~ Expected to be Immediately Accretive to
Fiscal Year 2018 ~
~ Olivia Burton Expands Movado Group’s
Powerful Portfolio of Brands ~
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/
Investors:ICR, Inc.Rachel Schacter/Allison Malkin,
203-682-8200orMedia:Alecia Pulman/Brittany Rae
FraserAlecia.pulman@icrinc.com /
Brittanyrae.fraser@icrinc.com203-682-8200orMedia:JLB Brands
Ltd.press@oliviaburton.com
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