On March 20, 2017, Movado Group, Inc. (the “Company”) issued a press release announcing fourth quarter and fiscal year 2017 results for the periods ended January 31, 2017. The press release is attached hereto as Exhibit 99.1.
The information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Following a review of the current cost structure of the Company, on March 15, 2017, the Company committed to cost-savings initiatives intended to better align the Company’s global infrastructure with the current business environment. These initiatives primarily constitute a reduction in the Company’s workforce predominantly impacting its North American and Swiss operations. The Company expects these initiatives to yield approximately $12.0 million of pre-tax savings in fiscal 2018 (excluding the impact of the charges described below) and approximately $15.0 million in ongoing annual pre-tax savings, with the majority being in general and administrative expenses.
The cost-savings initiatives are expected to result in a pre-tax charge in a range of approximately $7.0 million to $10.0 million predominantly in the first quarter of fiscal 2018, with the balance being incurred throughout the remainder of the fiscal year. Approximately $6.0 million to $9.0 million of the aggregate amount represents cash charges for employee termination costs. Of the balance, approximately $0.5 million represents a non-cash charge for a fixed asset write-down, with the remainder being other miscellaneous cash charges.