MOV Movado Group, Inc.

Risks

• The recent COVID-19 novel coronavirus, or other public health threats and epidemics, could materially and adversely affect our business.
• Adverse economic conditions in key markets, and the resulting declines in consumer confidence and spending, could have a material adverse effect on the Company’s operating results.
• “Brexit” has created significant uncertainty for the Company’s U.K. business operations which could have a material adverse effect on the Company’s financial condition and results of operations.
• A significant portion of the Company’s business is conducted outside of the United States. Many factors affecting business activities outside the United States could adversely impact this business.
• U.S. Special Tariffs or other restrictions placed on imports from China, and any retaliatory trade measures taken by China, may have a material adverse impact on the Company’s financial condition and results of operations.
• The Company’s wholesale business could be negatively affected by the consumer shift toward online shopping, as well as by further changes of ownership, contraction and consolidation in the retail industry.
• The Company faces intense competition in the worldwide watch industry not only from competitors selling traditional watches but also from those selling smart watches and other smart wearables.
• The design, sourcing, marketing, distribution and after-sales servicing of smart watches involve additional challenges to those applicable to traditional watches.
• Maintaining favorable brand recognition is essential to the Company’s success, and failure to do so could materially and adversely affect the Company’s results of operations.
• If the Company loses any of its license agreements, there may be significant loss of revenues and a negative effect on business.
• Changes in the sales or channel mix of the Company’s products could impact gross profit margins.
• The Company’s business is seasonal, so events and circumstances that adversely affect holiday consumer spending will have a disproportionately adverse effect on the Company’s results of operations.
• Sales in the Company’s retail outlet locations are dependent upon customer foot traffic.
• If the Company is unable to maintain existing space or to lease new space for its retail outlets in prime outlet center locations or is unable to complete construction on a timely basis, the Company’s ability to achieve favorable results in its retail business could be adversely affected.
• The Company’s e-commerce business is subject to numerous risks that could have an adverse effect on the Company’s business and results of operations.
• If the technology-based systems that give the Company’s customers the ability to shop online do not function effectively, the Company’s operating results could be materially adversely affected.
• If the Company misjudges the demand for its products, high inventory levels could adversely affect future operating results and profitability.
• If the Company were to lose its relationship with any of its key customers or distributors or any of such customers or distributors were to experience financial difficulties, there may be a significant loss of revenue and operating results.
• The inability or difficulty of the Company’s customers, suppliers and business partners to obtain credit could materially and adversely affect its results of operations and liquidity.
• An increase in product returns could negatively impact the Company’s operating results and profitability.
• Interruptions at any of the Company’s major warehouse and distribution centers could materially adversely affect its business.
• Fluctuations in the pricing of commodities or the cost of labor could adversely affect the Company’s ability to produce products at favorable prices.
• Current or future cost reduction, streamlining, restructuring or business optimization initiatives could result in the Company incurring significant charges.
• If the Company is unable to successfully implement its growth strategies, its future operating results could suffer.
• Acquisitions inherently involve significant risks and uncertainties.
• Impairment charges could have an adverse impact on our results of operations.
• Changes to laws or regulations impacting the industries in which the Company operates could require it to alter its business practices which could have a material adverse effect on its results of operations.
• Changes to tax laws or regulations could have a material adverse effect on the Company’s financial condition and results of operations.
• The Company is subject to complex and evolving laws and regulations regarding privacy and data protection that could result in legal claims, changes to business practices and increased costs that could materially and adversely affect the Company’s results of operations.
• If the Company were to experience a significant privacy breach, it could be subject to costly government enforcement actions and private litigation and suffer significant negative publicity which could materially and adversely affect the Company’s results of operations.
• From time to time the Company is subject to legal proceedings that could result in significant expenses, fines and reputational damage.
• If the Company were to lose key members of management or be unable to attract and retain the talent required for the business, operating results could suffer.
• If the Company cannot secure and maintain financing and credit on favorable terms, the Company’s financial condition and results of operations may be materially adversely affected.
• Changes to the method of determining LIBOR or the selection of a replacement for LIBOR may affect our financial instruments.
• The Grinberg family owns a majority of the voting power of the Company’s stock.
• The Company’s stock price could fluctuate and possibly decline due to changes in revenue, operating results and cash flows.