relevant by the Board of Directors, as
well as upon the application of restrictions on dividends contained in the
Company's debt covenants. Currently, the Company's ability to pay dividends is
restricted under the Restated Bank Credit Agreement. The Company's ability to
pay dividends is also restricted under the Note Agreement, dated as of November
9, 1993, between the Company and The Prudential Insurance Company of America
(the "Note Agreement") governing the Company's 6.56% senior notes due 2005 (the
"Senior Notes"). See "Use of Proceeds" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

PRICE RANGE OF COMMON STOCK

The Common Stock is listed and traded on the NNM under the symbol "MOVA."
The following table sets forth on a per share basis the high and low sale prices
for the Common Stock for the fiscal quarters indicated as reported by the NNM
(restated for the Stock Splits).

[Enlarge/Download Table]

HIGH LOW
------ ------

FISCAL 1996
First Quarter............................................................ $ 7.66 $ 7.33
Second Quarter........................................................... 7.86 7.00
Third Quarter............................................................ 9.72 7.33
Fourth Quarter........................................................... 10.52 9.66

FISCAL 1997
First Quarter............................................................ $10.19 $ 9.06
Second Quarter........................................................... 11.99 9.06
Third Quarter............................................................ 14.25 9.20
Fourth Quarter........................................................... 15.18 11.85

FISCAL 1998
First Quarter............................................................ $13.59 $11.72
Second Quarter........................................................... 19.48 13.32
Third Quarter (through October 20, 1997)................................. 23.50 17.50

The last reported sale price of the Company's Common Stock on the NNM as of
a recent date is set forth on the cover page of this Prospectus.

As of September 30, 1997, there were approximately 540 record holders of
Common Stock.

The Class A Common Stock is not publicly traded and is subject to certain
restrictions on transfer as provided under the Restated Certificate of
Incorporation and consequently there is currently no established public trading
market for these shares.

424B1 13th Page of 69 TOC 1st Previous Next ↓Bottom Just 13th

SELECTED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The selected historical consolidated financial data of the Company set
forth below as of and for the five fiscal years ended January 31, 1997 have been
derived from the audited historical Consolidated Financial Statements of the
Company. The selected historical consolidated financial data as of and for the
six months ended July 31, 1997 and 1996 have been derived from the unaudited
interim Consolidated Financial Statements of the Company included elsewhere in
this Prospectus. The results of operations for the six month period ending July
31, 1997 are not necessarily indicative of the results that may be expected for
the full year ending January 31, 1998. The following data should be read in
conjunction with, and are qualified by reference to, the historical Consolidated
Financial Statements of the Company and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

[Enlarge/Download Table]

SIX MONTHS
FISCAL YEAR ENDED JANUARY 31, ENDED JULY 31,
-------------------------------------------------------- --------------------
1997 1996 1995 1994 1993 1997 1996
-------- -------- -------- -------- -------- -------- --------

STATEMENT OF INCOME DATA:
Net sales...................... $215,107 $185,867 $160,853 $142,237 $134,153 $ 91,912 $ 81,764
Cost of sales.................. 95,031 83,502 75,871 70,973 68,294 39,785 36,784
Selling, general and
administrative............... 99,657 84,315 69,243 56,993 53,331 47,050 41,128
-------- -------- -------- -------- -------- -------- --------
Total expenses................. 194,688 167,817 145,114 127,966 121,625 86,835 77,912
Operating income............... 20,419 18,050 15,739 14,271 12,528 5,077 3,852
Net interest expense........... 4,874 4,450 4,307 7,570 8,996 2,283 2,123
-------- -------- -------- -------- -------- -------- --------
Income from continuing
operations before income
taxes........................ 15,545 13,600 11,432 6,701 3,532 2,794 1,729
Provision for (benefit from)
income taxes................. 3,853 3,876 (2,512) (106) 207 699 519
-------- -------- -------- -------- -------- -------- --------
Income from continuing
operations................... $ 11,692 $ 9,724 $ 13,944 $ 6,807 $ 3,325 $ 2,095 $ 1,210
======== ======== ======== ======== ======== ======== ========
Net income(1).................. $ 11,692 $ 9,724 $ 13,944 $ 3,579 $ 3,325 $ 2,095 $ 1,210
======== ======== ======== ======== ======== ======== ========
Income from continuing
operations per common
share(2)..................... $ 1.04 $ 0.86 $ 1.24 $ 0.86 $ 0.53 $ 0.18 $ 0.11
======== ======== ======== ======== ======== ======== ========
Weighted average common shares
outstanding(2)............... 11,273 11,263 11,250 7,918 6,251 11,688 11,264
Cash dividends paid per common
share(2)..................... $ 0.064 $ 0.053 $ 0.043 $ 0.026 -- $ 0.040 $ 0.032
BALANCE SHEET DATA (END OF PERIOD):
Working capital................ $126,690 $132,679 $121,357 $108,612 $ 97,958 $119,974 $132,578
Total assets................... 208,443 200,380 186,949 156,954 144,075 246,302 227,590
Long-term debt................. 40,000 40,000 40,000 40,000 64,494 40,000 40,000
Shareholders' equity........... 103,870 104,841 92,930 72,458 35,776 100,405 107,770

---------------
(1) Includes in fiscal 1994 an extraordinary charge of $3.2 million ($0.41 per
share, restated for the Stock Splits) from the early redemption of $45
million aggregate stated principal amount of the Company's 12% subordinated
debentures.
(2) Share and per share information have been adjusted to give effect to the
Stock Splits.

424B1 14th Page of 69 TOC 1st Previous Next ↓Bottom Just 14th

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with "Selected
Historical Financial Data" and the Consolidated Financial Statements included
elsewhere in this Prospectus.

Certain statements under this caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" constitute "forward-looking
statements" under the Securities Act and the Exchange Act. See "Risk Factors"
and "Special Note Regarding Forward-Looking Statements."

GENERAL

Net Sales. Among the more significant factors that influence annual sales
are general economic conditions in the Company's domestic and international
markets, new product introductions, the level of advertising expenditures, the
effectiveness of marketing and distribution programs and product pricing
decisions.

Reported sales are also affected by foreign exchange rates, primarily the
U.S. dollar/Swiss franc rate, because significant portions of the Company's
international sales are billed in Swiss francs and translated to U.S. dollars at
average exchange rates for financial reporting purposes.

The Company's business is very seasonal. There are two major selling
seasons in the Company's North American markets: the spring season, which
includes school graduations and several holidays, and, most importantly, the
Christmas and holiday season. Major selling seasons in certain international
markets center around significant local holidays that occur in late winter or
early spring; however, because these markets are a less significant portion of
the Company's business, their impact is far less than that of the selling
seasons in North America.

The Company is continuing its efforts, begun in fiscal 1995, to expand
sales in key international markets. These efforts have included: the recruitment
of a number of key personnel with management level sales and marketing
responsibilities, the addition and replacement of selected independent
distributors, an increase in the number of sales representatives, retargeted and
increased advertising and coordinated marketing programs designed to build brand
awareness and consumer demand for the Company's watches at point-of-sale.

Gross Margins. The Company's overall gross margins are primarily affected
by four major factors: sales mix, product pricing strategy, component and labor
costs and the U.S. dollar/Swiss franc exchange rate. The Company's gross margins
on its manufactured brands are higher than those on its distributed brands and,
therefore, any shift in overall sales mix toward the Company's manufactured
brands will generally have a favorable impact on margins. In addition, margins
on sales of a particular brand vary from model to model and, therefore, changes
in the model sales mix within a brand will impact margins.

All of the Company's brands compete with a number of other brands on the
basis of not only styling but also wholesale and retail price. The Company's
ability to improve margins through price increases is, therefore, to some extent
constrained by competitor actions. The overall level of liquidation sales of
discontinued models in a particular fiscal year can also impact the Company's
gross margins.

Manufacturing costs of the Company's Movado and Concord brands consist
primarily of component costs, Company and subcontract assembly costs and unit
overhead costs.

The Company seeks to control and reduce component and subcontract labor
costs through a combination of negotiation with existing suppliers and
alternative sourcing. Overall wage and salary costs at the Company's
manufacturing operations in Switzerland are a function of production levels and
local inflation. These costs have remained fairly stable over the three previous
fiscal years.

Since a substantial amount of the Company's product costs are incurred in
Swiss francs, fluctuations in the U.S. dollar/Swiss franc exchange rate can
impact the Company's production costs and therefore its gross margins. The
Company, therefore, hedges its Swiss franc purchases using a combination of
forward contracts, purchased currency options and spot purchases. The Company's
hedging program has, in the recent past, been reasonably successful in
stabilizing product costs despite exchange rate fluctuations.

Operating Expenses. The Company's operating expenses consist primarily of
advertising, selling, distribution and general and administrative expenses.
Annual advertising expenditures are based principally on overall

424B1 15th Page of 69 TOC 1st Previous Next ↓Bottom Just 15th

strategic considerations relative to maintaining or increasing market share in
markets that management considers to be crucial to the Company's continued
success as well as on general economic conditions in the various marketplaces
around the world in which the Company sells its products.

Selling expenses consist primarily of sales commissions, sales force travel
costs and operating costs incurred in connection with the Company's retail
business. Sales commissions vary proportionally with overall sales levels.
Retail operating expenses consist primarily of salaries and store rent.

Distribution expenses consist primarily of salaries of distribution staff,
the cost of part-time help to meet seasonal needs, and shipping costs and
supplies.

General and administrative expenses consist primarily of salaries, employee
benefit plan costs, office rent, management information systems costs and
various other corporate expenses such as insurance, legal, internal audit and
credit and collection costs.

Operating expenses over the last three fiscal years reflect the effect of
the implementation of the Company's growth strategy. The more significant
expenses associated with this strategy included advertising and marketing
expenses designed to increase market share for the Piaget, Corum, Concord and
Movado brands, advertising and marketing costs for the continuing expansion of
the Company's ESQ line, which was introduced in 1993, additions to the Company's
sales force, salaries and rents associated with additional outlet stores and the
addition of staff to support distribution, inventory management and customer
service requirements coincident with growth of the Company's business.

Income Taxes. The Company's income tax provision for both fiscal 1997 and
1996 amounted to $3.9 million or 24.8% and 28.5% of pretax income, respectively.
A portion of the Company's consolidated operations are located in non-U.S.
jurisdictions and therefore the Company's effective rate differs from U.S.
statutory rates. The majority of the Company's non-U.S. operations are located
in jurisdictions with statutory rates below U.S. rates. The Company believes
that the future effective tax rate will range from 24% to 30%; however, there
can be no assurance of this as it is dependent on a number of factors, including
the mix of foreign to domestic earnings, local statutory tax rates and the
Company's ability to utilize net operating loss carryforwards in certain
jurisdictions.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996

Net Sales. Net sales increased 12.4% to $91.9 million from $81.8 million
for the six months ended July 31, 1997 and July 31, 1996, respectively. The
increase was attributable to a 10.0% increase in domestic sales and a 22.5%
increase in international sales. The growth of the domestic sales reflected
increases in the Company's Concord and Movado lines. The growth in international
sales related to growth in unit sales volumes for Concord and Movado in the
Middle East, Concord in the Far East, and Movado in the Caribbean. The growth in
both domestic and international sales reflected new product introductions in
fiscal 1997 and 1998 for Concord, with the introduction of the Veneto and
LaScala collections, and Movado, with the introduction of the Vizio collection.
The increase in sales was partially offset by decreases in sales of Piaget,
Corum and ESQ brands. The sales decrease in Piaget was due to a planned
reduction in points-of-sale in order to create greater exclusivity in the retail
channel of the brand. The decrease in ESQ sales compared to the prior year was
predominantly due to the expansion of the brand's retail network that occurred
during the first half of the prior fiscal year.

Gross Margins. Gross profit for the six months ended July 31, 1997 was
$52.1 million (56.7% of net sales) as compared to $45.0 million (55.0% of net
sales) for the comparable prior year period. Gross margin was favorably impacted
by sales mix, particularly an increase in the proportion of sales of the
Company's higher margin Concord and Movado brands to net sales. The Company's
margin also benefited from increases in the U.S. dollar against the Swiss franc,
which occurred late in the previous year.

Operating Expenses. Operating expenses increased 14.4% for the six months
ended July 31, 1997 to 51.2% of net sales from 50.3% of net sales for the
comparable prior year period. The increase in operating expenses occurred
primarily from planned increases in marketing and advertising, particularly in
the Company's Concord, Movado and ESQ brands. The increases in advertising and
marketing were partially offset by decreases in non-marketing related costs.

424B1 16th Page of 69 TOC 1st Previous Next ↓Bottom Just 16th

Interest Expense. Net interest expense, which consisted primarily of
interest on the Company's $40 million principal amount of Senior Notes and
borrowings against its working capital and revolving lines of credit, was $2.3
million for the six months ended July 31, 1997 as compared to $2.1 million for
the comparable prior year period. The higher interest expense was mainly due to
higher average borrowings for the six months ended July 31, 1997 as compared to
the comparable prior year period.

Income Taxes. The Company recorded a provision for income taxes of
$699,000 for the six months ended July 31, 1997 as compared to a provision of
$519,000 for the comparable prior year period. Taxes were provided at a 25%
effective rate which the Company believes will approximate the effective annual
rate for fiscal 1998; however, there can be no assurance of this as it is
dependent on a number of factors including: mix of foreign to domestic earnings,
local statutory tax rates and utilization of net operating losses. The 25%
effective rate differed from the U.S. statutory rate due to the mix of earnings
between the Company's U.S. and international operations, the most significant of
which are located in Switzerland. The Company's international operations are
generally subject to tax rates that are significantly lower than U.S. statutory
rates.

RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED JANUARY 31, 1997, 1996 AND 1995

Net Sales. Comparative net sales by product class were as follows:

[Enlarge/Download Table]

1997 1996 1995
-------- -------- --------
(IN THOUSANDS)

Concord, Movado and ESQ:
Domestic............................................. $138,810 $110,455 $ 94,635
International........................................ 30,185 28,504 27,437
Piaget and Corum....................................... 22,386 25,963 22,296
Other.................................................. 23,726 20,945 16,485
-------- -------- --------
$215,107 $185,867 $160,853
======== ======== ========

Net sales increased 15.7% in fiscal 1997. The increase resulted primarily
from growth in unit sales in the U.S. and, to a lesser extent, unit sales gains
in the Company's international business.

Increases in unit sales in the U.S. were attributable primarily to the
Concord, Movado and ESQ brands offset somewhat by a decline in unit sales of
Piaget. The increase in international unit sales was offset somewhat by the
negative impact of a change in foreign exchange rates.

Net sales increased 15.6% in fiscal 1996. The increase resulted primarily
from growth in unit sales volumes in the U.S., Canada, the Caribbean and certain
Far East markets offset somewhat by decreased unit sales in the Company's other
international markets. Increases in unit sales in North America were
attributable primarily to the Movado and ESQ brands and, to a lesser extent,
increases in unit sales of Piaget in the United States, Canada and the
Caribbean.

The increase in net sales in fiscal 1996 also included the effect of price
increases which were implemented in response to a significant decline in the
value of the dollar against the Swiss franc, which increased the Company's
product costs. Net sales were also favorably impacted by changes in average
foreign exchange translation rates.

Gross Margins. The Company's gross margin increased from 55.1% to 55.8% in
fiscal 1997. The Company's fiscal 1997 margin was favorably impacted by sales
mix, particularly an increase in the proportion of Concord, Movado and ESQ sales
to net sales, as well as reduced per unit overhead costs due to higher unit
production levels in Switzerland. The Company's gross margin also benefited by
increases in the U.S. dollar against the Swiss franc, which occurred late in the
fiscal year.

The Company's gross margin increased from 52.8% to 55.1% in fiscal 1996.
The Company continued to experience a shift in its overall sales mix toward its
higher margin Concord, Movado and ESQ brands. Gross margin also benefited from
reduced levels of lower margin liquidation sales due to the success of the
Company's outlet stores and improved production planning. The Company was able
to offset the otherwise negative impact on gross margin of a significant decline
in the U.S. dollar against the Swiss franc with price increases on all of its
lines implemented at various points throughout the year.

424B1 17th Page of 69 TOC 1st Previous Next ↓Bottom Just 17th

Operating Expenses. Operating expenses increased 18.2% in fiscal 1997 to
46.3% of net sales from 45.4% of net sales in fiscal 1996. The increase in
fiscal 1997 operating expenses occurred primarily in the advertising and
selling, general and administrative expense categories. Although increasing
slightly in absolute terms, product distribution costs declined as a percentage
of net sales.

The increase in advertising and marketing expenditures occurred primarily
in the U.S. This increase was planned and relates to the Company's ongoing
efforts to build identity and image for its brands. Fiscal 1997 advertising and
marketing costs were affected by higher levels of media spending for Concord,
Movado and, in particular, ESQ in the U.S., production costs for a new
advertising campaign for Concord and increased marketing and promotional
activities in the U.S. for all of the Company's brands, including the
introduction of the new Vizio collection.

The growth in consolidated advertising costs also included increased media
spending in certain international markets, primarily the Far East and Middle
East.

Selling expenses included an increase in sales commissions commensurate
with sales growth as well as the costs associated with an increase in the number
of employees involved in the Company's domestic sales function, particularly in
the ESQ brand and the growth of the Company's retail division.

Fiscal 1997 general and administrative expenses included the cost of
management additions and increased employee benefit costs. Fiscal 1997 operating
expenses also included a non-recurring charge of $450,000 in connection with
restructuring the Company's German business.

Operating expenses increased 21.8% in fiscal 1996 to 45.4% of net sales as
compared to 43.0% of net sales in the prior year. The increase in overall
operating expenses was attributable primarily to a planned 36% increase in
advertising costs, and increases in variable selling and distribution expenses.

The increase in fiscal 1996 advertising expenses related to domestic media
costs primarily for Movado and ESQ, targeted international campaigns,
cooperative advertising programs and domestic and international advertising
production costs. Fiscal 1996 advertising expenses also included a one-time
$600,000 charge in connection with a change in the accounting standards for
advertising production costs. Non-advertising operating expenses as a percentage
of sales were consistent with the prior year.

Interest Expense. Net interest expense, which consists primarily of
interest on the Company's $40 million principal amount of Senior Notes and
borrowings against its working capital and revolving lines of credit, was $4.9
million, $4.5 million and $4.3 million for fiscal 1997, 1996 and 1995,
respectively. The effect of higher average outstanding borrowings against
working capital lines in 1997 and 1996 was offset somewhat by lower average
interest rates on these borrowings.

Income Taxes. The Company's income tax provisions for both fiscal 1997 and
1996 amounted to $3.9 million or 24.8% and 28.5% of pre-tax income,
respectively. A portion of the Company's consolidated operations are located in
non-U.S. jurisdictions and therefore the Company's effective rate differs from
U.S. statutory rates. The majority of the Company's non-U.S. operations are
located in jurisdictions with statutory rates below U.S. rates. The Company
believes that the future effective tax rate will range from 24% to 30%; however,
there can be no assurance of this as it is dependent on a number of factors,
including mix of foreign to domestic earnings, local statutory tax rates and the
Company's ability to utilize net operating loss carryforwards in certain
jurisdictions.

In fiscal 1995, the Company recorded a tax benefit of $2.5 million. The
benefit resulted primarily from the reversal of valuation allowances on domestic
deferred tax assets related to net operating loss carryforwards, cumulative
temporary differences and alternative minimum tax credits.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity needs have been, and are expected to remain,
primarily a function of its seasonal working capital requirements, which have
increased due to significant growth in domestic sales over the two previous
years. The Company's business is not capital intensive and liquidity needs for
capital investments have not been significant in relation to the Company's
overall financing requirements.

424B1 18th Page of 69 TOC 1st Previous Next ↓Bottom Just 18th

The Company has met its liquidity needs primarily through funds from
operations and bank borrowings with domestic and Swiss banks. The Company's
future requirements for capital will relate not only to working capital
requirements for the expected continued growth of its existing brands,
domestically and internationally, but also to funding new product lines,
including the spring 1998 launch of the Company's new Coach watch line, product
line extensions and retail boutiques for the Movado brand. In addition, the
Company is required to make a $5 million sinking fund payment on February 2,
1998 in connection with its $40 million Senior Notes.

In order to meet the increase in working capital requirements, the
Company's revolving credit and working capital lines with its domestic bank
group were amended in July 1997 to provide for a three year $90.0 million
unsecured revolving line of credit, pursuant to the Restated Bank Credit
Agreement, and to provide for $16.6 million of uncommitted working capital lines
of credit. These new facilities replaced a $20.0 million revolving line of
credit and $35.0 million domestic working capital lines of credit and certain of
the Company's Swiss working capital lines. At July 31, 1997, the Company had an
outstanding balance of $52.6 million under the Restated Bank Credit Agreement.

The Company's debt to total capitalization ratio was 48.0% at July 31,
1997, as compared to 41.2% at July 31, 1996. The increase in the debt to total
capitalization ratio was predominantly due to a $19.4 million decline in the
cumulative foreign exchange translation adjustment due to the strength of the
U.S. dollar. In addition, the Company's seasonal borrowings increased $12.9
million under its working capital credit agreements to fund the growth in its
business. The debt to total capitalization ratio at January 31, 1997 was 33.7%.
The increase in the debt to total capitalization ratio from January 31, 1997 was
predominantly due to an increase in loans payable to banks to finance increases
in seasonal working capital requirements.

The Company's net working capital, consisting primarily of trade
receivables and inventories, amounted to $120.0 million at July 31, 1997, $132.6
million at July 31, 1996 and $126.7 million at January 31, 1997. The decrease in
working capital from July 31, 1996 was primarily the result of the
reclassification of $5.0 million of the Company's long-term senior debt, which
is payable February 2, 1998. The decrease in working capital from January 31,
1997 was primarily the result of an increase in liabilities, especially loans
payable to banks, in connection with seasonal working capital requirements.

Accounts receivable at July 31, 1997 were $89.5 million as compared to
$79.3 million at July 31, 1996 and $75.7 million at January 31, 1997. The
increase in receivables was primarily the result of growth in the Company's
business.

Inventories at July 31, 1997 were $105.8 million as compared to $108.6
million at July 31, 1996 and $87.2 million at January 31, 1997. The increase in
inventories from January 31, 1997 to July 31, 1997 reflected a seasonal build-up
prior to the third quarter and, to a lesser degree, the expansion of the
Company's sales base and product line.

The Company's capital expenditures through July 31, 1997 approximated $2.6
million compared to $2.3 million through July 31, 1996. Expenditures were
primarily related to improvements in the Company's management and sales
management information systems and costs incurred in connection with the
expansion of domestic distribution operations. The Company expects that its
annual capital expenditures in fiscal 1998 will exceed the average levels
experienced over the last three fiscal years due to planned improvements in
management information systems, expansion of its retail store network and the
expansion of distribution operations to support continued sales growth.

RECENTLY ISSUED ACCOUNTING STANDARDS

In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement No. 128, Earnings Per Share, which specifies the computation,
presentation and disclosure requirements for earnings per share. Management of
the Company believes that adoption of Statement No. 128, which is required for
the fiscal year ending January 31, 1998, will not have a material impact on the
Company's earnings per share calculation.

424B1 19th Page of 69 TOC 1st Previous Next ↓Bottom Just 19th

BUSINESS

GENERAL

Movado Group is a leading designer, manufacturer and distributor of quality
watches with prominent brands sold in almost every price category comprising the
watch industry. The Company currently markets five distinctive brands of
watches, Movado, Concord, ESQ, Piaget and Corum, which compete in the Exclusive,
Luxury, Premium Branded and Moderate Branded categories of the watch market. In
the spring of 1998, the Company plans to introduce Coach watches as a new brand
under an exclusive worldwide license from Coach. The Company's watches, all of
which are manufactured with Swiss movements, have suggested retail prices
ranging generally from $125 to $50,000, although certain watches have suggested
retail prices in excess of $1,000,000. During fiscal 1997, sales in the United
States and Canada accounted for approximately 82% of the Company's net sales,
with the balance generated internationally.

INDUSTRY OVERVIEW

The largest markets for watches are North America, Western Europe and the
Far East. While exact worldwide wholesale sales volumes are difficult to
quantify, the Company estimates from data obtained from the Federation of the
Swiss Watch Industry that worldwide wholesale sales of finished watches were
over $13 billion in 1996. Watches are produced predominantly in Switzerland,
Japan and Hong Kong. According to the Federation of the Swiss Watch Industry,
Switzerland, Hong Kong and Japan accounted for approximately 68%, 17% and 5%,
respectively, of worldwide finished watch exports based on value. Among all the
major watch exporting countries, Swiss watches have the highest average unit
value.

The Company divides the watch market into five principal categories as set
forth in the following table:

[Enlarge/Download Table]

PRIMARY CATEGORY
OF
SUGGESTED RETAIL MOVADO GROUP
MARKET CATEGORY PRICE RANGE BRANDS
------------------------------------------------- ------------------ ------------------

Exclusive........................................ $10,000 and over Piaget and Corum
Luxury........................................... $1,000 to $9,999 Concord and Vizio
Premium Branded.................................. $500 to $999 Movado
Moderate Branded................................. $100 to $499 ESQ
Mass Market...................................... less than $100 --

The Company competes in the Exclusive category as the exclusive distributor
of Piaget and Corum watches in the United States, Canada, Central America and
the Caribbean. The Company's Concord watches compete primarily in the Luxury
category of the market, although certain Concord watches compete in the
Exclusive and Premium Branded categories. The Company's Vizio watches compete in
the Luxury category of the market. The Company's Movado watches compete
primarily in the Premium Branded category of the market, although certain Movado
watches compete in the Exclusive, Luxury and Moderate Branded categories. It is
expected that the Company's Coach brand will compete in both the Premium Branded
and Moderate Branded categories. The ESQ line competes in the Moderate Branded
category of the market. The Company does not participate in the Mass Market
category.

Exclusive Watches

Exclusive watches are usually made of precious metals, including 18 karat
gold or platinum, and may be set with precious gems, including diamonds,
emeralds, rubies and sapphires. These watches are primarily mechanical or
quartz-analog watches. Mechanical watches keep time with intricate mechanical
movements consisting of an arrangement of wheels, jewels and winding and
regulating mechanisms. Quartz-analog watches have quartz

424B1 20th Page of 69 TOC 1st Previous Next ↓Bottom Just 20th

movements in which time is precisely calibrated to the regular frequency of the
vibration of quartz crystal. Exclusive watches are manufactured almost entirely
in Switzerland. In addition to the Company's Piaget and Corum watches and
certain Movado and Concord watches, well-known brand names of Exclusive watches
include Audemars Piguet, Patek Philippe and Vacheron Constantin.

Luxury Watches

Luxury watches are either quartz-analog watches or mechanical watches.
These watches typically are made with either 14 or 18 karat gold, stainless
steel or a combination of gold and stainless steel, and are occasionally set
with precious gems. Luxury watches are primarily manufactured in Switzerland. In
addition to a majority of the Company's Concord, Vizio and certain Movado
watches, well-known brand names of Luxury watches include Baume & Mercier,
Breitling, Cartier, Ebel, Omega, Rolex and TAG Heuer.

Premium Branded Watches

The majority of Premium Branded watches are quartz-analog watches. These
watches typically are made with gold finish, stainless steel or a combination of
gold finish and stainless steel. Premium Branded watches are manufactured
primarily in Switzerland, although some are manufactured in the Far East. In
addition to a majority of the Company's Movado watches and certain Concord
watches, well-known brand names of Premium Branded watches include Gucci, Rado
and Raymond Weil.

Moderate Branded Watches

Most Moderate Branded watches are quartz-analog watches. Moderate Branded
watches are manufactured primarily in the Far East and Switzerland. These
watches typically are made with gold finish, stainless steel, brass or a
combination of gold finish and stainless steel. In addition to the Company's ESQ
brand, well-known brand names of watches in the Moderate Branded category
include Anne Klein, Bulova, Gucci, Guess, Seiko and Wittnauer.

Mass Market Watches

Mass Market watches typically consist of digital and quartz-analog watches
that are made with stainless steel, brass or plastic. Digital watches, unlike
quartz-analog watches, have no moving parts. Instead, time is kept by electronic
microchips and is displayed as discrete Arabic digits illuminated on the watch
face by light emitting diodes (LEDs) or liquid crystal displays (LCDs). Mass
Market watches are manufactured primarily in the Far East. Movado Group does not
manufacture or distribute Mass Market watches. Well-known brands of Mass Market
watches include Casio, Citizen, Fossil, Pulsar, Seiko, Swatch and Timex.

BUSINESS STRATEGY

The Company has extensive experience in the product design, manufacturing,
distribution, marketing and advertising of watches in the Exclusive, Luxury,
Premium Branded and Moderate Branded categories. The Company believes that
successful watch brands in these categories are characterized by strong brand
images, unique product styling, high quality manufacturing and extensive sales
support.

The Company's business strategy consists of four key elements:

1.Increase sales in those markets where the Company has its strongest market
positions, namely the United States, Canada and the Caribbean, by continuing
to build its brands through product development, advertising, and sales and
point-of-sale support.

The Company intends to continue to build its brands through its individual
brand strategies, which are designed to fit the requirements of each brand's
specific niche. These brand strategies, described below, involve integrating
product styling, pricing, distribution channels and advertising to meet the
needs of a particular type of consumer.

424B1 21st Page of 69 TOC 1st Previous Next ↓Bottom Just 21st

- Movado is a leading brand in the Premium Branded watch category. The
Company intends to continue to leverage Movado's strong competitive
position using the Movado Museum watch dial design, which has an image of
sophistication and style. The Company is expanding the Movado brand
through the introduction of the Vizio collection, which incorporates
contemporary design in non-Museum dial watches at higher price points.
Movado is sold primarily through better department stores, better
independent jewelers and better jewelry store chains.

- Concord is a leading brand in the Luxury watch category. Concord's
watches combine technical sophistication with updated traditional design.
Most Concord watches are made with 18 karat gold, stainless steel or a
combination of 18 karat gold and stainless steel. Concord watches are
positioned to offer significant value relative to other brands in their
category and are sold primarily through independent luxury jewelers.

- ESQ competes in the Moderate Branded watch category as a casual sport
watch brand designed to appeal to the active lifestyle consumer. All ESQ
watches contain Swiss movements. The ESQ brand consists of sport and
fashion watches with features and styles comparable to more expensive
watches. ESQ is sold primarily through better department stores, jewelry
store chains and independent jewelers.

- Piaget is a leading brand in the Exclusive watch category. Piaget
watches, most of which are set with diamonds or other precious stones,
are made from 18 karat gold or platinum. Piaget watches are sold through
a select network of luxury jewelry retailers. In October 1996, the
Company opened the first Piaget boutique in North America on Fifth Avenue
in New York City.

- Corum creates unique and identifiable watches in the Exclusive watch
category, with an emphasis on the men's market. Corum's designs include
the Admiral's Cup watch and the Gold Coin watch, which is constructed
from an actual gold coin. Corum watches are sold through a small network
of luxury jewelry retailers.

2.Increase international sales for the Movado and Concord brands through further
investment in brand advertising and product support in select international
markets, primarily Japan, Hong Kong, Taiwan, the Middle East and Switzerland.

The Company intends to continue to invest significant resources to build
name recognition and brand appeal for the Movado and Concord brands in these
select international markets where the Company believes it has the best growth
opportunities. This effort will be accomplished either by the Company directly
or in concert with local distributors.

3.Introduce and develop the Coach watch brand, both domestically and
internationally, utilizing the Company's existing product development,
manufacturing, distribution, sales and advertising capabilities.

In December 1996, the Company entered into an exclusive 10 year agreement
with Coach to develop and distribute Coach watches worldwide. Coach is a leading
designer of leather goods in North America with over 100 of its own stores
worldwide and extensive distribution in North America and Asia. Coach also
distributes through duty free retailers around the world. The Company has
designed an original line of Coach watches expected to be introduced in the
spring of 1998. The Company intends to distribute Coach watches through Coach's
own stores, better department stores, better jewelry store chains and duty free
retailers.

4.Expand the Movado brand into related product categories through the opening of
Movado retail boutiques.

The Company is developing a range of products that reflect Movado's unique
design philosophy. The primary focus for these products is women's jewelry.
Other product categories include men's jewelry, pens, desk accessories, and
table top objects such as vases, bowls, frames and pitchers. These products will
be sold exclusively through Movado retail boutiques. The Company is developing a
distinctive design for these boutiques and expects to open the first boutique in
the spring of 1998 in the New York metropolitan area.

424B1 22nd Page of 69 TOC 1st Previous Next ↓Bottom Just 22nd

PRODUCTS

The Company currently markets five distinctive brands of watches, Movado,
Concord, ESQ, Piaget and Corum, which compete in the Exclusive, Luxury, Premium
Branded and Moderate Branded categories. The Company designs and manufactures
Movado and Concord watches primarily in Switzerland, as well as in the United
States, for sale throughout the world. ESQ watches are manufactured to the
Company's specifications by independent contractors located in the Far East and
are presently sold in the United States, Canada and the Caribbean. In addition,
Movado Group is the exclusive distributor of Swiss-manufactured Piaget and Corum
watches in the United States, Canada, Central America and the Caribbean. Piaget
and Corum watches are manufactured in Switzerland by Piaget Swiss and Corum
Swiss, respectively. In the spring of 1998, the Company plans to introduce Coach
watches as a new brand under an exclusive worldwide license from Coach.

Movado

Founded in 1881 in La Chaux-de-Fonds, Switzerland, the Movado brand today
includes a line of watches based on the design of the world famous Movado Museum
watch and a number of other watch collections with more traditional dial
designs. The design for the Movado Museum watch was the first watch design
chosen by the Museum of Modern Art for its permanent collection. It has since
been honored by 10 other museums throughout the world. All Movado watches are
made with 14 or 18 karat gold, 18 karat gold finish, stainless steel or a
combination of 18 karat gold finish and stainless steel. The majority of Movado
watches have suggested retail prices between approximately $195 and $4,000.

Concord

Concord was founded in 1908 in Bienne, Switzerland. Concord watches employ
both quartz and mechanical movements. Concord watches are made with 18 karat
gold, stainless steel or a combination of 18 karat gold and stainless steel,
except for Concord Royal Gold watches, most of which are made with 14 karat
gold. The majority of Concord watches have suggested retail prices between
approximately $1,000 and $15,000.

ESQ

ESQ was launched in the second half of fiscal 1993. All ESQ watches contain
Swiss movements and are made with stainless steel, gold finish or a combination
of stainless steel and gold finish, with leather straps, stainless steel
bracelets or gold finish bracelets. The ESQ brand consists of sport and fashion
watches with suggested retail prices from approximately $125 to $495 with
features and styles comparable to more expensive watches.

Piaget

Piaget watches are manufactured by Piaget Swiss in La Cotes-aux-Fees,
Switzerland. The Company believes that Piaget watches are among the most
expensive watches in the world. All Piaget watches are made of 18 karat gold or
platinum. Most Piaget watches are set with diamonds or other precious stones. In
addition, the Company distributes certain Piaget limited edition high jewelry
watches, typically made of 18 karat gold and set with precious gems, including
diamonds, emeralds, rubies and sapphires. The majority of Piaget watches have
suggested retail prices between approximately $4,000 and $50,000.

Corum

Corum Swiss is a family owned company founded in 1955 in La Chaux-de-Fonds,
Switzerland. Corum's watch designs are typically unique and distinctive. Corum's
most recognized watches are the Gold Coin and Admiral's Cup. The majority of
Corum watches have suggested retail prices between approximately $3,000 and
$30,000.

424B1 23rd Page of 69 TOC 1st Previous Next ↓Bottom Just 23rd

Other Products and Services

During fiscal 1997, sales of other products and services totaled
approximately $23.7 million, or approximately 11.1% of net sales. These sales
include revenues from the Company's service and watch repair operations, which
historically have represented a source of consistent revenues with profit
margins comparable to those generated from sales of the Company's watches. Other
products and services include sales derived from the Company's 18 retail stores.

WARRANTY AND REPAIR

The Company has service facilities around the world in 10 Company-owned
service facilities and approximately 135 authorized independent service centers.
The Company conducts training sessions for, and distributes technical
information and updates to, repair personnel in order to maintain consistency
and quality at its service facilities and authorized independent service
centers. The Company's products are covered by limited warranties against
defects in materials and workmanship for periods ranging from one to three years
from the date of purchase for movements and up to five years for Movado watch
casings and bracelets. Products that are returned under warranty to the Company
are generally serviced by the Company's employees at its service facilities.

ADVERTISING

Advertising is important to the successful marketing of the Company's
watches. Movado Group has maintained its own in-house advertising department
since 1972 and devotes significant resources to advertising. Advertising
expenditures totaled approximately 18%, 18% and 15% of net sales in fiscal 1997,
1996 and 1995, respectively. Advertising is developed individually for each of
the Company's watch brands and is directed primarily to the ultimate consumer
rather than to trade customers. The Company develops advertising for each of its
brands by targeting consumers with particular demographic characteristics
appropriate to the image and price range of the brand. Advertisements are placed
predominately in magazines and other print media, but are also created for
television campaigns, catalogues and promotional materials.

SALES AND DISTRIBUTION

Overview

The Company sells Movado and Concord watches throughout the world. ESQ
watches are presently sold in the United States, Canada and the Caribbean. The
Company is the exclusive distributor for Piaget and Corum watches in the United
States, Canada, Central America and the Caribbean. All five brands are sold to
trade customers by the Company's sales personnel, who typically specialize in
one particular brand. The Company also sells Movado and Concord watches outside
the United States, Canada, Central America and the Caribbean through independent
international distributors. In fiscal 1997, no single trade customer or
international distributor accounted for 10% or more of the Company's net sales.
In addition to its sales to trade customers and independent distributors, a
portion of the Company's net sales are made directly to consumers in the United
States through the Company's 18 retail stores.

The Company divides its business into two major geographic markets: the
"domestic" market, which includes the Company's United States and Canadian
operations, and the "international" market, which includes the balance of the
Company's operations.

Domestic

Movado Group operates in the United States through its North American Watch
Company division and in Canada through a Canadian subsidiary. The Company sells
its products in the domestic market primarily through department stores, such as
Macy's, Neiman-Marcus and Saks Fifth Avenue, jewelry store chains, such as
Zales, Helzberg and Sterling, and independent jewelers. Movado, Concord and ESQ
watches are sold through each of these retail channels and Piaget and Corum
watches are sold primarily to independent jewelers. Sales to trade customers in
the United States and Canada are made directly by the Company's sales force of
over 90 employees.

424B1 24th Page of 69 TOC 1st Previous Next ↓Bottom Just 24th

A majority of the sales force is compensated solely on the basis of commissions,
which are determined as a percentage of sales.

International

The Company sells Movado and Concord watches internationally through its
own sales force of approximately 45 employees operating from the Company's sales
and distribution offices in Hong Kong, Singapore, and Switzerland, and also
through a network of approximately 50 independent distributors operating in
numerous countries around the world. A majority of the Company's arrangements
with its international distributors are long-term, generally require certain
minimum purchases and restrict the distributor from selling competitive
products.

Retail Distribution

In addition to its sales to trade customers and independent distributors,
Movado Group sells Movado watches directly to consumers in its Company-operated
Movado store on Fifth Avenue in New York City. The Company also sells Piaget
watches and jewelry directly to consumers in its Company-operated Piaget
boutique on Fifth Avenue in New York City. The Company opened the Piaget
boutique pursuant to an agreement with Piaget Swiss, entered into in fiscal
1997. The Company also operates 16 outlet stores located in Cabazon, St. Helena
and Solvang, California; Destin and St. Augustine, Florida; Tuscola, Illinois;
Michigan City, Indiana; Freeport, Maine; Lee, Massachusetts; Lancaster,
Pennsylvania; Hilton Head, South Carolina; Myrtle Beach, South Carolina; San
Marcos, Texas; Manchester, Vermont; Dawsonville, Georgia; and Williamsburg,
Virginia. These outlet stores sell discontinued and sample merchandise and
factory seconds of all five brands, providing the Company with an organized and
efficient method of reducing its inventory without competing directly with trade
customers.

BACKLOG

At August 31, 1997, the Company had unfilled customer orders of
approximately $47.1 million, compared to approximately $41.6 million at August
31, 1996 (based on foreign exchange rates in effect on August 31, 1997). The
Company believes that substantially all such orders are firm and will be filled
during the Company's current fiscal year. The Company's backlog is affected by a
variety of factors, including seasonality and the scheduling of the manufacture
and shipment of products. Accordingly, a period-to-period comparison of backlog
is not necessarily meaningful and may not be indicative of eventual shipments.

SOURCES AND AVAILABILITY OF SUPPLIES

Movado and Concord watches are generally assembled at the Company's
manufacturing facility in Bienne, Switzerland with some off-site assembly
performed principally by independent Swiss watch makers. Movado and Concord
watches are assembled using Swiss movements and other components obtained from
third-party suppliers. A number of cases and bracelets used in these watches are
also manufactured by the Company. The Movado Gold and Concord Royal Gold
collections are assembled by the Company at its facilities in Lyndhurst, New
Jersey using Swiss movements as well as bracelets and cases obtained from
third-party suppliers. The Company intends to have Coach watches assembled in
Switzerland principally by independent assemblers using Swiss movements and
other components obtained from third-party suppliers in Switzerland and
elsewhere. ESQ watches are manufactured by independent contractors in the Far
East using Swiss movements and other components purchased from third-party
suppliers principally located in the Far East.

A majority of the watch movements used in the manufacture of Movado,
Concord and ESQ watches are purchased from two suppliers. The Company obtains
other watch components for all of its manufactured brands, including movements,
cases, crystals, dials, bracelets and straps, from a number of other suppliers.
Precious stones used in the Company's watches are purchased from various
suppliers and are set in the United States, Canada and Switzerland. Movado Group
does not have long-term supply contracts with any of its component parts
suppliers.

424B1 25th Page of 69 TOC 1st Previous Next ↓Bottom Just 25th

The Company purchases Piaget and Corum watches from Piaget Swiss and Corum
Swiss, respectively, under long-term distribution agreements expiring December
31, 2009. Pursuant to the Piaget Distribution Agreements, Piaget Swiss
undertakes, through its distribution affiliate, Piaget (International) S.A., to
sell watches and jewelry to the Company on request, based on a formula that
allows for the most favorable prices and delivery terms at which the watches and
jewelry are then being offered for sale to wholesale distributors unrelated to
Piaget Swiss. Under the terms of the Corum Distribution Agreement, Corum Swiss
undertakes to sell watches to the Company at the lowest prices at which the
watches are then being offered for sale to others, and to use reasonable efforts
to comply with all delivery dates specified by the Company.

COMPETITION

The markets for each of the Company's watch brands are highly competitive.
With the exception of SMH, a large Swiss-based competitor, no single company
competes with the Company across all of its brands. Certain companies, however,
compete with Movado Group with respect to one or more of its watch brands.
Certain of these companies have, and other companies that may enter the
Company's markets in the future may have, substantially greater financial,
distribution, marketing and advertising resources than the Company. The
Company's future success will depend, to a significant degree, upon its ability
to compete effectively with regard to, among other things, the style, quality,
price, advertising, marketing and distribution of its watch brands.

TRADEMARKS AND LICENSING AGREEMENTS

Movado Group owns the trademarks MOVADO(R), CONCORD(R), VIZIO(TM) and
related trademarks for watches in the United States and in numerous other
countries. The Company licenses ESQUIRE(R), ESQ(R) and related trademarks on an
exclusive basis for use in connection with the manufacture, distribution,
advertising and sale of watches pursuant to the Hearst License Agreement. The
current term of the Hearst License Agreement expires December 31, 2000, and the
agreement is renewable at the Company's option through December 31, 2018. The
Company licenses the trademark COACH(R) and related trademarks on an exclusive
basis for use in connection with the manufacture, distribution, advertising and
sale of watches pursuant to the Coach License Agreement. Subject to meeting
certain performance goals, the Coach License Agreement expires 10 years after
the Company's initial sales of Coach watches to retail outlets not operated by
Coach, which are expected to commence in the spring of 1998.

The Company owns the trademark PIAGET(R) for watches and jewelry and a
number of related trademarks for watches in the United States. Pursuant to the
Piaget Distribution Agreements, the Company is required to assign such
trademarks to Piaget Swiss upon the expiration of the Piaget Distribution
Agreements on December 31, 2009.

The Company also owns the trademark CORUM(R) and a number of related
trademarks for watches in the United States. Pursuant to the Corum Distribution
Agreement, the Company is required to assign these trademarks to Corum Swiss on
December 31, 2009 upon the expiration of the Corum Distribution Agreement,
unless earlier terminated by either party as of December 30, 2002.

The Company actively seeks to protect and enforce its trademarks by working
with industry associations, anti-counterfeiting organizations, private
investigators and law enforcement authorities, monitoring the enforcement of
certain exclusion orders received from Customs and, when necessary, suing
infringers of its trademarks. Consequently, the Company is involved from time to
time in litigation or other proceedings to determine the enforceability, scope
and validity of these rights. As the owner of the PIAGET(R) trademark for
watches in the United States, the Company has received an exclusion order,
pursuant to Customs regulations, which prohibits the importation of both
counterfeit and gray-market Piaget watches into the United States. A
"gray-market" good is a foreign manufactured good that bears a valid United
States trademark and is imported without the consent of the United States
trademark owner. Customs enforces the exclusion order by seizing any such goods
at their point of entry into the United States. The Company also has exclusion
orders covering the trademark CORUM(R) and the Admiral's Cup dial design
trademark. With respect to the trademarks MOVADO(R) and CONCORD(R) and certain
other related trademarks, the Company has received exclusion orders that
prohibit the importation of counterfeit goods or goods bearing confusingly
similar trademarks into the United States. In accordance with Customs

424B1 26th Page of 69 TOC 1st Previous Next ↓Bottom Just 26th

regulations, these exclusion orders, however, cannot cover the importation of
gray-market Movado or Concord watches because the Company is the manufacturer of
such watches. All of the Company's exclusion orders are renewable.

EMPLOYEES

As of June 30, 1997, the Company had 718 full-time employees in its
domestic and international operations. No employee of the Company is represented
by a labor union or is subject to a collective bargaining agreement. The Company
has never experienced a work stoppage due to labor difficulties and believes
that its employee relations are good.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS AND SEASONALITY

The Company operates in one industry segment: the design, manufacture and
distribution of quality watches. The Company's sales in the United States and
Canada are traditionally greater during the Christmas and holiday season and are
significantly more seasonal than its international sales. Consequently, the
Company's net sales historically have been higher during the second half of its
fiscal year. The second half of each year accounted for approximately 62%, 61%
and 63% of the Company's net sales for the fiscal years ending January 31, 1997,
1996 and 1995, respectively. The amount of net sales and operating income
generated during the second half of each fiscal year depends upon the general
level of retail sales during the Christmas and holiday season, as well as
economic conditions and other factors beyond the Company's control. The Company
does not expect any significant change in the seasonality of its domestic
business in the foreseeable future. International sales tend to be less
seasonal, particularly those derived from the Middle and Far Eastern markets.

PROPERTIES

The Company leases various facilities in the United States, Canada,
Switzerland and the Far East for its corporate, manufacturing, distribution and
sales operations. The Company's leased facilities are as follows:

[Enlarge/Download Table]

SQUARE LEASE
LOCATION FUNCTION FOOTAGE EXPIRATION
----------------------------------- -------------------------------------- ------- ---------------

Lyndhurst, New Jersey.............. Executive offices, watch 93,000 May 2002
assembly and distribution
Bienne, Switzerland................ Corporate functions, watch 52,000 January 2007
sales, distribution, assembly and
repair
Toronto, Canada.................... Watch sales, distribution and 11,200 June 2007
repair
Hackensack, New Jersey............. Warehouse 6,600 July 1999
Willowdale, Canada................. Distribution 5,335 May 1998
Hong Kong.......................... Watch sales, distribution and 3,400 January 1999
repair
Los Angeles, California............ Watch repair 3,000 December 1997
Miami, Florida..................... Watch repair 2,600 October 2001
Grenchen, Switzerland.............. Watch sales 2,600 January 1998
New York, New York................. Watch repair 2,200 November 2005
Japan.............................. Watch sales 750 May 1998
Singapore.......................... Watch sales, distribution and repair 474 August 1998

The Company leases retail space with average square footage of
approximately 1,500 square feet per store for the operation of its Movado store
and 16 outlet stores under leases expiring from February 1998 to July 2004. The
Company also leases approximately 3,700 square feet of space at 730 Fifth Avenue
in New York City under a lease expiring May 31, 2006. The Company operates this
location as the Piaget boutique, devoted exclusively to Piaget watches and
jewelry.

424B1 27th Page of 69 TOC 1st Previous Next ↓Bottom Just 27th

Movado Group owns 1.2 acres and the buildings located thereon in
La-Chaux-de-Fonds, Switzerland, which the Company uses for watch component
manufacturing. The Company also owns approximately 2,400 square feet of office
space in Hanau, Germany, which it previously used for sales, distribution and
watch repair functions. The Company believes that its existing facilities are
adequate for its current operations and to handle reasonably foreseeable sales
growth.

LEGAL PROCEEDINGS

The Company is involved in certain legal proceedings arising in the normal
course of its business. The Company believes that none of these proceedings,
either individually or in the aggregate, would have a material adverse effect on
the Company's business or its consolidated financial position.

424B1 28th Page of 69 TOC 1st Previous Next ↓Bottom Just 28th

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the current
executive officers and directors of the Company:

[Enlarge/Download Table]

YEAR FIRST
NAME AGE POSITION ELECTED
-------------------------------------- --- -------------------------------------- ----------

Gedalio Grinberg(1)................... 66 Chief Executive Officer and Chairman
of the Board of Directors 1967
Efraim Grinberg(1).................... 39 President and Director 1988
Michael J. Bush....................... 36 Executive Vice President, Chief
Operating Officer and Director 1996
Kenneth J. Adams...................... 40 Senior Vice President and Chief
Financial Officer --
Timothy F. Michno..................... 40 Secretary and General Counsel --
Howard Regenbogen..................... 67 Treasurer and Assistant Secretary --
Leonard L. Silverstein(2)(3).......... 75 Director 1975
Donald Oresman(2)(3).................. 72 Director 1981
Margaret Hayes Adame(2)(3)............ 58 Director 1993
Alan H. Howard........................ 38 Director 1997

---------------
(1) Member of the Executive Committee of the Board.
(2) Member of the Compensation Committee of the Board.
(3) Member of the Audit Committee of the Board.

Each director holds office until the next annual meeting of shareholders
and until a successor has been elected and qualified. The Company's executive
officers are elected annually by the Board of Directors and serve at the
discretion of the Board of Directors. There are no family relationships between
any of the executive officers or directors with the exception of Efraim
Grinberg, who is the son of Gedalio Grinberg. There are no arrangements between
any of the executive officers or directors and any other person pursuant to
which any of them was elected an executive officer or director. No executive
officer of the Company will receive any additional compensation for serving the
Company as a member of the Board of Directors or any of its committees.
Directors who are not executive officers of the Company receive a fee of $3,000
for each Board of Directors meeting attended and $1,000 for each committee
meeting attended.

Mr. G. Grinberg founded the Company in 1961 and since then has served as
the Company's Chairman and Chief Executive Officer.

Mr. E. Grinberg joined the Company in June 1980 and served as the Company's
Vice President of Marketing from February 1985 until July 1986, at which time he
was elected to the position of Senior Vice President of Marketing. In 1988, Mr.
E. Grinberg was elected to the Board of Directors of the Company. From June 1990
to October 1995, Mr. E. Grinberg served as the Company's President and Chief
Operating Officer, and since October 1995 has served as the Company's President.
Mr. E. Grinberg also serves on the board of directors of the American Watch
Association and the Jewelers' Security Alliance.

Mr. Bush was elected to the Board of Directors of the Company in 1996. Mr.
Bush joined the Company in August 1995 as Executive Vice President and Chief
Operating Officer. From 1991 to 1995, Mr. Bush was the Senior Vice President,
Marketing and Strategic Planning for Ross Stores, Inc., a California-based
retailer. Prior to assuming his position at Ross Stores, Mr. Bush was a Senior
Consultant with Bain & Company, Inc., a strategic consulting firm which he
joined in 1985.

Mr. Adams, who served as Corporate Controller since joining the Company in
December 1992, was elected Senior Vice President and Chief Financial Officer in
April 1995. Before joining the Company, Mr. Adams

424B1 29th Page of 69 TOC 1st Previous Next ↓Bottom Just 29th

worked for 12 years at Price Waterhouse LLP, where he progressed to the position
of Senior Manager, serving clients in the international and middle market
arenas.

Mr. Michno joined the Company in April 1992 and since then has served as
its Secretary and General Counsel. He has been engaged in the practice of law
for the past 14 years. Immediately prior to joining the Company and since 1986,
Mr. Michno was an associate at the New York firm of Chadbourne & Parke. From
1988 to 1991, he served as a resident outside counsel to American Brands, Inc.,
a consumer products company.

Mr. Regenbogen joined the Company in 1972 as its Controller and has served
as Treasurer of the Company since 1978. From September 1994 until April 1995,
Mr. Regenbogen also served as the Company's Chief Financial Officer.

Mr. Silverstein has served on the Board of Directors since 1981. He has
been engaged in the practice of law at Silverstein and Mullens, Washington,
D.C., for 39 years. Mr. Silverstein also serves as Vice President and Director
of Tax Management, Inc., a wholly-owned subsidiary of BNA, Inc., and a director
of Chevy Chase Federal Savings Bank. He is a former Vice Chairman and currently
honorary trustee of the John F. Kennedy Center for the Performing Arts, a
director and past President of the Alliance Francaise of Washington, a director
of the National Symphony Orchestra Association and a trustee of the White House
Historical Association.

Mr. Oresman has served on the Board of Directors of the Company since 1981.
He was Executive Vice President and General Counsel of Paramount Communications,
Inc., a publishing and entertainment company, from December 1983 until his
retirement in March 1994. Prior to December 1983, Mr. Oresman was engaged in the
practice of law as a partner of Simpson Thacher & Bartlett, where he is now Of
Counsel.

Ms. Hayes Adame has served on the Board of Directors of the Company since
1993. Ms. Hayes Adame is the President of the Fashion Group International, Inc.,
which she joined in March 1993. From 1981 to March 1993, Ms. Hayes Adame was a
senior vice president and general merchandise manager at Saks Fifth Avenue. She
is also a member of the board of directors of International Flavors &
Fragrances, Inc.

Mr. Howard was elected to the Board of Directors of the Company in
September 1997. Mr. Howard is a Managing Director of Credit Suisse First Boston
Corporation, which he joined in 1986. Prior to 1986, Mr. Howard worked with the
James River Corporation and the Dixie Products Group of American Can Company.

424B1 30th Page of 69 TOC 1st Previous Next ↓Bottom Just 30th

CERTAIN TRANSACTIONS

In August 1995, the Company hired Michael J. Bush as Executive Vice
President and Chief Operating Officer. Pursuant to its offer of employment, the
Company made a $150,000 interest free loan to Mr. Bush to partially compensate
Mr. Bush for the loss of certain stock options he forfeited when he left Ross
Stores, Inc. to join the Company. Under the terms of a promissory note, as
amended, the loan is payable on or before January 31, 1998. Pursuant to the
terms of the amended note, the outstanding balance of the loan was reduced by
$75,000 on January 31, 1997 and, as long as Mr. Bush remains an employee of the
Company, will be reduced by an amount equal to the then remaining outstanding
balance on January 31, 1998.

In fiscal 1996, the Company entered into an agreement with a trust, which
owns an insurance policy issued on the lives of Gedalio Grinberg, the Chief
Executive Officer and Chairman of the Board, and his spouse and which provides
for a death benefit of $27 million. The trustees of the trust are the three
children of Mr. G. Grinberg and Mrs. Grinberg, including Efraim Grinberg, the
President of the Company. Under the agreement, the trust has assigned the
insurance policy to the Company as collateral to secure repayment by the trust
of interest free loans to be made annually by the Company to the trust in
amounts sufficient for the trust to pay the premiums on the insurance policy
(approximately $740,000 per annum). Under the agreement, the trust will repay
the loans from the death benefit proceeds of the policy.

Under a Death and Disability Benefit Plan Agreement (the "Agreement"),
dated September 23, 1994, with Mr. G. Grinberg, in the event of his death or
disability while employed by the Company, the Company will pay to his surviving
spouse an annual benefit equal to $300,000 (increased each year beginning
October 1, 1995 by an amount equal to two percent of the benefit that would have
been payable in the prior year). Benefits are payable for the lesser of 10 years
or the life of Mr. G. Grinberg's spouse, and are payable only from the general
assets of the Company. Neither Mr. G. Grinberg nor his spouse may assign the
Agreement or any of the benefits payable thereunder and none of the benefits are
payable to their estates or any of their heirs. The Agreement provides that it
automatically terminates in the event of the termination of Mr. G. Grinberg's
employment with the Company for any reason other than his death or disability
and further provides that it is not to be considered a contract of employment.
For purposes of the Agreement, "disability" means the inability of Mr. G.
Grinberg to perform the duties pertaining to his job because of accident,
sickness or other illness as determined by a majority of disinterested
directors.

424B1 31st Page of 69 TOC 1st Previous Next ↓Bottom Just 31st

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Class A Common Stock and Common Stock as of
September 30, 1997 (except as otherwise noted in footnotes 4, 5 and 11) as
adjusted to reflect the sale of the Common Stock in the Offering by (i) each
stockholder who is known by the Company to beneficially own in excess of 5% of
the outstanding Common Stock, (ii) each director, (iii) the named executive
officers, (iv) the Selling Shareholders and (v) all the executive officers and
directors as a group. Unless otherwise noted, all shares are beneficially owned
by the persons indicated.

[Enlarge/Download Table]

TOTAL
CAPITAL
CLASS A COMMON STOCK STOCK
--------------------------------------------------- COMMON STOCK -----------
TO BE SOLD ----------------------------------------------
IN THE TO BE VOTING
OWNED PRIOR OFFERING AS TO BE OWNED OWNED PRIOR SOLD IN TO BE OWNED POWER
TO THE COMMON AFTER THE TO THE THE AFTER THE AFTER THE
OFFERING STOCK OFFERING OFFERING OFFERING OFFERING OFFERING(1)
---------------- ----------- ---------------- ---------------- -------- ---------------- -----------
NAME NUMBER % NUMBER NUMBER % NUMBER % NUMBER NUMBER % %
------------- --------- ---- ----------- --------- ---- --------- ---- -------- --------- ---- -----------

Margaret
Hayes
Adame...... -- -- -- -- -- 1,875 * -- 1,875 * *
Kenneth J.
Adams(2)... -- -- -- -- -- 15,009 * -- 15,009 * *
Michael J.
Bush(3).... -- -- -- -- -- 91,875 1.4 -- 91,875 1.0 *
FMR
Corp.(4)... -- -- -- -- -- 1,123,312 16.6 -- 1,123,312 12.6 2.3
Goldman Sachs
& Co.(5)... -- -- -- -- -- 1,151,625 17.0 -- 1,151,625 12.9 2.4
Efraim
Grinberg(6)... 842,594 18.6 -- 842,594 21.6 147,627 2.2 -- 147,627 1.7 17.9
Gedalio
Grinberg(7)... 2,972,730 65.6 634,500** 2,338,230 60.0 61,377 * -- 61,377 * 49.0
The Grinberg
Family
Foundation(8)...84,778 1.9 ** 84,778 2.2 -- -- -- -- -- 1.8
Alan H.
Howard..... -- -- -- -- -- 937 * -- 937 * *
Timothy F.
Michno(9)... -- -- -- -- -- 6,759 * -- 6,759 * *
Donald
Oresman.... 1,960 * -- 1,960 * -- -- -- -- -- *
Leonard L.
Silverstein(10)..516,246 11.4 -- 516,246 13.2 32,823 * -- 32,823 * 10.8
Thomson
Horstmann &
Bryant,
Inc.(11)... -- -- -- -- -- 607,312 9.0 -- 607,312 6.8 1.3
Andrew H.
Weiss,
trustee(12).. -- -- -- -- -- 265,500 3.9 265,500 -- -- --
All executive
officers
and
directors
as a group
(10
persons)(13)..3,817,284 84.2 634,500 3,182,784 81.7 325,977 4.8 -- 325,977 3.7 67.1

---------------
* Denotes less than 1% of the capital stock.

** The Grinberg Family Foundation will sell up to 80,000 shares of Common
Stock, and Mr. G. Grinberg will sell up to an additional 240,000 shares of
Common Stock, if the Underwriters exercise their over-allotment option to
purchase up to 320,000 shares of Common Stock.

The address for Messrs. Adams, Bush, G. Grinberg, E. Grinberg, Howard,
Michno, Oresman, Silverstein and Ms. Hayes Adame is c/o Movado Group, Inc.,
125 Chubb Avenue, Lyndhurst, New Jersey 07071.

(1) In calculating the percent of total voting power, the voting power of
shares of Common Stock (one vote per share) and Class A Common Stock (10
votes per share) has been aggregated.

(2) The total shares of Common Stock reported as beneficially owned by Mr.
Adams includes 15,000 shares which he has the right to acquire by the
exercise of options under the Company's 1996 Stock Incentive Plan.

(3) The total shares of Common Stock reported as beneficially owned by Mr. Bush
includes 75,000 shares which he has the right to acquire by the exercise of
options under the Company's 1996 Stock Incentive Plan.

(4) In a joint filing on Schedule 13G dated February 14, 1997 under the
Exchange Act, FMR Corp., through its wholly owned subsidiary, Fidelity
Management and Research Company, and Edward C. Johnson 3d and Abigail P.
Johnson each reported beneficial ownership of 599,100 shares of Common
Stock as to which each such reporting person has sole dispositive power and
which, as adjusted for the Stock Splits, equaled 1,123,312 shares. Each
reporting person reported having no shared dispositive power as to any such
shares nor any voting power, either sole or shared, as to any such shares.
Each such reporting person also reported that all of the shares of Common
Stock which it beneficially owns were acquired in the ordinary course of

424B1 32nd Page of 69 TOC 1st Previous Next ↓Bottom Just 32nd

business and not for the purpose or with the effect of changing or
influencing control of the Company, or in connection with any transaction
having such purpose or effect. The address of FMR Corp., Edward C. Johnson
3d and Abigail P. Johnson is 82 Devonshire Street, Boston, Massachusetts
02109.

(5) On February 14, 1997, in a joint filing on Schedule 13G under the Exchange
Act, Goldman Sachs Equity Portfolios, Inc., on behalf of Goldman Sachs
Small Cap Equity Fund ("GS Equity"), reported beneficial ownership of
541,600 shares of Common Stock as to which it has shared investment and
voting power and which, as adjusted for the Stock Splits, equaled 1,015,500
shares. The Goldman Sachs Group, L.P. ("Group") and Goldman Sachs & Co.
("GS & Co.") each reported beneficial ownership of 614,200 shares of Common
Stock, including the shares owned by GS Equity, which, as adjusted for the
Stock Splits, equaled 1,151,625 shares. Each of Group and GS & Co. reported
that it has shared investment and voting power as to all 1,151,625 shares
of Common Stock. As adjusted for the Stock Splits, the total shares of
Common Stock beneficially owned by Group and GS & Co. equaled 1,151,625.
None of Group, GS & Co. or GS Equity reported having sole voting or
investment power as to any of the shares of Common Stock, and each reported
in its Schedule 13G filing that all these shares were acquired in the
ordinary course of business and not for the purpose or with the effect of
changing or influencing the control of the Company, or in connection with
any transaction having such purpose or effect. The address of Group and GS
& Co. is 85 Broad Street, New York, New York 10004. The address of GS
Equity is 1 New York Plaza, New York, New York 10004.

(6) The total number of shares of Class A Common Stock beneficially owned by
Efraim Grinberg includes an aggregate of 281,653 shares held by several
trusts for the benefit of Mr. E. Grinberg's siblings and himself, of which
trusts Mr. E. Grinberg is sole trustee. As sole trustee, Mr. E. Grinberg
has sole investment and voting power with respect to the shares held by
such trusts. In addition, the amount of shares of Class A Common Stock
reported for Mr. E. Grinberg includes an aggregate of 431,468 shares of
Class A Common Stock held by several trusts for the benefit of Mr. E.
Grinberg's siblings and himself, of which trust Mr. E. Grinberg is
co-trustee with Leonard L. Silverstein. As a co-trustee, Mr. E. Grinberg
has shared investment and voting power with Mr. Silverstein with respect to
the shares of Class A Common Stock held by such trusts. The total number of
shares of Common Stock owned by Mr. E. Grinberg includes 55,752 shares of
Common Stock held under the Company's Employee Savings and Investment Plan
("401(k) Plan"), the trustees of which are Messrs. G. Grinberg and E.
Grinberg, both of whom have shared investment and voting power as to such
shares. Mr. E. Grinberg disclaims beneficial ownership as to the 477,107
shares of Class A Common Stock held by the trusts for the benefit of his
siblings of which he is trustee or co-trustee and of the 55,752 shares of
Common Stock held under the Company's 401(k) Plan except to the extent of
his pecuniary interest therein. The total number of shares of Common Stock
owned by Mr. E. Grinberg also includes 90,000 shares of Common Stock which
he has the right to acquire by the exercise of options under the Company's
1996 Stock Incentive Plan.

(7) The total number of shares of Class A Common Stock beneficially owned by
Mr. G. Grinberg includes 84,778 shares of Class A Common Stock owned by The
Grinberg Family Foundation, a non-profit corporation of which Mr. G.
Grinberg, Sonia Grinberg and Leonard L. Silverstein are the directors and
as to which shares these three individuals have shared investment and
voting power. The total number of shares of Common Stock owned by Mr. G.
Grinberg includes 55,752 shares of Common Stock held under the Company's
401(k) Plan, the trustees of which are Messrs. G. Grinberg and E. Grinberg,
both of whom have shared investment and voting power as to such shares. Mr.
G. Grinberg disclaims beneficial ownership as to the 84,778 shares of Class
A Common Stock owned by The Grinberg Family Foundation and the 55,752
shares of Common Stock owned by the Company's 401(k) Plan except to the
extent of his pecuniary interest therein.

(8) See note 7.

(9) The total number of shares of Common Stock reported as beneficially owned
by Mr. Michno includes 6,750 shares which he has the right to acquire by
the exercise of options under the Company's 1996 Stock Incentive Plan.

(10) The total number of shares of Class A Common Stock beneficially owned by
Leonard L. Silverstein includes an aggregate of 431,468 shares of Class A
Common Stock held by several trusts for the benefit of

424B1 33rd Page of 69 TOC 1st Previous Next ↓Bottom Just 33rd

Mr. G. Grinberg's three children, of which trusts Mr. Silverstein is
co-trustee with Mr. E. Grinberg with whom he has shared investment and
voting power as to the shares held by such trusts. The total number of
shares of Class A Common Stock reported for Mr. Silverstein also includes
84,778 shares of Class A Common Stock owned by The Grinberg Family
Foundation of which Mr. G. Grinberg, Sonia Grinberg and Mr. Silverstein are
the directors and as to which shares these three individuals have shared
investment and voting power. Mr. Silverstein disclaims beneficial ownership
of the shares of Class A Common Stock held by the trusts and The Grinberg
Family Foundation.

(11) Thomson Horstmann & Bryant, Inc. ("TH&B"), in a filing under the Exchange
Act on Schedule 13G dated January 7, 1997, reported beneficial ownership of
323,900 shares of Common Stock as to all of which shares it has sole
investment power. TH&B also reported that it has sole voting power with
respect to 198,700 of such shares and shared voting power as to 5,300 of
such shares. As adjusted for the Stock Splits, TH&B's total beneficial
ownership equaled 607,312 shares of Common Stock, as to 372,562 of which it
had sole voting power and shared voting power of 9,937 shares. TH&B
reported that all of the shares of Common Stock which it beneficially owns
were acquired in the ordinary course of business and not for the purpose or
with the effect of changing or influencing control of the Company, or in
connection with any transaction having such purpose or effect. The address
of TH&B is Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663.

(12) Mr. G. Grinberg and Mr. Andrew H. Weiss act as trustees of the GG and SG
1997 Charitable Remainder Unitrust under an agreement dated September 30,
1997 (the "Trust Agreement"), and as such possess joint voting control over
the 265,500 shares of Common Stock owned by the trust prior to the
Offering. However, pursuant to the terms of the Trust Agreement, Mr. Weiss,
as independent trustee, has the sole right to sell such shares. The address
of Mr. Weiss is c/o Reminick, Aarons & Co., LLP, 685 Third Avenue, New
York, New York 10017.

(13) Excludes double counting of shares deemed to be beneficially owned by more
than one person. Unless otherwise indicated, the individuals named have
sole investment and voting power.

424B1 34th Page of 69 TOC 1st Previous Next ↓Bottom Just 34th

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
8,914,591 shares of Common Stock and 3,897,731 shares of Class A Common Stock
(9,234,591 shares and 3,577,731 shares, respectively, if the Underwriters'
over-allotment option is exercised in full). Class A Common Stock may be
converted into shares of Common Stock on a one-for-one basis. The 2,400,000
shares of Common Stock sold in the Offering and the remaining shares of the
Company not held by "affiliates" of the Company will be freely tradeable without
restriction or further registration under the Securities Act. Of the total
outstanding shares of capital stock upon completion of the Offering, 325,977
shares of Common Stock and 3,182,784 shares of Class A Common Stock (325,977 and
2,862,784 shares, respectively, if the Underwriters' over-allotment option is
exercised in full) will be held by "affiliates," as that term is defined in the
Securities Act, and will be subject to the limitations of Rule 144 of the
Securities Act.

In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares for at least one year, including an "affiliate," is
entitled to sell, within any three-month period, a number of restricted shares
that does not exceed the greater of: (i) 1% of the then outstanding shares of
the Common Stock or (ii) the average weekly trading volume of the Common Stock
during the four calendar weeks preceding filing of notice of such sale. Sales
under Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
Company. A shareholder who is deemed not to have been an "affiliate" of the
Company at any time during the 90 days preceding a sale, and who has
beneficially owned restricted shares for at least two years, would be entitled
to sell such shares under Rule 144(k) without regard to the volume limitations,
manner of sale provisions or public information requirements. As defined in Rule
144, an "affiliate" of an issuer is a person that directly, or indirectly
through the use of one or more intermediaries, controls, is controlled by or is
under common control with such issuer.

The Company, its officers and directors, the Selling Shareholders and
certain other shareholders have agreed not to offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file or cause to be
filed with the Commission a registration statement under the Securities Act
relating to, any shares of the Common Stock or securities or other rights
convertible into or exchangeable or exercisable for any shares of Common Stock
without the prior written consent of Credit Suisse First Boston Corporation, for
a period of 120 days after the date of this Prospectus. Following such period,
shares of Common Stock held by such shareholders that are not "affiliates" of
the Company will be freely tradeable without restriction under the Securities
Act.

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, par value $0.01 per share, 10,000,000 shares of Class A Common
Stock, par value $0.01 per share ("Class A Common Stock"), and 5,000,000 shares
of preferred stock, par value $0.01 per share ("Preferred Stock"). The following
summary description of the capital stock of the Company does not purport to be
complete and is qualified in its entirety by reference to the Restated
Certificate of Incorporation, a copy of which is filed as an exhibit to the
registration statement of which this Prospectus is a part, and to the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission pursuant to the
Exchange Act on September 9, 1993, which is incorporated herein by reference and
to the New York Business Corporation Law ("BCL"). See "Available Information."

COMMON STOCK

Voting Rights

Each share of Common Stock is entitled to one vote per share and each share
of Class A Common Stock is entitled to 10 votes per share on all matters
submitted to a vote of the shareholders.

Dividends

Subject to the rights of holders of Preferred Stock, if any, and subject to
any other provisions of the Restated Certificate of Incorporation, holders of
Common Stock and Class A Common Stock are entitled to receive such dividends and
other distributions in cash, property or shares of stock of the Company as may
be declared by the Board of Directors in its discretion from any assets of the
Company legally available therefore. Shares of

424B1 35th Page of 69 TOC 1st Previous Next ↓Bottom Just 35th

Common Stock and Class A Common Stock will share equally on a per share basis in
any dividends declared by the Board of Directors.

Convertibility

Each holder of shares of Class A Common Stock is entitled to convert, at
any time and from time to time, any and all such shares into the same number of
shares of Common Stock. Each share of Class A Common Stock will be converted
automatically into Common Stock in the event that the beneficial or record
ownership of such share of Class A Common Stock is transferred (including,
without limitation, by way of gift, settlement, will or intestacy) to any person
or entity, except to certain family members or other affiliated persons deemed
"Permitted Transferees" by the Restated Certificate of Incorporation. The Common
Stock is not convertible.

Liquidation Rights

Upon the liquidation, dissolution or winding up of the Company, the holders
of Common Stock and Class A Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding Preferred Stock.

Other Provisions

There are no preemptive rights to subscribe to any additional securities
that the Company may issue, and there are no redemption provisions or sinking
fund provisions applicable to the Common Stock or the Class A Common Stock nor
is either class subject to calls or assessments by the Company. All outstanding
shares are, and the shares to be outstanding upon completion of the Offering
will be, validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
shareholders, to issue up to 5,000,000 shares of Preferred Stock in one or more
classes or series and to fix the designations, preferences, privileges and
restrictions granted to or imposed upon any unissued shares of Preferred Stock
and to fix the number of shares constituting any series and the designations of
such series. The issuance of Preferred Stock could adversely affect the voting
power of the holders of any of the classes of capital stock and the likelihood
that such holders will receive dividend payments and payments upon liquidation
and may have the effect of delaying, deferring or preventing a change in control
of the Company. The Company has no present plans to issue any Preferred Stock.

CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND RESTATED
BY-LAWS

Pursuant to the Restated Certificate of Incorporation, directors can be
removed from office only for cause and only by the affirmative vote of the
holders of 66 2/3% of the then outstanding shares of capital stock entitled to
vote generally in an election of directors. Vacancies on the Board of Directors
may be filled only by the remaining directors (even though less than a quorum)
and not by the shareholders.

The Restated Certificate of Incorporation and Restated By-Laws provide that
special meetings of shareholders may be called only at the direction of the
Board of Directors by resolution adopted by the affirmative vote of a majority
of the entire Board or by the Chairman, the President or the Secretary of the
Company. Shareholders are not permitted to call a special meeting or to require
that the Board of Directors call a special meeting of shareholders. Certain of
the provisions contained in the Restated Certificate of Incorporation may be
amended only by the affirmative vote of the holders of 66 2/3% of the then
outstanding shares of capital stock entitled to vote generally in an election of
directors.

The Restated By-Laws establish an advance notice procedure for the
nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors, as well as for other shareholder proposals
to be considered at annual meetings of shareholders. In general, notice of
intent to nominate a director or raise business at such meeting must be received
by the Company not less than 60 nor more than 90 days prior to the anniversary
of the previous year's annual meeting and must contain certain specified
information

424B1 36th Page of 69 TOC 1st Previous Next ↓Bottom Just 36th

concerning the person to be nominated or the matter to be brought before the
meeting and concerning the stockholder submitting the proposal.

The foregoing provisions of the Restated Certificate of Incorporation and
the Restated By-Laws, together with the voting rights of the Class A Common
Stock, could discourage or make more difficult a merger, tender offer or proxy
contest, even if such provisions could be favorable to the interests of
shareholders, and could potentially depress the market price of the Common
Stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock and the Class A
Common Stock is The Bank of New York.

424B1 37th Page of 69 TOC 1st Previous Next ↓Bottom Just 37th

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated October 20, 1997 (the "Underwriting Agreement"), the
underwriters named below (the "Underwriters"), for whom Credit Suisse First
Boston Corporation, Furman Selz LLC and Rodman & Renshaw, Inc. are acting as
representatives (the "Representatives"), have severally but not jointly agreed
to purchase from the Company and the Selling Shareholders the following
respective numbers of shares of Common Stock:

[Download Table]

NUMBER OF
UNDERWRITER SHARES
------------------------------------------------------------------ ---------

Credit Suisse First Boston Corporation............................ 850,000
Furman Selz LLC................................................... 510,000
Rodman & Renshaw, Inc. ........................................... 340,000
BancAmerica Robertson Stephens.................................... 100,000
The Chapman Co. .................................................. 50,000
Gaines, Berland Inc. ............................................. 50,000
Hambrecht & Quist LLC............................................. 100,000
Invemed Associates, Inc. ......................................... 100,000
Ladenburg, Thalmann & Co. Inc. ................................... 50,000
SBC Warburg Dillon Read Inc. ..................................... 100,000
Charles Schwab & Co., Inc. ....................................... 100,000
Tucker Anthony Incorporated....................................... 50,000
-------
Total................................................... 2,400,000
=======

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides that,
in the event of a default by an Underwriter, in certain circumstances the
purchase commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.

Certain Selling Shareholders have granted to the Underwriters an option,
expiring at the close of business on the 30th day after the date of this
Prospectus, to purchase up to an aggregate of 320,000 additional outstanding
shares from such Selling Shareholders at the initial public offering price less
the underwriting discounts and commissions, all as set forth on the cover page
of this Prospectus. Such option may be exercised only to cover over-allotments
in the sale of the shares of Common Stock. To the extent such option is
exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares of Common Stock as it was obligated to purchase pursuant to the
Underwriting Agreement.

The Company and the Selling Shareholders have been advised by the
Representatives that the Underwriters propose to offer the shares of the Common
Stock to the public initially at the public offering price set forth on the
cover page of this Prospectus and, through the Representatives, to certain
dealers at such price less a concession of $0.66 per share, and the Underwriters
and such dealers may allow a discount of $0.10 per share on sales to certain
other dealers. After the initial public offering, the public offering price and
concession and discount to dealers may be changed by the Representatives.

The Company, its officers and directors, the Selling Shareholders and
certain other shareholders have agreed not to offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file or cause to be
filed with the Commission a registration statement under the Securities Act
relating to, any shares of the Common Stock or securities or other rights
convertible into or exchangeable or exercisable for any shares of Common Stock
or publicly disclose an intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation, for a period of 120 days after the date of this Prospectus.

424B1 38th Page of 69 TOC 1st Previous Next ↓Bottom Just 38th

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or contribute to payments which the Underwriters may be required
to make in respect thereof.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions,
penalty bids and "passive" market making in accordance with Regulation M under
the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase shares of Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of shares of Common Stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the Representatives to reclaim a selling
concession from a syndicate member when the shares of Common Stock originally
sold by such syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. In "passive" market making, market makers in
the Common Stock who are Underwriters or prospective underwriters may, subject
to certain limitations, make bids for or purchases of shares of Common Stock
until the time, if any, at which a stabilizing bid is made. Such stabilizing
transactions, syndicate covering transactions and penalty bids may cause the
price of the shares of Common Stock to be higher than it would otherwise be in
the absence of such transactions. These transactions may be effected on the NNM
or otherwise and, if commenced, may be discontinued at any time.

Credit Suisse First Boston Corporation has provided financial advisory,
investment banking and commercial banking services to the Company in the past
and may in the future provide such services, for which Credit Suisse First
Boston Corporation has received and will receive customary compensation. Credit
Suisse First Boston, an affiliate of Credit Suisse First Boston Corporation, is
a lender under the Restated Bank Credit Agreement and will receive customary
fees in connection therewith. Alan H. Howard, a director of the Company, is a
Managing Director of Credit Suisse First Boston Corporation.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Common Stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company and the
Selling Shareholders prepare and file a prospectus with the securities
regulatory authorities in each province where trades of the Common Stock are
effected. Accordingly, any resale of the Common Stock in Canada must be made in
accordance with applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made in accordance
with available statutory exemptions or pursuant to a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the Common Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company, the Selling
Shareholders and the dealer from whom such purchase confirmation is received
that (i) such purchaser is entitled under applicable provincial securities laws
to purchase such Common Stock without the benefit of a prospectus qualified
under such securities laws, (ii) where required by law, such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has reviewed
the text above under "Resale Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.

424B1 39th Page of 69 TOC 1st Previous Next ↓Bottom Just 39th

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers, as well as the experts named
herein and the Selling Shareholders, may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against the issuer or such persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Common Stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Common Stock acquired by such purchaser pursuant to the Offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from the Company. Only one
such report must be filed in respect of Common Stock acquired on the same date
and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Common Stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the Common
Stock in their particular circumstances and with respect to the eligibility of
the Common Stock for investment by the purchaser under relevant Canadian
legislation.

424B1 40th Page of 69 TOC 1st Previous Next ↓Bottom Just 40th

CERTAIN U.S. FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock
applicable to a beneficial owner thereof that is a "Non-U.S. Holder." A
"Non-U.S. Holder" is a person or entity other than (i) a citizen or resident of
the United States, (ii) a corporation or partnership created or organized in or
under the laws of the United States or of any state, (iii) an estate the income
of which is subject to U.S. federal income tax, regardless of its source, or
(iv) a trust if (a) a court within the United States is able to exercise primary
supervision over the administration of the trust and (b) one or more United
States persons have the authority to control all substantial decisions of the
trust.

An individual may, subject to certain exceptions, be deemed to be a
resident alien (as opposed to a non-resident alien) by virtue of being present
in the United States at least 31 days in the calendar year and for an aggregate
of at least 183 days during a three-year period that includes the current
calendar year (counting for such purposes all of the days present in the current
year, one-third of the days present in the immediately preceding year, and
one-sixth of the days present in the second preceding year). Resident aliens are
subject to U.S. federal tax as if they were U.S. citizens and, thus, are not
Non-U.S. Holders for purposes of this discussion.

This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), existing and proposed regulations promulgated thereunder and
administrative and judicial interpretations thereof as of the date hereof, all
of which are subject to change, including changes with retroactive effect. This
discussion does not address all aspects of U.S. federal income and estate
taxation that may be important to Non-U.S. Holders in light of their particular
circumstances (including tax consequences applicable to Non-U.S. Holders that
are, or hold interests in Common Stock through, partnerships or other fiscally
transparent entities) and does not address United States state and local or
non-United States tax consequences. Prospective Non-U.S. Holders should consult
their own tax advisors with respect to the particular U.S. federal income and
estate tax consequences to them of owning and disposing of Common Stock, as well
as the tax consequences arising under the laws of any other taxing jurisdiction.

DIVIDENDS

Subject to the discussion below, dividends, if any, paid to a Non-U.S.
Holder of Common Stock generally will be subject to United States withholding
tax at a rate of 30% of the gross amount of the dividend or such lower rate as
may be specified by an applicable income tax treaty. Non-U.S. Holders (and in
the case of Non-U.S. Holders that are treated as partnerships or other fiscally
transparent entities, partners, shareholders or other beneficiaries of such
Non-U.S. Holders) may be required to satisfy certain certification requirements
and provide certain information in order to claim treaty benefits. Special rules
regarding the availability of treaty benefits apply with respect to entities
that are treated as partnerships or other fiscally transparent entities for U.S.
federal income tax purposes but treated as corporations for purposes of the tax
laws of an applicable treaty country (or, conversely, treated as corporations
for U.S. federal income tax purposes but treated as partnerships or other
fiscally transparent entities for purposes of the tax laws of an applicable
treaty country). Any such entities that hold Common Stock, and partners,
beneficiaries and shareholders of such entities, should consult their tax
advisors as to the applicability of such rules to their particular
circumstances.

Dividends paid to a Non-U.S. Holder that are either (i) effectively
connected with the Non-U.S. Holder's conduct of a trade or business within the
United States or (ii) if a tax treaty applies, attributable to a permanent
establishment maintained by the Non-U.S. Holder, will not be subject to the
withholding tax (provided in either case the Non-U.S. Holder files the
appropriate documentation with the Company or its Paying Agent), but, instead,
will be subject to regular U.S. federal income tax at the graduated rates in the
same manner as if the Non-U.S. Holder were a U.S. resident. In addition to such
graduated tax in the case of a Non-U.S. Holder that is a corporation,
effectively connected dividends or, if a tax treaty applies, dividends
attributable to a U.S. permanent establishment of the corporate Non-U.S. Holder,
may be subject to a "branch profits tax" which is imposed, under certain
circumstances, at a rate of 30% (or such lower rate as may be specified by an
applicable tax treaty) of the non-U.S. corporation's effectively connected
earnings and profits, subject to certain adjustments.

424B1 41st Page of 69 TOC 1st Previous Next ↓Bottom Just 41st

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to U.S. federal income tax
(and no tax will generally be withheld) with respect to gain realized on a sale
or other disposition of Common Stock unless (i) the gain is effectively
connected with a trade or business of such Non-U.S. Holder in the United States
or, if a tax treaty applies, attributable to a United States permanent
establishment of the Non-U.S. Holder, (ii) in the case of certain Non-U.S.
Holders who are nonresident alien individuals and hold the Common Stock as a
capital asset, such individuals are present in the United States for 183 or more
days in the taxable year of the sale or other disposition and certain other
conditions are met, (iii) the Non-U.S. Holder is subject to tax pursuant to the
provisions of the Code regarding the taxation of U.S. expatriates, or (iv) the
Company is or has been a "U.S. real property holding corporation" within the
meaning of the Code and the Non-U.S. Holder owned directly or pursuant to
certain attribution rules more than 5% of the Company's Common Stock (assuming
the Common Stock is regularly traded on an established securities market within
the meaning of the Code) at any time within the shorter of the five-year period
preceding such disposition or such Non-U.S. Holder's holding period. The Company
is not, and does not anticipate becoming, a U.S. real property holding
corporation.

If a Non-U.S. Holder who is an individual falls under clause (i) of the
preceding paragraph, he or she will, unless an applicable treaty provides
otherwise, be taxed on the net gain derived from the sale at regular graduated
U.S. federal income tax rates. If an individual Non-U.S. Holder falls under
clause (ii) of the preceding paragraph, he or she will be subject to a flat 30%
tax on the gain derived from the sale, which may be offset by certain United
States-source capital losses. If a Non-U.S. Holder that is a corporation falls
under clause (i) in the preceding paragraph, it will be taxed on the net gain
from the sale at regular graduated U.S. federal income tax rates and may be
subject to an additional branch profits tax at a rate of 30% (or such lower rate
as may be specified by an applicable tax treaty) on the non-U.S. corporation's
effectively connected earnings and profits, subject to certain adjustments.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING

Generally, the Company must report annually to the Internal Revenue Service
the amount of dividends paid to a Non-U.S. Holder and the amount, if any, of tax
withheld with respect to, such Non-U.S. Holder. A similar report is sent to the
Non-U.S. Holder. Pursuant to tax treaties or certain other agreements, the
Internal Revenue Service may make its reports available to tax authorities in
the recipient's country of residence.

Currently, United States backup withholding tax (which generally is a
withholding tax imposed at a rate of 31% on certain payments to persons that
fail to furnish the information required under the United States information
reporting requirements) will generally not apply to dividends paid on Common
Stock to a Non-U.S. Holder at an address outside the United States, unless the
payor has actual knowledge that the payee is a U.S. Holder. Backup withholding
tax generally will apply to dividends paid on Common Stock at addresses inside
the United States to Non-U.S. Holders who fail to provide certain identifying
information in the manner required.

In addition, information reporting and backup withholding imposed at a rate
of 31% will apply to the proceeds of a disposition of Common Stock paid to or
through a U.S. office of a broker unless the disposing holder, under penalties
of perjury, certifies as to its non-U.S. status or otherwise establishes an
exemption. Generally, U.S. information reporting and backup withholding will not
apply to a payment of disposition proceeds if the payment is made outside the
United States through a non-U.S. office of a non-U.S. broker. However, U.S.
information reporting requirements (but not backup withholding) will apply to a
payment of disposition proceeds outside the United States if the payment is made
through an office outside the United States of a broker that is (i) a U.S.
person, (ii) a foreign person which derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United States or
(iii) a "controlled foreign corporation" for U.S. federal income tax purposes,
unless the broker maintains documentary evidence that the holder is a Non-U.S.
Holder and certain other conditions are met, or the holder otherwise establishes
an exemption.

Recently adopted United States Treasury regulations, which generally are
effective for payments made after December 31, 1998, subject to certain
transition rules, alter the foregoing rules in certain respects. Among other
things, such regulations provide certain presumptions under which a Non-U.S.
Holder is subject to backup

424B1 42nd Page of 69 TOC 1st Previous Next ↓Bottom Just 42nd

withholding at the rate of 31% and information reporting unless the Company
receives certification from the holder of non-U.S. status. Depending on the
circumstances, this certification will need to be provided (i) directly by the
Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder that is treated as a
partnership or other fiscally transparent entity, by the partners, shareholders
or other beneficiaries of such entity, or (iii) by certain qualified financial
institutions or other qualified entities on behalf of the Non-U.S. Holder.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the Internal
Revenue Service.

FEDERAL ESTATE TAX

An individual holder who is not a citizen or resident (as defined for U.S.
federal estate tax purposes) of the United States and at the time of death is
treated as the owner of, or has made certain lifetime transfers of, an interest
in the Common Stock will be required to include the value thereof in his gross
estate for U.S. federal estate tax purposes, and may be subject to U.S. federal
estate tax unless an applicable estate tax treaty provides otherwise.

424B1 43rd Page of 69 TOC 1st Previous Next ↓Bottom Just 43rd

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company and the Selling Shareholders by Paul, Weiss, Rifkind, Wharton &
Garrison, New York, New York. Certain legal matters relating to the Offering
will be passed upon for the Underwriters by Dewey Ballantine LLP, New York, New
York.

EXPERTS

The financial statements of the Company as of January 31, 1997 and 1996 and
for each of the three years in the period ended January 31, 1997 included in
this Prospectus have been so included in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at its regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can be obtained at
prescribed rates upon request from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission, including the Company. The address of the Commission's web
site is http://www.sec.gov. The Company's Common Stock is listed on the Nasdaq
National Market. Reports, proxy statements and other information concerning the
Company may be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Common
Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain portions of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock, reference is hereby made to such
Registration Statement, including the exhibits filed therewith. Statements
contained in this Prospectus as to the contents of any contract, agreement or
other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is hereby made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. The Registration Statement
can be obtained by mail from, or inspected and copied at, the public reference
facilities maintained by the Commission as provided in the prior paragraph.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which have been filed by the Company (File No.
0-22378) with the Commission, are hereby incorporated by reference:

(1) The Company's Annual Report on Form 10-K for the year ended
January 31, 1997.

(2) The Company's Notice of Annual Meeting of Shareholders and Proxy
Statement dated May 23, 1997.

(3) The Company's Quarterly Reports on Form 10-Q for the quarters
ended April 30, 1997 and July 31, 1997.

(4) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated September 9, 1993.

424B1 44th Page of 69 TOC 1st Previous Next ↓Bottom Just 44th

All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
termination or completion of the Offering shall be deemed to be incorporated
herein by reference and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such prior
statement. Any such statements so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents referred to above which have been
incorporated by reference in this Prospectus (not including exhibits to such
documents unless such exhibits are specifically incorporated by reference into
the information that the Prospectus incorporates). Requests for such documents
may be made by writing to Movado Group, Inc., 125 Chubb Avenue, Lyndhurst, New
Jersey 07071 (Attention: Timothy F. Michno, Esq.) or by calling (201) 460-4800.

424B1 45th Page of 69 TOC 1st Previous Next ↓Bottom Just 45th

MOVADO GROUP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

[Enlarge/Download Table]

PAGE
----

Report of Independent Accountants..................................................... F-2
Audited Financial Statements:
Consolidated Statements of Income for the years ended January 31, 1997, 1996 and
1995............................................................................. F-3
Consolidated Balance Sheets at January 31, 1997 and 1996............................ F-4
Consolidated Statements of Cash Flows for the years ended January 31, 1997, 1996 and
1995............................................................................. F-5
Consolidated Statements of Changes in Shareholders' Equity for the years ended
January 31, 1997, 1996 and 1995.................................................. F-6
Notes to Consolidated Financial Statements.......................................... F-7
Unaudited Interim Financial Statements:
Consolidated Statements of Income for the six months ended July 31, 1997 and 1996... F-19
Consolidated Balance Sheets at July 31, 1997 and 1996............................... F-20
Consolidated Statements of Cash Flows for the six months ended July 31, 1997 and
1996............................................................................. F-21
Notes to Consolidated Financial Statements.......................................... F-22

F-1

424B1 46th Page of 69 TOC 1st Previous Next ↓Bottom Just 46th

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of Movado Group, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of changes in shareholders'
equity present fairly, in all material respects, the financial position of
Movado Group, Inc. and its subsidiaries at January 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended January 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

Morristown, New Jersey
March 24, 1997, except as to Note 16,
which is as of September 29, 1997

F-2

424B1 47th Page of 69 TOC 1st Previous Next ↓Bottom Just 47th

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

[Enlarge/Download Table]

FISCAL YEAR ENDED JANUARY 31,
------------------------------
1997 1996 1995
-------- -------- --------

Net sales...................................................... $215,107 $185,867 $160,853
Cost and expenses:
Cost of sales................................................ 95,031 83,502 75,871
Selling, general and administrative.......................... 99,657 84,315 69,243
-------- -------- --------
194,688 167,817 145,114
-------- -------- --------
Operating income............................................... 20,419 18,050 15,739
Net interest expense........................................... 4,874 4,450 4,307
-------- -------- --------
Income before income taxes..................................... 15,545 13,600 11,432
Provision for (benefit from) income taxes ..................... 3,853 3,876 (2,512)
-------- -------- --------
Net income..................................................... $ 11,692 $ 9,724 $ 13,944
======== ======== ========
Earnings per share............................................. $ 1.04 $ 0.86 $ 1.24
======== ======== ========
Shares used in per share computation........................... 11,273 11,263 11,250
======== ======== ========

See Notes to Consolidated Financial Statements

F-3

424B1 48th Page of 69 TOC 1st Previous Next ↓Bottom Just 48th

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)

[Enlarge/Download Table]

JANUARY 31,
---------------------
1997 1996
-------- --------

ASSETS
Current assets:
Cash................................................................. $ 4,885 $ 3,829
Trade receivables, net............................................... 75,688 75,335
Inventories.......................................................... 87,177 89,101
Other................................................................ 16,914 12,521
-------- --------
Total current assets......................................... 184,664 180,786
Plant, property and equipment, net..................................... 15,066 11,794
Other assets........................................................... 8,713 7,800
-------- --------
Total Assets........................................................... $208,443 $200,380
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Loans payable to banks............................................... $ 7,778 $ 8,782
Current portion of long-term debt.................................... 5,000 --
Accounts payable..................................................... 25,297 22,042
Accrued liabilities.................................................. 13,188 9,289
Deferred and current taxes payable................................... 6,711 7,994
-------- --------
Total current liabilities.................................... 57,974 48,107
Long-term debt......................................................... 40,000 40,000
Deferred and noncurrent foreign income taxes........................... 3,477 3,860
Other liabilities...................................................... 3,122 3,572
Shareholders' equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no
shares issued..................................................... -- --
Common Stock, $0.01 par value, 20,000,000 shares authorized;
6,459,761 and 6,424,893 shares issued, respectively............... 65 64
Class A Common Stock, $0.01 par value, 10,000,000 shares authorized;
4,847,478 and 4,854,170 shares issued and outstanding,
respectively...................................................... 48 49
Capital in excess of par value....................................... 34,450 34,199
Retained earnings.................................................... 71,291 60,319
Cumulative translation adjustment.................................... (1,856) 10,338
Treasury Stock, 17,251 shares, at cost............................... (128) (128)
-------- --------
103,870 104,841
-------- --------
Commitments and contingencies (Note 11)
-------- --------
Total Liabilities and Shareholders' Equity............................. $208,443 $200,380
======== ========

See Notes to Consolidated Financial Statements

F-4

424B1 49th Page of 69 TOC 1st Previous Next ↓Bottom Just 49th

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

[Enlarge/Download Table]

FISCAL YEAR ENDED JANUARY 31,
---------------------------------
1997 1996 1995
-------- -------- -------

Cash flows from operating activities:
Net income................................................. $ 11,692 $ 9,724 $13,944
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization........................... 3,946 2,949 3,109
Deferred and noncurrent foreign income taxes............ 221 (373) (4,831)
Provision for losses on accounts receivable............. 1,917 1,115 867
Changes in current assets and liabilities:
Trade receivables..................................... (4,096) (10,607) (9,982)
Inventories........................................... (3,828) (2,836) (4,450)
Other current assets.................................. (14,163) (453) (4,484)
Accounts payable...................................... 5,174 1,318 10,392
Accrued liabilities................................... 4,301 481 (601)
Deferred and current taxes payable.................... (377) 2,299 4,174
Increase in other noncurrent assets..................... (1,285) (153) (1,337)
Increase in other noncurrent liabilities................ 253 414 23
-------- -------- -------
Net cash provided by operating activities.................. 3,755 3,878 6,824
-------- -------- -------
Cash flows from investing activities:
Capital expenditures....................................... (6,626) (2,025) (4,397)
Goodwill, trademarks and other intangibles................. (294) (278) (717)
-------- -------- -------
Net cash used in investing activities...................... (6,920) (2,303) (5,114)
-------- -------- -------
Cash flows from financing activities:
Net proceeds from (payment of) current borrowings under
lines of credit......................................... 5,335 (1,194) 1,235
Principal payments under capital leases.................... (389) (996) (869)
Exercise of stock options.................................. 212 214 --
Dividends paid............................................. (720) (599) (480)
Purchase of treasury stock................................. -- (128) --
-------- -------- -------
Net cash provided by (used in) financing activities........ 4,438 (2,703) (114)
-------- -------- -------
Effect of exchange rate changes on cash...................... (217) 61 147
Net increase (decrease) in cash.............................. 1,056 (1,067) 1,743
Cash at beginning of year.................................... 3,829 4,896 3,153
-------- -------- -------
Cash at end of year.......................................... $ 4,885 $ 3,829 $ 4,896
======== ======== =======

See Notes to Consolidated Financial Statements

F-5

424B1 50th Page of 69 TOC 1st Previous Next ↓Bottom Just 50th

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

[Enlarge/Download Table]

CLASS A CAPITAL IN CUMULATIVE
PREFERRED COMMON COMMON EXCESS OF RETAINED TRANSLATION TREASURY
STOCK STOCK STOCK PAR VALUE EARNINGS ADJUSTMENT STOCK
--------- ------ ------- ---------- -------- ----------- --------

Balance, January 31, 1994................... $ -- $ 32 $28 $ 34,009 $37,730 $ 659 $ --
Restatement for 5-for-4 stock split
effected
May 1, 1997 and 3-for-2 stock split
effected September 29, 1997............. 29 24 (53)
Net income................................ 13,944
Dividends ($0.043 per share).............. (480)
Translation Adjustment.................... 7,008
Conversion of Class A Common Stock to
Common Stock............................ 3 (3)
---- --- ---- ------- ------- -------- -----
Balance, January 31, 1995................... -- 64 49 33,956 51,194 7,667 --
Net income................................ 9,724
Dividends ($0.053 per share).............. (599)
Stock options exercised................... 214
Tax benefit from employees exercising
stock options........................... 29
Purchase of Treasury Stock................ (128)
Translation adjustment.................... 2,671
---- --- ---- ------- ------- -------- -----
Balance, January 31, 1996................... -- 64 49 34,199 60,319 10,338 (128)
Net income................................ 11,692
Dividends ($0.064 per share).............. (720)
Stock options exercised................... 212
Tax benefit from employees exercising
stock options........................... 39
Translation adjustment.................... (12,194)
Conversion of Class A Common Stock to
Common Stock............................ 1 (1)
---- --- ---- ------- ------- -------- -----
Balance, January 31, 1997................... $ -- $ 65 $48 $ 34,450 $71,291 $ (1,856) $ (128)
==== === ==== ======= ======= ======== =====

See Notes to Consolidated Financial Statements

F-6

424B1 51st Page of 69 TOC 1st Previous Next ↓Bottom Just 51st

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Movado Group is a designer, manufacturer and distributor of quality watches
with prominent brands in almost every price category comprising the watch
industry. The Company markets five distinctive brands of watches, Movado,
Concord, ESQ, Piaget and Corum, which compete in most segments of the watch
market.

The Company designs and manufactures Concord and Movado watches primarily
through its subsidiaries in Switzerland and the United States. ESQ watches are
manufactured to the Company's specifications using Swiss movements by
independent contractors located in the Far East. The Company is also the
exclusive distributor of Swiss-manufactured Piaget and Corum watches in the
United States, Canada, Central America and the Caribbean Islands. The Company
distributes its watch brands through its United States operations as well as
through sales subsidiaries in Canada, Hong Kong, Singapore and Switzerland and
through a number of independent distributors located in various countries
throughout the world.

In addition to its sales to trade customers and independent distributors,
Movado Group sells Movado watches and Piaget products directly to consumers in
its Company-operated Movado Design Store and its Piaget Boutique, respectively,
both of which are located on Fifth Avenue in New York City. Movado Group also
operates a number of Movado Company Stores throughout the United States, through
which the Company sells discontinued and sample merchandise.

Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries. Intercompany transactions and balances have been
eliminated.

Translation of foreign currency financial statements and foreign currency
transactions

The financial statements of the Company's international subsidiaries have
been translated into United States dollars by translating balance sheet accounts
at year end exchange rates and statement of operations accounts at average
exchange rates for the year. Foreign currency transaction gains and losses are
charged or credited to income as incurred. Foreign currency translation gains
and losses are reflected in the equity section of the Company's consolidated
balance sheet as cumulative translation adjustments.

Sales and trade receivables

The Company's trade customers include department stores, jewelry store
chains and independent jewelers. Movado and Concord watches are also marketed
through a network of independent distributors. Sales are recognized upon
shipment of products to trade customers. Accounts receivable are stated net of
allowances for doubtful accounts of $3,876,000 and $3,323,000 at January 31,
1997 and 1996, respectively. No individual trade customer, including trade
customers under common control, or international distributors account for 10% or
more of the Company's consolidated net sales.

The Company's concentrations of credit risk arise primarily from accounts
receivable related to trade customers during the peak selling seasons. The
Company has significant accounts receivable balances due from major department
store chains. The Company's results of operations could be materially adversely
affected in the event any of these customers or a group of these customers
defaulted on all or a significant portion of their obligation to the Company as
a result of financial difficulties.

F-7

424B1 52nd Page of 69 TOC 1st Previous Next ↓Bottom Just 52nd

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Inventories

Inventories are valued at the lower of cost or market. The cost of domestic
finished goods inventories is determined using the first-in, first-out (FIFO)
method. The costs of finished goods inventories held by overseas subsidiaries
and all component parts inventories are determined using average cost.

Plant, property and equipment

Plant, property and equipment at January 31, at cost, consists of the
following (in thousands):

[Download Table]

1997 1996
-------- --------

Furniture and equipment................................ $ 26,288 $ 23,195
Leasehold improvements................................. 8,662 6,306
-------- --------
34,950 29,501
Less: accumulated depreciation and amortization........ (19,884) (17,707)
-------- --------
$ 15,066 $ 11,794
======== ========

Depreciation of furniture and equipment is provided using the straight-line
method based on the estimated useful lives of assets which range from three to
10 years. Leasehold improvements are amortized using the straight-line method
over the lesser of the term of the lease or the estimated useful life of the
leasehold improvement.

Goodwill and other intangibles

Other intangible assets consist primarily of trademarks and are recorded at
cost. Trademarks are amortized over 10 years, except in the case of costs
associated with the Piaget and Corum trademarks, which are amortized over the
remaining terms of the Piaget and Corum distribution agreements. Goodwill is
amortized over 40 years. At January 31, 1997 and 1996, goodwill and other
intangible assets at cost were $5,065,000 and $5,043,000, respectively, and
related accumulated amortization of goodwill and other intangibles were
$2,385,000 and $2,188,000, respectively.

Advertising production costs

In fiscal 1996, the Company adopted a newly prescribed accounting guideline
which requires that production costs of an advertising campaign be expensed at
the commencement date of the advertising campaign. As a result of adopting this
new accounting pronouncement, the Company recorded at February 1, 1995 a one
time pre-tax charge of approximately $600,000 ($0.04 per share after tax) which
is included in selling, general and administrative expenses. Advertising
expenses for fiscal 1997, 1996 and 1995, amounted to $38.7 million, $33.0
million and $24.4 million, respectively.

Income taxes

The Company and its domestic subsidiaries file a consolidated federal
income tax return. Foreign income taxes have been provided based on the
applicable tax rates in each of the foreign countries in which the Company
operates. Certain Swiss income taxes are payable over several years; the portion
of these taxes not payable within one year is classified as noncurrent.
Noncurrent foreign income taxes included in the consolidated balance sheets at
January 31, 1997 and 1996 were $724,000 and $637,000, respectively.

Earnings per share

Earnings per share are based on the weighted average total number of shares
of Common Stock and Class A Common Stock outstanding during the periods
presented.

F-8

424B1 53rd Page of 69 TOC 1st Previous Next ↓Bottom Just 53rd

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Stock-based compensation

Stock-based compensation is recognized using the intrinsic value method.
For disclosure purposes, pro forma net income and earnings per share are
provided as if the fair value method had been applied.

Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2 -- INVENTORIES

Inventories consist of the following (in thousands):

[Download Table]

JANUARY 31,
-------------------
1997 1996
------- -------

Finished goods........................................... $53,497 $51,034
Work-in-process and component parts...................... 33,680 38,067
------- -------
$87,177 $89,101
======= =======

NOTE 3 -- BANK CREDIT ARRANGEMENTS AND LINES OF CREDIT

In fiscal 1997, the Company entered into revised agreements with certain
domestic banks providing for $35,000,000 of unsecured demand borrowings, to be
used primarily for seasonal working capital requirements. Borrowings under these
lines bear interest at the prime commercial lending rate or LIBOR plus 1% or the
certificate of deposit rate plus 1.25%. Borrowings may be made in either U.S.
dollars or Swiss francs. These lines expire in the third quarter of fiscal 1998.

The Company's Swiss subsidiaries maintain secured and unsecured lines of
credit with Swiss banks, a majority of which have an unspecified duration.
Available credit under these lines totaled 20,500,000 Swiss francs, with dollar
equivalents of approximately $14,437,000 and $16,635,000 at January 31, 1997 and
1996, respectively. The Swiss franc credit lines included a line of 1,500,000
Swiss francs for the purchase of gold, borrowings which are secured by gold
inventory. As of January 31, 1997 and 1996, gold inventory valued at $0 and
$827,000, respectively, was pledged as collateral for borrowings under this line
of credit. One subsidiary's credit line contains a covenant requiring
maintenance of retained earnings above a specified minimum level. This
subsidiary was in compliance with this covenant at January 31, 1997 and 1996.
There are no other restrictions on transfers in the form of dividends, loans or
advances to the Company by its foreign subsidiaries.

Outstanding borrowings against the Company's aggregate demand lines of
credit were $7,746,000 and $8,782,000 at January 31, 1997 and 1996,
respectively. Aggregate maximum and average monthly outstanding borrowings
against the Company's lines of credit and related weighted average interest
rates during fiscal 1997, 1996 and 1995 were as follows (in thousands):

[Download Table]

FISCAL YEAR ENDED JANUARY 31,
-------------------------------
1997 1996 1995
------- ------- -------

Maximum borrowings............................ $56,143 $41,032 $31,300
Average monthly borrowings.................... $34,302 $28,940 $22,139
Weighted average interest rate................ 5.9% 6.0% 6.2%

Weighted average interest rates were computed based on average month-end
outstanding borrowings and applicable average month-end interest rates.

F-9

424B1 54th Page of 69 TOC 1st Previous Next ↓Bottom Just 54th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On January 31, 1996, the Company entered into a three year revolving credit
agreement with its domestic banks which provides the Company with a $20.0
million unsecured revolving line of credit. The agreement provides for various
rate options including the federal funds rate plus a fixed rate, the prime rate
or a fixed rate plus the LIBOR rate. The Company pays a facility fee on the
unused portion of the credit facility. The agreement also contains certain
financial covenants based on fixed coverage ratios, leverage ratios and
restrictions which limit the Company on the sale, transfer or distribution of
corporate assets, including dividends. The Company was in compliance with these
restrictions and covenants at January 31, 1997. The amount of $5.0 million
outstanding at January 31, 1997 is included in long-term debt. There were no
amounts outstanding at January 31, 1996.

NOTE 4 -- LONG-TERM DEBT

Long-term senior debt outstanding at January 31, 1997 and 1996 consisted of
$35,000,000 and $40,000,000, respectively, of Senior Notes due January 31, 2005
which were issued in a private placement completed in fiscal 1994. The Senior
Notes bear interest at 6.56% per annum, payable semiannually on July 31 and
January 31, and are subject to mandatory annual prepayments of $5,000,000
commencing January 31, 1998 and accordingly such amount has been classified as a
current liability in fiscal 1997. The Company has the option to prepay amounts
due to holders of the Senior Notes at 100% of the principal plus a "make-whole"
premium and accrued interest. The Note Agreement contains certain restrictions
and covenants which generally require the maintenance of a minimum net worth,
limit the amount of additional secured debt the Company can incur and limit the
sale, transfer or distribution of corporate assets including dividends. The
Company was in compliance with these restrictions and covenants at January 31,
1997.

Included in long-term debt at January 31, 1997 was $5.0 million related to
the Company's revolving credit agreement as described in Note 3.

NOTE 5 -- FOREIGN CURRENCY MANAGEMENT

A substantial portion of the Company's watches and watch components are
sourced from affiliated and nonaffiliated suppliers in Switzerland. A
significant strengthening of the Swiss franc against currencies of other
countries in which the Company conducts sales activities increases the Company's
product cost. This may adversely impact gross margins to the extent the Company
is unsuccessful in hedging against changes in the currency exchange rates or
higher product costs cannot be recovered through price increases in local
markets. Significant fluctuations in the Swiss franc - U.S. dollar exchange rate
can also have a material impact on the U.S. dollar value of the net assets of
the Company's wholly-owned Swiss subsidiaries.

The Company hedges against foreign currency exposure using only forward
exchange contracts, purchased foreign currency options and open market purchases
to cover identifiable inventory purchase commitments and equity invested in its
international subsidiaries. Due to production lead times, the Company hedges
identified inventory purchase commitments generally over a period of up to 18
months.

The Company has established strict counterparty credit guidelines and only
enters into foreign currency transactions with financial institutions of
investment grade or better. At January 31, 1997 and 1996, the Company had
foreign currency trading lines totaling $200,000,000 with various banks. To
minimize the concentration of credit risk, the Company enters into hedging
transactions with each of these banks. As a result, the Company considers the
risk of counterparty default to be minimal.

F-10

424B1 55th Page of 69 TOC 1st Previous Next ↓Bottom Just 55th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table presents the aggregate contract amounts and fair
values, based on dealer quoted prices, of the Company's financial instruments
outstanding at January 31, 1997 and 1996. All financial instruments included
below mature within one year and were held for hedging purposes only. Foreign
currency forward amounts (in thousands) consist primarily of U.S. dollar - Swiss
franc contracts.

[Enlarge/Download Table]

AS OF JANUARY 31,
-----------------------------------------------
1997 1996
-------------------- --------------------
CONTRACT FAIR CONTRACT FAIR
AMOUNTS VALUES AMOUNTS VALUES
-------- ------- -------- -------

Foreign Currency Forward Amounts.......... $ 56,176 $50,041 $ 78,528 $77,065
Purchased Options......................... $ 7,450 $ 0 $ 40,751 $ 310

The contract amounts of these foreign currency forward amounts and
purchased options do not necessarily represent amounts exchanged by the parties
and, therefore, are not a direct measure of the exposure of the Company through
its use of these financial instruments. The amounts exchanged are calculated on
the basis of the contract amounts and the other terms of the financial
instruments, which relate to exchange rates. As of January 31, 1997 and 1996,
the receivable from and payable to banks recorded in current assets and other
current liabilities, respectively, associated with closed contract positions was
$247,000 and $289,000, respectively.

The estimated fair values of these foreign currency forward amounts and
purchased options used to hedge the Company's risks will fluctuate over time.
These fair value amounts should not be viewed in isolation, but rather in
relation to the fair values of the underlying hedged transactions and
investments and the Company's overall exposure to fluctuations in foreign
exchange rates.

Gains and losses from and premiums paid for forward or option transactions
that hedge inventory purchase commitments are included in the carrying cost of
inventory and are recognized in cost of sales upon sale of the inventory. Net
deferred charges from hedging amounted to $640,000 and $403,000 at January 31,
1997 and 1996, respectively, and were included in other current assets on the
accompanying balance sheet.

Gains and losses on financial instruments that are designated and effective
as hedges of net investments in international operations are included in
shareholders' equity in the cumulative translation adjustment account.

NOTE 6 -- FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS

The estimated fair value of the Company's Senior Notes at January 31, 1997
approximated the carrying value of the notes as the difference between
market-based interest rates at the balance sheet date and the 6.56% fixed rate
of the notes was minimal. The fair value of the Company's other monetary assets
and liabilities approximate carrying value due to the relatively short-term
nature of these items.

F-11

424B1 56th Page of 69 TOC 1st Previous Next ↓Bottom Just 56th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7 -- INCOME TAXES

The provision for (benefit from) income taxes for the fiscal years ended
January 31, 1997, 1996 and 1995 consist of the following components (in
thousands):

[Download Table]

1997 1996 1995
------ ------ -------

Current:
U.S. Federal........................................... $1,667 $1,609 $ 270
U.S. State and Local................................... 477 460 195
Non-U.S................................................ 860 1,430 (601)
------ ------ -------
3,004 3,499 (136)
------ ------ -------
Noncurrent:
U.S. Federal........................................... -- -- --
U.S. State and Local................................... -- -- --
Non-U.S................................................ 845 800 64
------ ------ -------
845 800 64
------ ------ -------
Deferred:
U.S. Federal........................................... -- 450 (2,400)
U.S. State and Local................................... -- (350) --
Non-U.S................................................ 4 (523) (40)
------ ------ -------
4 (423) (2,440)
------ ------ -------
Provision for (benefit from) income taxes................ $3,853 $3,876 $(2,512)
====== ====== =======

During fiscal 1997, there were no material changes in the Company's
deferred tax asset and liability accounts. Taxes were provided for at a rate of
24.8% and 28.5% for fiscal 1997 and 1996, respectively. The reduction in the
consolidated tax rate is predominantly due to higher earnings in lower tax
jurisdictions.

The Company's deferred federal U.S. tax charge for the year ended January
31, 1996 principally resulted from the utilization of federal domestic net
operating loss and Alternative Minimum Tax (AMT) credit carryforwards. The
Company's state and local deferred tax benefit results from the realization of
deferred state and local tax benefits. The Company's deferred U.S. federal tax
benefit for the year ended January 31, 1995 principally resulted from the
reversal of valuation allowances related to deferred tax assets for domestic net
operating loss carryforwards, AMT credit carryforwards and future domestic
income tax deductions. As required under Statement of Financial Accounting
Standards No. 109, these allowances are to be reversed when the Company believes
that the related tax benefits are more likely than not to be realized. The
reversal of the valuation allowances coincided with the return of U.S.
operations to profitability due not only to growth in the domestic business but
also to a substantial reduction in interest expense as a result of the Company's
refinancing completed in fiscal 1994. The Company's current benefit for foreign
taxes in fiscal 1995 was primarily attributable to a favorable impact from Swiss
Cantonal tax law changes.

The deferred U.S. federal tax benefit for the year ended January 31, 1995
represents a portion of the tax effect of U.S. net operating loss carryforwards
and future tax deductions which mainly arose in prior years and for which a 100%
valuation allowance had been recorded. The reduction in the valuation allowance
was primarily due to the fiscal 1995 refinancing which management believed would
result in the realization of at least a portion of its accumulated deferred tax
benefits due to expected interest savings in the U.S.

Deferred income taxes reflect the tax effect of temporary differences
between the amount of assets and liabilities recognized for financial reporting
purposes and such amounts recognized for tax purposes. Deferred income taxes
have been classified as current or noncurrent on the consolidated balance sheets
based on the

F-12

424B1 57th Page of 69 TOC 1st Previous Next ↓Bottom Just 57th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

underlying temporary differences and the expected due dates of taxes payable
upon reversal. Significant components of the Company's deferred income tax
assets and liabilities for the fiscal year ended January 31, 1997 consist of the
following (in thousands):

[Enlarge/Download Table]

DEFERRED TAX
---------------------
ASSETS LIABILITIES
------- -----------

Operating loss carryforwards....................................... $ 2,357 $ --
Rent accrual....................................................... 650 --
Inventory reserve.................................................. 631 5,091
Receivable allowance............................................... 1,022 551
Depreciation/amortization.......................................... 797 53
Other.............................................................. 523 308
------ ------
5,980 6,003
Valuation allowance................................................ (2,580) --
------ ------
Total.............................................................. $ 3,400 $ 6,003
====== ======

As of January 31, 1997, the Company had foreign net operating loss
carryforwards of approximately $5,500,000 which are available to offset taxable
income in future years. Additionally, the Company has domestic capital loss
carryforwards of approximately $260,000 which expire in fiscal 1998. As of
January 31, 1997, the Company continued to maintain a 100% valuation allowance
with respect to the tax benefit of foreign net operating loss carryforwards. The
Company has not recorded a deferred tax asset related to its capital loss
carryforwards due to uncertainty as to its realization. Management is continuing
to evaluate the appropriate level of allowance based on future operating results
and changes in circumstances.

The provision for (benefit from) income taxes differs from the amount
determined by applying the U.S. federal statutory rate as follows (in
thousands):

[Enlarge/Download Table]

FISCAL YEAR ENDED JANUARY
31,
---------------------------
1997 1996 1995
------- ------- -------

Provision for income taxes at the U.S. statutory rate...... $ 5,441 $ 4,760 $ 3,887
Realization of capital and operating loss carryforwards.... -- (177) (1,561)
Recognition of deferred tax asset.......................... -- -- (2,400)
Lower effective foreign income tax rate.................... (2,369) (1,215) (3,003)
Tax provided on repatriated earnings of foreign
subsidiaries............................................. 308 328 300
State and local taxes, net of federal benefit.............. 315 73 195
Other...................................................... 158 107 70
------- ------- -------
$ 3,853 $ 3,876 $(2,512)
======= ======= =======

No provision has been made for taxes on foreign subsidiaries' undistributed
earnings of approximately $84,000,000 at January 31, 1997, as those earnings are
intended to be reinvested. As a result of various tax planning alternatives
available to the Company, it is not practical to estimate the amount of tax, if
any, that might be payable on the eventual remittance of such earnings. On
remittance, certain withholding taxes would be imposed which might be available
to offset a U.S. tax liability, if any. In the event all undistributed earnings
as of January 31, 1997 were remitted, approximately $4,170,000 of withholding
taxes would be imposed.

NOTE 8 -- OTHER ASSETS

In fiscal 1996, the Company entered into an agreement with a trust which
owns an insurance policy issued on the lives of the Company's Chairman and Chief
Executive Officer and his spouse. Under that agreement the

F-13

424B1 58th Page of 69 TOC 1st Previous Next ↓Bottom Just 58th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

trust has assigned the insurance policy to the Company as collateral to secure
repayment by the trust of interest free loans to be made by the Company in
amounts sufficient for the trust to pay the premiums on the insurance policy
($740,000 per annum). Under the agreement, the trust will repay the loans from
the proceeds of the policy. The Company had loaned approximately $879,000 and
$199,000 under this agreement at January 31, 1997 and 1996, respectively.

NOTE 9 -- OTHER LIABILITIES

Other liabilities include notes payable to employees of $414,000 as of
January 31, 1997 and 1996, respectively, issued in connection with redemption of
all 4,664 outstanding shares of the Company's former Class B (Non-Voting) Common
Stock. The redemption was effective July 31, 1993.

NOTE 10 -- RESTRUCTURING CHARGE

During fiscal 1997, the Company signed a distribution agreement with
Junghans Uhren GmbH to distribute Movado watches in Germany. As a result of this
agreement, the Company closed its German sales office and recorded a charge of
approximately $450,000, included in selling, general and administrative
expenses, to cover severance and other costs to close the operation. Most of
these costs will be paid in the first quarter of fiscal 1998.

NOTE 11 -- LEASES, COMMITMENTS AND CONTINGENCIES

Rent expense for equipment and distribution, factory and office facilities
held under operating leases was approximately $4,270,000, $3,274,000 and
$3,384,000 in fiscal 1997, 1996 and 1995, respectively. Minimum annual rentals
at January 31, 1997 under noncancelable operating leases, which do not include
escalations that will be based on increases in real estate taxes and operating
costs, are as follows (in thousands):

[Download Table]

FISCAL YEAR ENDING JANUARY 31,
---------------------------------------------------

1998............................................... $ 4,807
1999............................................... 4,610
2000............................................... 4,177
2001............................................... 4,065
2002............................................... 3,925
2003 and thereafter................................ 9,259
-------
$30,843
=======

The Company has entered into capital leases to finance the cost of
enhancing its management information systems in the United States and
Switzerland. The gross value of computer equipment recorded under capital leases
was $3,848,000 and $3,631,000 as of January 31, 1997 and 1996, respectively.
Accumulated depreciation of computer equipment recorded under capital leases was
$2,421,000 and $1,959,000 as of January 31, 1997 and 1996, respectively.

F-14

424B1 59th Page of 69 TOC 1st Previous Next ↓Bottom Just 59th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Future minimum lease payments for equipment under capital leases at January
31, 1997 are as follows (in thousands):

[Download Table]

YEAR ENDING JANUARY 31,
-----------------------------------------------------

1998................................................. $ 183
1999................................................. 230
-----
Total minimum lease obligations...................... 413
Less interest........................................ (41)
-----
Present value of minimum lease obligations........... 372
Less current portion................................. (156)
-----
Net amount due after one year........................ $ 216
=====

Due to the nature of its business as a luxury consumer goods distributor,
the Company is exposed to various commercial losses. The Company believes it is
adequately insured against such losses.

NOTE 12 -- EMPLOYEE BENEFIT PLANS

Prior to fiscal 1995, the Company maintained two primary benefit plans for
its domestic employees: a noncontributory Profit Sharing Plan and an Employee
Savings Plan under Section 401(k) of the Internal Revenue Code. Company
contributions to the Profit Sharing Plan were at the discretion of the Board of
Directors and no such contributions were made in fiscal 1997, 1996 and 1995.
Company contributions and expenses of administering the Employee Savings Plan
amounted to $127,000, $106,000 and $84,000 in fiscal 1997, 1996 and 1995,
respectively.

During fiscal 1995, the Company merged its Profit Sharing Plan with and
into the Employee Savings Plan and transferred participants' assets accumulated
under the Profit Sharing Plan to the Employee Savings Plan. The merged Plan
retains the characteristics of the former Employee Savings Plan.

Effective June 1, 1995, the Company adopted a defined contribution
supplemental executive retirement plan ("SERP"). The SERP provides eligible
executives with supplemental pension benefits in addition to amounts received
under the Company's other retirement plan. The Company makes a matching
contribution which vests equally over five years. During fiscal 1997 and 1996,
the Company recorded expenses related to the SERP of approximately $138,000 and
$42,000, respectively.

On September 23, 1994, the Company entered into a Death and Disability
Benefit Plan agreement with the Company's Chairman and Chief Executive Officer.
Under the terms of the agreement, in the event of the Chairman's death or
disability, the Company is required to make an annual benefit payment of
approximately $300,000 to his spouse for the lesser of 10 years or her remaining
lifetime. Neither the agreement nor the benefits payable thereunder are
assignable and no benefits are payable to the estates or heirs of the Chairman
or his spouse. Results of operations include an actuarially determined charge
related to this plan of approximately $85,000 and $78,000 for fiscal 1997 and
1996, respectively.

Effective concurrently with the consummation of the Company's public
offering in the fourth quarter of fiscal 1994, the Board of Directors and the
shareholders of the Company approved the adoption of the Movado Group, Inc. 1993
Employee Stock Option Plan (the "Employee Stock Option Plan") for the benefit of
certain officers, directors and key employees of the Company. The Employee Stock
Option Plan was amended in fiscal 1997 and restated as the Movado Group, Inc.
1996 Stock Incentive Plan (the "Plan"). Under the Plan the Compensation
Committee of the Board of Directors, which is comprised of three outside
directors, has the authority to grant incentive stock options and nonqualified
stock options to purchase, as well as stock appreciation rights and stock
awards, up to 1,500,000 shares of Common Stock. Options granted to participants
under the Plan become exercisable in equal installments on the first through
fifth anniversaries of the date of grant

F-15

424B1 60th Page of 69 TOC 1st Previous Next ↓Bottom Just 60th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and remain exercisable until the tenth anniversary of the date of grant. The
option price may not be less than the fair market value of the stock at the time
the options are granted.

Transactions in stock options under the Plan since fiscal 1995 are
summarized as follows:

[Enlarge/Download Table]

OPTIONS
OUTSTANDING PRICE EXERCISABLE
OPTIONS PER SHARE OPTIONS
----------- --------- -----------

January 31, 1994.................................. 498,750 $7.47
Options granted................................... 28,125 6.82
Options that became exercisable................... 7.47 77,063
Options terminated................................ (113,437) 7.47
January 31, 1995.................................. 413,438 7.41 77,063
Options granted................................... 200,625 7.46
Options that became exercisable................... 67,500
Options exercised................................. (28,500) 7.47
Options terminated................................ (7,500) 7.47
January 31, 1996.................................. 578,063 7.43 144,563
Options granted................................... 429,375 10.98
Options that became exercisable................... 116,287
Options exercised................................. (36,750) 7.47
Options terminated................................ (14,813) 7.47
January 31, 1997.................................. 955,875 $9.02 260,850

At January 31, 1997 and 1996, 513,371 and 330,938 options to purchase
shares of Common Stock were available for additional grants, respectively.
Options exercisable at January 31, 1997 had a weighted average price of $7.44
per share.

The weighted-average fair value of each option grant estimated on the date
of grant using the Black-Scholes option-pricing model is $3.47 and $2.51 per
share in fiscal 1997 and 1996, respectively. The following weighted-average
assumptions were used for grants in both 1997 and 1996: dividend yield of 2% for
all years; expected volatility of 26%, risk-free interest rates of 5.6% and 6.3%
for fiscal 1997 and 1996, respectively, and expected lives of seven years.

The Company applies APB Opinion 25 and related interpretations in
accounting for its plans. Accordingly, no compensation cost has been recognized
for the Plan.

Had compensation cost for the Company's fiscal 1997 and 1996 grants for
stock-based compensation plans been determined based on the fair value at the
grant dates and recognized ratably over the vesting period, the Company's net
income and net income per common share for fiscal 1997 and 1996 would
approximate the pro forma amounts below (in thousands, except per share data):

[Enlarge/Download Table]

1997 1996
-------------------------- --------------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- ---------- ----------- ----------

Net Income......................... $11,692 $ 11,392 $ 9,724 $9,651
Net Income per common share........ $ 1.04 $ 1.01 $ 0.86 $ 0.86

The pro forma impact takes into account options granted since February 1,
1995 and is likely to increase in future years as additional options are granted
and amortized ratably over the vesting period.

F-16

424B1 61st Page of 69 TOC 1st Previous Next ↓Bottom Just 61st

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13 -- GEOGRAPHIC AREAS

The table below provides information pertaining to the Company's operations
in different geographic areas. For purposes of discussion, the Company divides
its business into two major geographic segments: "domestic", which includes the
results of the Company's United States and Canadian operations, and
"international", which includes the results of all other Company operations. The
Company's international operations are principally conducted in Europe. The
Company's international assets are substantially located in Europe. Other
international operations contributed less than 10% of consolidated net sales and
constituted less than 10% of consolidated total assets for all periods presented
(in thousands).

[Enlarge/Download Table]

DOMESTIC INTERNATIONAL ELIMINATIONS CONSOLIDATED
-------- ------------- ----------- ------------

FISCAL YEAR 1997:
Revenue from sales to unaffiliated customers...... $175,404 $ 39,703 $ -- $215,107
Intercompany sales................................ 1,635 84,103 (85,738) --
-------- -------- -------- --------
Net sales......................................... $177,039 $ 123,806 $ (85,738) $215,107
======== ======== ======== ========
Income from continuing operations before income
taxes........................................... $ 3,102 $ 12,825 $ (382) $ 15,545
======== ======== ======== ========
Identifiable assets............................... $108,606 $ 115,007 $ (15,170) $208,443
======== ======== ======== ========
FISCAL YEAR 1996:
Revenue from sales to unaffiliated customers...... $146,749 $ 39,118 $ -- $185,867
Intercompany sales................................ 2,830 71,656 (74,486) --
-------- -------- -------- --------
Net sales......................................... $149,579 $ 110,774 $ (74,486) $185,867
======== ======== ======== ========
Income from continuing operations before income
taxes........................................... $ 5,103 $ 9,244 $ (747) $ 13,600
======== ======== ======== ========
Identifiable assets............................... $104,770 $ 121,246 $ (25,636) $200,380
======== ======== ======== ========
FISCAL YEAR 1995:
Revenue from sales to unaffiliated customers...... $125,639 $ 35,214 $ -- $160,853
Intercompany sales................................ 2,164 74,658 (76,822) --
-------- -------- -------- --------
Net sales......................................... $127,803 $ 109,872 $ (76,822) $160,853
======== ======== ======== ========
Income from continuing operations before income
taxes........................................... $ 4,728 $ 7,273 $ (569) $ 11,432
======== ======== ======== ========
Identifiable assets............................... $ 99,566 $ 111,074 $ (23,691) $186,949
======== ======== ======== ========

F-17

424B1 62nd Page of 69 TOC 1st Previous Next ↓Bottom Just 62nd

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14 -- QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents unaudited selected interim operating results
of the Company for fiscal 1997 and 1996 (in thousands, except per share
amounts):

[Enlarge/Download Table]

QUARTER ENDED
--------------------------------------------------
APRIL 30 JULY 31 OCTOBER 31 JANUARY 31
-------- ------- ---------- ----------

1997
Net sales.............................. $ 31,014 $50,751 $ 76,864 $ 56,478
Gross profit........................... $ 17,351 $27,630 $ 42,967 $ 32,128
Net (loss) income...................... $ (474) $ 1,684 $ 7,350 $ 3,132
Per share:
Net (loss) income...................... $ (0.04) $ 0.15 $ 0.65 $ 0.28
1996
Net sales.............................. $ 28,204 $43,986 $ 68,079 $ 45,598
Gross profit........................... $ 14,917 $23,311 $ 36,132 $ 28,005
Net (loss) income...................... $ (1,058) $ 1,444 $ 6,507 $ 2,831
Per share:
Net (loss) income...................... $ (0.10) $ 0.13 $ 0.58 $ 0.25

NOTE 15 -- SUPPLEMENTAL CASH FLOW INFORMATION

The following is provided as supplemental information to the consolidated
statements of cash flows (in thousands):

[Download Table]

FISCAL YEAR ENDED JANUARY
31,
----------------------------
1997 1996 1995
------ ------ ------

Cash paid during the year for:
Interest............................................. $5,141 $4,887 $4,464
Income taxes......................................... $4,321 $2,395 $1,217
Non-cash investing and financial activities:
Equipment acquired under capital lease............... $ 217 $ 422 $ 51

NOTE 16 -- SUBSEQUENT EVENTS

On April 3, 1997, the Company's Board of Directors approved a five-for-four
stock split of the Company's Common Stock and Class A Common Stock effected by
means of a dividend distribution on May 1, 1997 to shareholders of record on
April 21, 1997. These financial statements have been retroactively adjusted to
reflect the impact of the stock split.

On September 10, 1997, the Company's Board of Directors approved a
three-for-two stock split of the Company's Common Stock and Class A Common Stock
effected by means of a dividend distribution on September 29, 1997 to
shareholders of record on September 19, 1997. These financial statements have
been retroactively adjusted to reflect the impact of the stock split.

F-18

424B1 63rd Page of 69 TOC 1st Previous Next ↓Bottom Just 63rd

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

[Enlarge/Download Table]

SIX MONTHS ENDED
JULY 31,
-------------------
1997 1996
------- -------

Net sales................................................................ $91,912 $81,764
Cost and expenses:
Cost of sales.......................................................... 39,785 36,784
Selling, general and administrative.................................... 47,050 41,128
------- -------
Operating income......................................................... 5,077 3,852
Net interest expense..................................................... 2,283 2,123
------- -------
Income before income taxes............................................... 2,794 1,729
Provision for income taxes............................................... 699 519
------- -------
Net income............................................................... $ 2,095 $ 1,210
======= =======
Income per share......................................................... $ 0.18 $ 0.11
======= =======
Shares used in per share computations.................................... 11,688 11,264
======= =======

See Notes to Consolidated Financial Statements

F-19

424B1 64th Page of 69 TOC 1st Previous Next ↓Bottom Just 64th

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
(UNAUDITED)

[Enlarge/Download Table]

JULY 31,
---------------------
1997 1996
-------- --------

ASSETS
Current assets:
Cash................................................................. $ 1,493 $ 1,603
Trade receivables, net............................................... 89,549 79,299
Inventories.......................................................... 105,819 108,563
Other................................................................ 22,698 16,364
-------- --------
Total current assets......................................... 219,559 205,829
-------- --------
Plant, property and equipment, net..................................... 16,738 13,230
Other assets........................................................... 10,005 8,531
-------- --------
Total Assets........................................................... $246,302 $227,590
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Loans payable to banks............................................... $ 47,605 $ 34,754
Current portion of long-term debt.................................... 5,000 --
Accounts payable..................................................... 21,822 19,243
Accrued liabilities.................................................. 18,543 11,737
Deferred and current taxes payable................................... 6,615 7,517
-------- --------
Total current liabilities.................................... 99,585 73,251
-------- --------
Long-term debt......................................................... 40,000 40,000
Deferred and noncurrent foreign income taxes........................... 3,368 3,424
Other liabilities...................................................... 2,944 3,145
Shareholders' equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no
shares issued..................................................... -- --
Common Stock, $0.01 par value, 20,000,000 shares authorized;
6,508,618 and 6,428,122 shares issued, respectively............... 65 64
Class A Common Stock, $0.01 par value, 10,000,000 shares authorized;
4,810,495 and 4,853,190 shares issued and outstanding,
respectively...................................................... 48 49
Capital in excess of par value....................................... 34,451 34,215
Retained earnings.................................................... 72,934 61,164
Cumulative translation adjustment.................................... (6,965) 12,406
Treasury Stock, 17,251 shares, at cost............................... (128) (128)
-------- --------
100,405 107,770
-------- --------
Total Liabilities and Shareholders' Equity............................. $246,302 $227,590
======== ========

See Notes to Consolidated Financial Statements

F-20

424B1 65th Page of 69 TOC 1st Previous Next ↓Bottom Just 65th

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

[Enlarge/Download Table]

SIX MONTHS ENDED
JULY 31,
---------------------
1997 1996
-------- --------

Cash flows from operating activities:
Net income........................................................... $ 2,095 $ 1,210
Adjustments to reconcile net income to net cash used for operating
activities:
Depreciation and amortization..................................... 1,989 1,885
Deferred and noncurrent foreign income taxes...................... 117 (485)
Provision for losses on accounts receivable....................... 221 358
Changes in current assets and liabilities:
Trade receivables............................................... (14,966) (4,189)
Inventories..................................................... (21,259) (18,951)
Other current assets............................................ (8,585) (4,292)
Accounts payable................................................ (3,052) (1,706)
Accrued liabilities............................................. 5,588 2,409
Deferred and current taxes payable.............................. 197 (555)
Increase in other noncurrent assets............................... (1,669) (584)
Decrease in other noncurrent liabilities.......................... (22) (48)
-------- --------
Net cash used in operating activities................................ (39,346) (24,948)
-------- --------
Cash flows from investing activities:
Capital expenditures................................................. (2,586) (2,332)
Goodwill, trademarks and other intangibles........................... (800) (76)
-------- --------
Net cash used in investing activities................................ (3,386) (2,408)
-------- --------
Cash flows from financing activities:
Net proceeds from current borrowings under lines of credit........... 40,056 25,750
Principal payments under capital leases.............................. (135) (269)
Exercise of stock options............................................ -- 16
Dividends paid....................................................... (455) (360)
-------- --------
Net cash provided by financing activities............................ 39,466 25,137
-------- --------
Effect of exchange rate changes on cash................................ (126) (7)
Net decrease in cash................................................... (3,392) (2,226)
Cash at beginning of period............................................ 4,885 3,829
-------- --------
Cash at end of period.................................................. $ 1,493 $ 1,603
======== ========

See Notes to Consolidated Financial Statements

F-21

424B1 66th Page of 69 TOC 1st Previous Next ↓Bottom Just 66th

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been
prepared by the Company in a manner consistent with that used in the preparation
of the financial statements included in the Company's fiscal 1997 Annual Report
filed on Form 10-K incorporated by reference in this Prospectus ("Form 10-K").
In the opinion of management, the accompanying financial statements reflect all
adjustments, consisting of only normal and recurring adjustments, necessary for
a fair presentation of the financial position and results of operations for the
periods presented. These consolidated financial statements should be read in
conjunction with the Form 10-K.

NOTE 1 -- STOCK SPLIT

NOTE 2 -- RECENTLY ISSUED ACCOUNTING STANDARDS

In February 1997, FASB issued Statement No. 128, Earnings Per Share, which
specifies the computation, presentation and disclosure requirements for earnings
per share. Management of the Company believes that adoption of Statement No.
128, which is required for the fiscal year ending January 31, 1998, will not
have a material impact on the Company's earnings per share calculation.

NOTE 3 -- INVENTORIES

Inventories consist of the following (in thousands):

[Download Table]

JULY 31, JULY 31,
1997 1996
-------- --------

Finished goods......................................... $ 66,678 $ 63,187
Work-in-process and component parts.................... 39,141 45,376
-------- --------
$105,819 $108,563
======== ========

NOTE 4 -- SUPPLEMENTAL CASH FLOW INFORMATION

The following is provided as supplemental information to the consolidated
statements of cash flows (in thousands):

[Download Table]

SIX MONTHS
ENDED JULY 31,
-----------------
1997 1996
------ ------

Cash paid during the period for:
Interest................................................. $2,539 $2,234
Income Taxes............................................. 505 1,755
Non-cash investing and financing activities:
Equipment acquired under capital leases.................. $ 0 $ 21

NOTE 5 -- BANK CREDIT ARRANGEMENT

On July 23, 1997, the Company amended its revolving credit and working
capital lines with its domestic bank group to provide for a three year $90.0
million unsecured revolving line of credit and $16.6 million of uncommitted
working capital lines of credit. These new facilities replace the $20.0 million
revolving line of

F-22

424B1 67th Page of 69 TOC 1st Previous Next ↓Bottom Just 67th

credit and $35.0 million domestic working capital line of credit and certain of
the Company's Swiss working capital lines.

NOTE 6 -- SUBSEQUENT EVENT

F-23

424B1 68th Page of 69 TOC 1st Previous Next ↓Bottom Just 68th

[PHOTOGRAPHS OF THE COMPANY'S PRODUCTS WITH THE FOLLOWING ADVERTISING COPY OF
THE COMPANY'S BRANDS:

CORUM: Beauty and invention that speak to the eye and imagination. Corum
watches appeal to consumers and collectors who prize originality and
meticulous Old World hand-craftsmanship.

PIAGET: Timepieces of exceptional character. Crafted entirely by hand of 18
karat gold or platinum, embellished by only the finest jewels. No watch
epitomizes elegance and luxury more than Piaget.

ESQ SWISS: Bold in design, ESQ Swiss quartz watches are made for vital
people who know that every second counts, and who seek a sporty, stylish
watch that can keep pace with their active lifestyles.

CONCORD: The sensation of time. Watches of sophisticated style, crafted with
caring attention to detail. Concord timepieces exude an unmistakable sense
of luxury to the touch, and to the eye.

MOVADO -- Registered Trademark: THE MUSEUM -- Registered Trademark WATCH.
SWISS. Recognized in museums around the world for their excellence in
design, Movado timepieces appeal to individuals who recognize and appreciate
artistic quality in the watches they wear.

VIZIO: MOVADO: A post-modern perspective on time: sleek, sculptured,
architectural in feeling. Vizio is an aesthetic statement for those who
prize innovation in watch design.]

424B1 Last Page of 69 TOC 1st Previous Next ↓Bottom Just 69th

------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING SHAREHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.

------------------

TABLE OF CONTENTS

[Download Table]

PAGE
----

Prospectus Summary.................... 3
Risk Factors.......................... 6
Special Note Regarding Forward-Looking
Statements.......................... 10
Use of Proceeds....................... 10
Capitalization........................ 11
Dividend Policy....................... 12
Price Range of Common Stock........... 12
Selected Historical Financial Data.... 13
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 14
Business.............................. 19
Management............................ 28
Certain Transactions.................. 30
Principal and Selling Shareholders.... 31
Shares Eligible for Future Sale....... 34
Description of Capital Stock.......... 34
Underwriting.......................... 37
Notice to Canadian Residents.......... 38
Certain U.S. Federal Tax
Considerations for Non-U.S. Holders
of Common Stock..................... 40
Legal Matters......................... 43
Experts............................... 43
Available Information................. 43
Incorporation of Certain Documents by
Reference........................... 43
Index to Consolidated Financial
Statements.......................... F-1

------------------------------------------------------

[MOVADO GROUP LOGO]

Piaget - Corum - Concord - Movado
Vizio - ESQ - Coach Watches

2,400,000 Shares

Common Stock
($.01 par value)

PROSPECTUS

CREDIT SUISSE FIRST BOSTON

FURMAN SELZ

RODMAN & RENSHAW, INC.

------------------------------------------------------

424B1	1st Page of 69	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

424B1	2nd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 2nd

424B1	3rd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 3rd

424B1	4th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 4th

424B1	5th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 5th

424B1	6th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 6th

424B1	7th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 7th

424B1	8th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 8th

424B1	9th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 9th

424B1	10th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 10th

424B1	11th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 11th

424B1	12th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 12th

424B1	13th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 13th

424B1	14th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 14th

424B1	15th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 15th

424B1	16th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 16th

424B1	17th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 17th

424B1	18th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 18th

424B1	19th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 19th

424B1	20th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 20th

424B1	21st Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 21st

424B1	22nd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 22nd

424B1	23rd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 23rd

424B1	24th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 24th

424B1	25th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 25th

424B1	26th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 26th

424B1	27th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 27th

424B1	28th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 28th

424B1	29th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 29th

424B1	30th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 30th

424B1	31st Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 31st

424B1	32nd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 32nd

424B1	33rd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 33rd

424B1	34th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 34th

424B1	35th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 35th

424B1	36th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 36th

424B1	37th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 37th

424B1	38th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 38th

424B1	39th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 39th

424B1	40th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 40th

424B1	41st Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 41st

424B1	42nd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 42nd

424B1	43rd Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 43rd

424B1	44th Page of 69	TOC	1st	Previous	Next	↓Bottom	Just 44th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘424B1’ Filing	Date	First	Last	Other Filings

	12/31/18	7	25
	12/31/09	8	25
	5/31/06	26		4
	1/31/05	54		10-K, 5, 5/A
	12/30/02	8	25
	12/31/00	7	25
	12/31/98	41
	2/2/98	18		SC 13G/A
	1/31/98	5	66	10-K405
	11/26/97	10
	10/31/97	12		10-Q
	10/27/97	10
	10/24/97	1
Filed on:	10/21/97			S-3MEF
	10/20/97	1	37
	10/17/97	10
	9/30/97	4	33
	9/29/97	3	67
	9/19/97	62	67
	9/10/97	62	67
	8/31/97	24
	7/31/97	5	45	10-Q
	7/23/97	8	66
	6/30/97	26
	5/23/97	43		DEF 14A
	5/1/97	3	66
	4/30/97	12	43	10-Q
	4/21/97	62	66
	4/3/97	62	66
	3/24/97	46
	2/14/97	31	32	SC 13G
	1/31/97	3	60	10-K405
	1/7/97	33
	8/31/96	24
	7/31/96	5	45	10-Q, 10-Q/A
	1/31/96	5	60
	10/1/95	30
	6/1/95	59
	2/1/95	52	60
	1/31/95	5	60
	9/23/94	30	59
	1/31/94	50	60
	11/9/93	12
	9/9/93	34	43
	7/31/93	58
				List all Filings

↑Top

Filing Submission 0000950123-97-008729 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Movado Group Inc – ‘424B1’ on 10/21/97

As of: Tuesday, 10/21/97 · Accession #: 950123-97-8729 · File #: 333-35875

Prospectus — Rule 424(b)(1)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Prospectus — Rule 424(b)(1)
Filing Table of Contents