~ Expected to be Immediately Accretive to Fiscal Year 2018 ~
~ Olivia Burton Expands Movado Group’s Powerful Portfolio of Brands ~
PARAMUS, N.J.--(BUSINESS WIRE)--Jul. 5, 2017--
Movado Group, Inc. (NYSE:MOV) today announced that on July 3, 2017 it
acquired JLB Brands Ltd., the owner of the Olivia Burton brand, one of
the United Kingdom’s fastest growing fashion watch and jewelry brands,
for approximately £60.0 million GBP in cash, subject to working capital
and other closing adjustments.
JLB Brands Ltd. was founded by Lesa Bennett and Jemma Fennings in the UK
in 2011 and began selling fashion watches under the Olivia Burton brand
in 2012, adding jewelry in 2016. Since 2012, the Company has experienced
significant growth in the UK and is in the early stages of expanding
internationally. Olivia Burton designs are inspired by both fashion and
vintage trends for the millennial consumer at accessible price points,
with new watch collections launched every two months. Olivia Burton is
sold through leading retailers, including John Lewis, Watchshop,
Argento, Selfridges and Beaverbrooks in the UK and recently through
Nordstrom in the United States. Olivia Burton also operates a concession
at Topshop’s flagship location in Oxford Circus, London. Olivia Burton
has approximately 33 employees all based in its Shoreditch head office
in East London.
In its latest fiscal year ended March 31, 2017, Olivia Burton’s revenue
increased 64% to approximately £15 million and is expected to generate
approximately £25 million in net sales in its fiscal year ending March
31, 2018. Driving Olivia Burton’s growth is a continued increase in its
core UK market, the expansion of the brand beyond the UK including the
introduction of the brand into Nordstrom in July 2016, reaching 117
stores in the U.S. as of January 2017, and a focus on building a direct
to consumer business through its e-commerce platform.
The benefits of the transaction for the Company include:
-
The addition of a compelling brand with significant global growth
potential to Movado Group’s portfolio as Olivia Burton expands space
in its existing distribution network, grows its global e-commerce
penetration and increases its global reach beyond the core UK market
in its current categories of watches and jewelry;
-
Olivia Burton is well-positioned to reach both aspirational and
millennial consumers through its distinctive and beautiful watch and
jewelry designs;
-
Movado Group’s global distribution network will help build and expand
Olivia Burton on a global basis;
-
Movado Group funded this transaction with cash held outside the U.S.
Movado Group expects the transaction to be immediately accretive
exclusive of transaction related charges and the amortization of
anticipated purchase accounting adjustments. The acquisition was funded
with cash on hand of Movado Group’s non-U.S. subsidiaries and was
completed on July 3, 2017. Movado Group plans to discuss this
transaction in more detail when it reports its second quarter fiscal
2018 results.
Olivia Burton will continue to operate under the leadership of Lesa
Bennett and Jemma Fennings, its founders, who will report to Efraim
Grinberg, Chairman and Chief Executive Officer of Movado Group. Movado
Group plans to retain Olivia Burton’s talented team in London.
Efraim Grinberg, Movado Group’s Chairman and Chief Executive Officer,
stated, “I have much admired the spectacular job that Lesa and Jemma
have done in building the Olivia Burton brand in the UK over the last
few years and more recently with the beginning of its international
expansion. While at accessible price points, they have kept the brand
extremely creative, innovative and aspirational. They’ve also been
building a very strong e-commerce business in the UK, which we believe
has great potential for global expansion. With this acquisition, we not
only reaffirm our commitment to the watch category, but also expand our
presence into fashion jewelry. Olivia Burton’s success under Lesa and
Jemma’s direction prove that beautifully designed watches and jewelry
can continue to excite today’s consumer. I am pleased to collaborate
with Lesa and Jemma on the continued global expansion of the Olivia
Burton brand.”
Jemma Fennings stated, “We’re thrilled to join Movado Group, which has
the global scale and infrastructure required to support our vision for
growth for the Olivia Burton brand. Movado Group shares our passion and
relentless focus on innovation and this partnership will further
strengthen the design of our watch and jewelry offerings and
significantly increase our distribution around the world.”
Lesa Bennett added, “We are pleased that Olivia Burton will continue to
operate with its current management team and employees, allowing the
transaction to be seamless to our valued clients and business partners.
We believe that Olivia Burton has tremendous opportunity for growth, and
we look forward to becoming part of Movado Group to help the brand reach
its potential.”
Movado Group’s financial advisor for this transaction is Centerview
Partners LLC and its legal advisor is Herbert Smith Freehills LLP. JLB
Brands Ltd’s financial advisor is BDO LLP and its legal advisor is DLA
Piper UK LLP.
Safe Harbor
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Company has tried, whenever possible, to identify these forward-looking
statements using words such as “expects,” “anticipates,” “believes,”
“targets,” “goals,” “projects,” “intends,” “plans,” “seeks,”
“estimates,” “may,” “will,” “should” and variations of such words and
similar expressions. Similarly, statements in this press release that
describe the Company's business strategy, outlook, objectives, plans,
intentions or goals are also forward-looking statements. Accordingly,
such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause the Company's actual
results, performance or achievements and levels of future dividends to
differ materially from those expressed in, or implied by, these
statements. These risks and uncertainties may include, but are not
limited to general economic and business conditions which may impact
disposable income of consumers in the United States and the other
significant markets (including Europe) where the Company’s products are
sold, uncertainty regarding such economic and business conditions,
trends in consumer debt levels and bad debt write-offs, general
uncertainty related to possible terrorist attacks, natural disasters,
the stability of the European Union (including the impact of the June
23, 2016 referendum advising that the United Kingdom exit from the
European Union) and defaults on or downgrades of sovereign debt and the
impact of any of those events on consumer spending, changes in consumer
preferences and popularity of particular designs, new product
development and introduction, the ability of the Company to successfully
implement its business strategies, competitive products and pricing, the
impact of “smart” watches and other wearable tech products on the
traditional watch market, seasonality, availability of alternative
sources of supply in the case of the loss of any significant supplier or
any supplier’s inability to fulfill the Company’s orders, the loss of or
curtailed sales to significant customers, the Company’s dependence on
key employees and officers, the ability to successfully integrate the
operations of acquired businesses without disruption to other business
activities, the continuation of the company’s major warehouse and
distribution centers, the continuation of licensing arrangements with
third parties, losses possible from pending or future litigation, the
ability to secure and protect trademarks, patents and other intellectual
property rights, the ability to lease new stores on suitable terms in
desired markets and to complete construction on a timely basis, the
ability of the Company to successfully manage its expenses on a
continuing basis, information systems failure or breaches of network
security, the continued availability to the Company of financing and
credit on favorable terms, business disruptions, disease, general risks
associated with doing business outside the United States including,
without limitation, import duties, tariffs, quotas, political and
economic stability, changes to existing laws or regulations, and success
of hedging strategies with respect to currency exchange rate
fluctuations, and the other factors discussed in the Company’s Annual
Report on Form 10-K and other filings with the Securities and Exchange
Commission. These statements reflect the Company's current beliefs and
are based upon information currently available to it. Be advised that
developments subsequent to this press release are likely to cause these
statements to become outdated with the passage of time. The Company
assumes no duty to update its forward looking statements and this
release shall not be construed to indicate the assumption by the Company
of any duty to update its outlook in the future.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170705005119/en/
Source: Movado Group, Inc.
Investors:
ICR, Inc.
Rachel Schacter/Allison Malkin,
203-682-8200
or
Media:
Alecia Pulman/Brittany Rae Fraser
Alecia.pulman@icrinc.com
/ Brittanyrae.fraser@icrinc.com
203-682-8200
or
Media:
JLB
Brands Ltd.
press@oliviaburton.com