MOVADO GROUP INC (Form: 10-Q, Received: 11/24/2020 09:56:29)

false 2021 Q3 0000072573 --01-31 true false true true true true 2021 0 P5Y 0 0 P10Y P7Y P9Y P6Y 23.35 P5Y2M12D 0 0 0 12.42 P5Y9M18D P4Y4M24D P9Y7M6D 42.12 42.12 P1Y4M24D P10M24D 0000072573 2020-02-01 2020-10-31 xbrli:shares 0000072573 mov:CommonStockClassUndefinedMember 2020-11-19 0000072573 us-gaap:CommonClassAMember 2020-11-19 iso4217:USD 0000072573 2020-10-31 0000072573 2020-01-31 0000072573 2019-10-31 0000072573 mov:CommonStockClassUndefinedMember 2020-10-31 0000072573 mov:CommonStockClassUndefinedMember 2020-01-31 0000072573 mov:CommonStockClassUndefinedMember 2019-10-31 0000072573 us-gaap:CommonClassAMember 2020-10-31 0000072573 us-gaap:CommonClassAMember 2020-01-31 0000072573 us-gaap:CommonClassAMember 2019-10-31 iso4217:USD xbrli:shares 0000072573 2020-08-01 2020-10-31 0000072573 2019-08-01 2019-10-31 0000072573 2019-02-01 2019-10-31 0000072573 2019-01-31 xbrli:pure 0000072573 mov:Covid19Member srt:NorthAmericaMember 2020-03-01 2020-06-30 0000072573 mov:Covid19Member us-gaap:RevolvingCreditFacilityMember 2020-03-31 0000072573 mov:Covid19Member us-gaap:RevolvingCreditFacilityMember 2020-05-01 2020-07-31 0000072573 mov:Covid19Member us-gaap:RevolvingCreditFacilityMember 2020-08-01 2020-10-31 0000072573 mov:Covid19Member 2020-02-01 2020-04-30 0000072573 us-gaap:AdjustmentsForNewAccountingPrincipleEarlyAdoptionMember 2020-02-01 2020-10-31 0000072573 us-gaap:AccountingStandardsUpdate201912Member 2020-10-31 0000072573 us-gaap:AccountingStandardsUpdate201813Member 2020-10-31 0000072573 us-gaap:AccountingStandardsUpdate201613Member 2020-10-31 0000072573 us-gaap:EmployeeStockOptionMember 2020-02-01 2020-10-31 0000072573 2020-02-01 2020-04-30 0000072573 2020-05-01 2020-07-31 0000072573 2019-02-01 2019-04-30 0000072573 2019-05-01 2019-07-31 iso4217:AUD 0000072573 mov:MGDLDistributionPTYLimitedMember 2019-11-22 2019-11-22 0000072573 mov:MGDLDistributionPTYLimitedMember 2019-11-22 0000072573 mov:CityTimeDistribucionSLUMember 2018-12-03 0000072573 mov:CityTimeDistribucionSLUMember 2018-12-02 2018-12-03 iso4217:EUR 0000072573 mov:MVMTWatchesIncMember 2018-09-29 2018-10-01 0000072573 mov:MVMTWatchesIncMember srt:MaximumMember 2018-09-29 2018-10-01 mov:ContingentPayment 0000072573 mov:MVMTWatchesIncMember 2018-10-01 0000072573 mov:MVMTWatchesIncMember 2019-07-31 0000072573 mov:MVMTWatchesIncMember 2020-01-31 0000072573 mov:MVMTWatchesIncMember 2019-02-01 2020-01-31 0000072573 us-gaap:NonoperatingIncomeExpenseMember mov:MVMTWatchesIncMember 2019-02-01 2020-01-31 0000072573 mov:MVMTWatchesIncMember us-gaap:OtherCurrentAssetsMember 2020-01-31 0000072573 mov:MVMTWatchesIncMember us-gaap:OtherNoncurrentAssetsMember 2020-01-31 0000072573 us-gaap:EmployeeSeveranceMember srt:MinimumMember 2020-02-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember srt:MaximumMember 2020-02-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:RestructuringPlanMember 2020-07-31 0000072573 us-gaap:OtherRestructuringMember mov:RestructuringPlanMember 2020-07-31 0000072573 us-gaap:EmployeeSeveranceMember mov:CorporateInitiativesMember 2020-07-31 0000072573 mov:InventoryRestructuringMember mov:CorporateInitiativesMember 2020-07-31 0000072573 mov:AccountReceivableRestructuringMember mov:CorporateInitiativesMember 2020-07-31 0000072573 us-gaap:OtherRestructuringMember mov:CorporateInitiativesMember 2020-07-31 0000072573 2020-07-31 0000072573 us-gaap:EmployeeSeveranceMember mov:RestructuringPlanMember 2020-08-01 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:RestructuringPlanMember 2020-08-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:CorporateInitiativesMember 2020-08-01 2020-10-31 0000072573 mov:InventoryRestructuringMember mov:CorporateInitiativesMember 2020-08-01 2020-10-31 0000072573 mov:AccountReceivableRestructuringMember mov:CorporateInitiativesMember 2020-08-01 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:CorporateInitiativesMember 2020-08-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:RestructuringPlanMember 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:RestructuringPlanMember 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:CorporateInitiativesMember 2020-10-31 0000072573 mov:InventoryRestructuringMember mov:CorporateInitiativesMember 2020-10-31 0000072573 mov:AccountReceivableRestructuringMember mov:CorporateInitiativesMember 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:CorporateInitiativesMember 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:RestructuringPlanMember 2020-01-31 0000072573 us-gaap:OtherRestructuringMember mov:RestructuringPlanMember 2020-01-31 0000072573 us-gaap:EmployeeSeveranceMember mov:CorporateInitiativesMember 2020-01-31 0000072573 mov:InventoryRestructuringMember mov:CorporateInitiativesMember 2020-01-31 0000072573 mov:AccountReceivableRestructuringMember mov:CorporateInitiativesMember 2020-01-31 0000072573 us-gaap:OtherRestructuringMember mov:CorporateInitiativesMember 2020-01-31 0000072573 us-gaap:EmployeeSeveranceMember mov:RestructuringPlanMember 2020-02-01 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:RestructuringPlanMember 2020-02-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 mov:InventoryRestructuringMember mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 mov:AccountReceivableRestructuringMember mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 us-gaap:OtherRestructuringMember mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 us-gaap:EmployeeSeveranceMember 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2020-08-01 2020-10-31 0000072573 mov:CompanyStoresMember 2020-08-01 2020-10-31 0000072573 us-gaap:CostOfSalesMember 2020-08-01 2020-10-31 0000072573 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2020-02-01 2020-10-31 0000072573 mov:CompanyStoresMember 2020-02-01 2020-10-31 0000072573 us-gaap:CostOfSalesMember 2020-02-01 2020-10-31 0000072573 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2020-02-01 2020-04-30 0000072573 mov:MVMTWatchesIncMember us-gaap:TradeNamesMember 2020-04-30 0000072573 mov:MVMTWatchesIncMember us-gaap:CustomerRelationshipsMember 2020-04-30 0000072573 mov:CompanyStoresMember 2020-10-31 0000072573 us-gaap:TradeNamesMember 2020-02-01 2020-10-31 0000072573 us-gaap:CustomerRelationshipsMember 2020-02-01 2020-10-31 0000072573 us-gaap:OtherIntangibleAssetsMember 2020-02-01 2020-10-31 0000072573 us-gaap:TradeNamesMember 2020-01-31 0000072573 us-gaap:CustomerRelationshipsMember 2020-01-31 0000072573 us-gaap:OtherIntangibleAssetsMember 2020-01-31 0000072573 us-gaap:TradeNamesMember 2020-10-31 0000072573 us-gaap:CustomerRelationshipsMember 2020-10-31 0000072573 us-gaap:OtherIntangibleAssetsMember 2020-10-31 0000072573 mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember 2018-10-12 0000072573 mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember us-gaap:LetterOfCreditMember us-gaap:SecuredDebtMember 2018-10-12 0000072573 mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember mov:SwinglineMember us-gaap:SecuredDebtMember 2018-10-12 0000072573 mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember mov:SwissBorrowersMember us-gaap:SecuredDebtMember 2018-10-12 0000072573 mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember 2018-10-10 2018-10-12 0000072573 mov:SecondAmendmentMember 2020-02-01 2020-04-30 0000072573 srt:ScenarioForecastMember mov:SecondAmendmentMember 2021-05-01 2021-07-31 0000072573 srt:MinimumMember srt:ScenarioForecastMember mov:SecondAmendmentMember 2021-05-01 2021-07-31 0000072573 srt:ScenarioForecastMember mov:SecondAmendmentMember 2021-07-31 0000072573 us-gaap:LondonInterbankOfferedRateLIBORMember srt:ScenarioForecastMember mov:SecondAmendmentMember 2021-05-01 2021-07-31 0000072573 us-gaap:LondonInterbankOfferedRateLIBORMember srt:MinimumMember 2020-02-01 2020-04-30 0000072573 us-gaap:LondonInterbankOfferedRateLIBORMember srt:MinimumMember srt:ScenarioForecastMember mov:SecondAmendmentMember 2021-05-01 2021-07-31 iso4217:CHF 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2020-10-31 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2019-10-31 0000072573 us-gaap:LetterOfCreditMember 2020-10-31 0000072573 us-gaap:LetterOfCreditMember 2019-10-31 0000072573 us-gaap:LetterOfCreditMember 2020-02-01 2020-10-31 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2020-08-01 2020-10-31 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2019-08-01 2019-10-31 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2020-02-01 2020-10-31 0000072573 us-gaap:RevolvingCreditFacilityMember us-gaap:SecuredDebtMember mov:CreditAgreementDueOnOctoberTwelveTwoThousandTwentyThreeMember 2019-02-01 2019-10-31 0000072573 us-gaap:UnsecuredDebtMember country:CH 2020-10-31 0000072573 us-gaap:UnsecuredDebtMember country:CH 2019-10-31 mov:Bank 0000072573 us-gaap:LetterOfCreditMember us-gaap:UnsecuredDebtMember country:CH 2020-10-31 0000072573 us-gaap:LetterOfCreditMember us-gaap:UnsecuredDebtMember country:CH 2019-10-31 mov:Subsidiary iso4217:CNY 0000072573 us-gaap:ForeignExchangeForwardMember 2020-10-31 iso4217:GBP 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-10-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2020-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember us-gaap:FairValueInputsLevel1Member 2020-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember us-gaap:FairValueInputsLevel2Member 2020-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember us-gaap:FairValueInputsLevel3Member 2020-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember 2020-10-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2020-01-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2020-01-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:OtherNoncurrentAssetsMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember mov:DefinedBenefitPlanAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherCurrentAssetsMember us-gaap:DerivativeFinancialInstrumentsAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherCurrentAssetsMember us-gaap:DerivativeFinancialInstrumentsAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherCurrentAssetsMember us-gaap:DerivativeFinancialInstrumentsAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:DerivativeFinancialInstrumentsAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2020-01-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2020-01-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2020-01-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:AvailableforsaleSecuritiesMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:ShortTermInvestmentsMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployerMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanAssetsEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember mov:DefinedBenefitPlanAssetsMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember mov:DefinedBenefitPlanAssetsMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember mov:DefinedBenefitPlanAssetsMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:DefinedBenefitPlanAssetsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-10-31 0000072573 us-gaap:OtherCurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-10-31 0000072573 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0000072573 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0000072573 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0000072573 us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:SupplementalExecutiveRetirementPlanLiabilitiesEmployeeMember 2019-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember 2019-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember 2019-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember 2019-10-31 0000072573 us-gaap:AccountsPayableAndAccruedLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember mov:ContingentConsiderationMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember mov:ContingentConsiderationMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember mov:ContingentConsiderationMember 2019-10-31 0000072573 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueMeasurementsRecurringMember mov:ContingentConsiderationMember 2019-10-31 0000072573 us-gaap:ShortTermInvestmentsMember 2020-02-01 2020-10-31 0000072573 mov:MVMTWatchesIncMember us-gaap:NonoperatingIncomeExpenseMember 2019-07-31 2019-07-31 0000072573 mov:MVMTWatchesIncMember us-gaap:OtherCurrentAssetsMember 2019-07-31 0000072573 mov:MVMTWatchesIncMember us-gaap:OtherNoncurrentAssetsMember 2019-07-31 0000072573 us-gaap:FairValueInputsLevel3Member mov:ContingentPurchasePriceLiabilityMember 2019-07-31 0000072573 us-gaap:FairValueInputsLevel3Member mov:ContingentPurchasePriceLiabilityMember 2019-08-01 2019-10-31 0000072573 us-gaap:FairValueInputsLevel3Member mov:ContingentPurchasePriceLiabilityMember 2019-10-31 0000072573 us-gaap:FairValueInputsLevel3Member mov:ContingentPurchasePriceLiabilityMember 2019-01-31 0000072573 us-gaap:FairValueInputsLevel3Member mov:ContingentPurchasePriceLiabilityMember 2019-02-01 2019-10-31 0000072573 2016-12-01 2016-12-31 0000072573 mov:CoronavirusAidReliefAndEconomicSecurityActMember 2020-03-26 2020-03-27 0000072573 mov:CoronavirusAidReliefAndEconomicSecurityActMember 2020-03-27 0000072573 2017-02-01 2017-12-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2020-01-31 0000072573 us-gaap:RetainedEarningsMember 2020-01-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-31 0000072573 us-gaap:TreasuryStockMember 2020-01-31 0000072573 mov:NonredeemableNoncontrollingInterestMember 2020-01-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2020-01-31 0000072573 us-gaap:RetainedEarningsMember 2020-02-01 2020-10-31 0000072573 mov:NonredeemableNoncontrollingInterestMember 2020-02-01 2020-10-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2020-02-01 2020-10-31 0000072573 mov:CommonStockClassUndefinedMember 2020-02-01 2020-10-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2020-02-01 2020-10-31 0000072573 us-gaap:TreasuryStockMember 2020-02-01 2020-10-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-02-01 2020-10-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2020-10-31 0000072573 us-gaap:RetainedEarningsMember 2020-10-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-10-31 0000072573 us-gaap:TreasuryStockMember 2020-10-31 0000072573 mov:NonredeemableNoncontrollingInterestMember 2020-10-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2020-10-31 0000072573 mov:CommonStockClassUndefinedMember 2019-01-31 0000072573 us-gaap:CommonClassAMember 2019-01-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2019-01-31 0000072573 us-gaap:RetainedEarningsMember 2019-01-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-31 0000072573 us-gaap:TreasuryStockMember 2019-01-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2019-01-31 0000072573 us-gaap:RetainedEarningsMember 2019-02-01 2019-10-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2019-02-01 2019-10-31 0000072573 us-gaap:TreasuryStockMember 2019-02-01 2019-10-31 0000072573 mov:CommonStockClassUndefinedMember 2019-02-01 2019-10-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2019-02-01 2019-10-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-02-01 2019-10-31 0000072573 us-gaap:AdditionalPaidInCapitalMember 2019-10-31 0000072573 us-gaap:RetainedEarningsMember 2019-10-31 0000072573 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-10-31 0000072573 us-gaap:TreasuryStockMember 2019-10-31 0000072573 mov:RedeemableNoncontrollingInterestMember 2019-10-31 0000072573 us-gaap:CommonClassAMember 2020-02-01 2020-10-31 0000072573 mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 mov:CurrentShareRepurchaseProgramMember 2017-08-29 0000072573 mov:CurrentShareRepurchaseProgramMember 2017-08-28 2017-08-29 0000072573 mov:CurrentShareRepurchaseProgramMember 2020-02-01 2020-10-31 0000072573 mov:CurrentShareRepurchaseProgramMember 2019-02-01 2019-10-31 0000072573 mov:SurrenderOfSharesByEmployeeMember 2020-02-01 2020-10-31 0000072573 mov:SurrenderOfSharesByEmployeeMember 2019-02-01 2019-10-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2020-10-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2020-01-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2019-10-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2020-10-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2020-01-31 0000072573 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2019-10-31 0000072573 mov:WholesaleMember 2020-08-01 2020-10-31 0000072573 mov:WholesaleMember 2019-08-01 2019-10-31 0000072573 mov:WholesaleMember 2020-02-01 2020-10-31 0000072573 mov:WholesaleMember 2019-02-01 2019-10-31 0000072573 us-gaap:SalesChannelDirectlyToConsumerMember 2020-08-01 2020-10-31 0000072573 us-gaap:SalesChannelDirectlyToConsumerMember 2019-08-01 2019-10-31 0000072573 us-gaap:SalesChannelDirectlyToConsumerMember 2020-02-01 2020-10-31 0000072573 us-gaap:SalesChannelDirectlyToConsumerMember 2019-02-01 2019-10-31 0000072573 mov:AfterSalesServiceMember 2020-08-01 2020-10-31 0000072573 mov:AfterSalesServiceMember 2019-08-01 2019-10-31 0000072573 mov:AfterSalesServiceMember 2020-02-01 2020-10-31 0000072573 mov:AfterSalesServiceMember 2019-02-01 2019-10-31 0000072573 mov:EmployeeStockOptionPlanMember 2013-04-04 0000072573 mov:EmployeeStockOptionPlanMember 2013-04-01 2013-04-04 0000072573 srt:MinimumMember 2020-01-31 0000072573 srt:MaximumMember 2020-01-31 0000072573 srt:MinimumMember 2020-10-31 0000072573 srt:MaximumMember 2020-10-31 0000072573 2019-02-01 2020-01-31 0000072573 mov:StockAwardUnitsMember 2020-08-01 2020-10-31 0000072573 mov:StockAwardUnitsMember 2019-08-01 2019-10-31 0000072573 mov:StockAwardUnitsMember 2020-02-01 2020-10-31 0000072573 mov:StockAwardUnitsMember mov:CorporateInitiativesMember 2020-02-01 2020-10-31 0000072573 mov:StockAwardUnitsMember 2019-02-01 2019-10-31 0000072573 mov:StockAwardUnitsMember 2020-10-31 0000072573 mov:StockAwardUnitsMember 2020-01-31 0000072573 mov:StockAwardUnitsMember 2019-02-01 2020-01-31 0000072573 srt:MinimumMember us-gaap:PerformanceSharesMember 2020-02-01 2020-10-31 0000072573 srt:MaximumMember us-gaap:PerformanceSharesMember 2020-02-01 2020-10-31 mov:Segment mov:Location 0000072573 us-gaap:GeographicConcentrationRiskMember srt:EuropeMember us-gaap:SalesRevenueNetMember 2020-08-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember us-gaap:MiddleEastMember us-gaap:SalesRevenueNetMember 2020-08-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:AsiaMember us-gaap:SalesRevenueNetMember 2020-08-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember mov:AmericasExcludingUnitedStatesMember us-gaap:SalesRevenueNetMember 2020-08-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:EuropeMember us-gaap:SalesRevenueNetMember 2019-08-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember us-gaap:MiddleEastMember us-gaap:SalesRevenueNetMember 2019-08-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:AsiaMember us-gaap:SalesRevenueNetMember 2019-08-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember mov:AmericasExcludingUnitedStatesMember us-gaap:SalesRevenueNetMember 2019-08-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:EuropeMember us-gaap:SalesRevenueNetMember 2020-02-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember us-gaap:MiddleEastMember us-gaap:SalesRevenueNetMember 2020-02-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:AsiaMember us-gaap:SalesRevenueNetMember 2020-02-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember mov:AmericasExcludingUnitedStatesMember us-gaap:SalesRevenueNetMember 2020-02-01 2020-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:EuropeMember us-gaap:SalesRevenueNetMember 2019-02-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember us-gaap:MiddleEastMember us-gaap:SalesRevenueNetMember 2019-02-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember srt:AsiaMember us-gaap:SalesRevenueNetMember 2019-02-01 2019-10-31 0000072573 us-gaap:GeographicConcentrationRiskMember mov:AmericasExcludingUnitedStatesMember us-gaap:SalesRevenueNetMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:OwnedBrandsCategoryMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:LicensedBrandCategoryMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:AfterSalesServiceAndAllOtherMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:OwnedBrandsCategoryMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:LicensedBrandCategoryMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:AfterSalesServiceAndAllOtherMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2019-08-01 2019-10-31 0000072573 mov:CompanyStoresMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:OwnedBrandsCategoryMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:LicensedBrandCategoryMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:AfterSalesServiceAndAllOtherMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:OwnedBrandsCategoryMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:LicensedBrandCategoryMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:AfterSalesServiceAndAllOtherMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2019-02-01 2019-10-31 0000072573 mov:CompanyStoresMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember 2020-01-31 0000072573 mov:CompanyStoresMember 2020-01-31 0000072573 mov:WatchAndAccessoryBrandsMember 2019-10-31 0000072573 mov:CompanyStoresMember 2019-10-31 0000072573 country:US 2020-08-01 2020-10-31 0000072573 mov:InternationalMember 2020-08-01 2020-10-31 0000072573 country:US 2019-08-01 2019-10-31 0000072573 mov:InternationalMember 2019-08-01 2019-10-31 0000072573 us-gaap:IntersegmentEliminationMember 2020-08-01 2020-10-31 0000072573 us-gaap:IntersegmentEliminationMember 2019-08-01 2019-10-31 0000072573 country:US 2020-02-01 2020-10-31 0000072573 mov:InternationalMember 2020-02-01 2020-10-31 0000072573 country:US 2019-02-01 2019-10-31 0000072573 mov:InternationalMember 2019-02-01 2019-10-31 0000072573 us-gaap:IntersegmentEliminationMember 2020-02-01 2020-10-31 0000072573 us-gaap:IntersegmentEliminationMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US mov:MVMTWatchesIncMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US mov:MVMTWatchesIncMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US mov:MVMTWatchesIncMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember country:US mov:MVMTWatchesIncMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember mov:JLBBrandsLimitedMember 2020-08-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember mov:JLBBrandsLimitedMember 2019-08-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember mov:JLBBrandsLimitedMember 2020-02-01 2020-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:InternationalMember mov:JLBBrandsLimitedMember 2019-02-01 2019-10-31 0000072573 mov:WatchAndAccessoryBrandsMember mov:OliviaBurtonBandAndCityTimeJointVentureMember mov:InternationalMember 2020-02-01 2020-10-31 0000072573 country:US 2020-10-31 0000072573 mov:InternationalMember 2020-10-31 0000072573 country:US 2020-01-31 0000072573 mov:InternationalMember 2020-01-31 0000072573 country:US 2019-10-31 0000072573 mov:InternationalMember 2019-10-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 31, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-16497

MOVADO GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)

New York		13-2595932
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

650 From Road, Ste. 375 Paramus, New Jersey		07652-3556
(Address of Principal Executive Offices)		(Zip Code)

(201) 267-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

MOV

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for that past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,’’ “accelerated filer,’’ “smaller reporting company,’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock and Class A Common Stock as of November 19, 2020 were 16,585,236 and 6,608,548 respectively.

MOVADO GROUP, INC.

Index to Quarterly Report on Form 10-Q

October 31, 2020

			Page
Part I	Financial Information (Unaudited)
	Item 1.	Consolidated Balance Sheets at October 31, 2020, January 31, 2020 and October 31, 2019	3
		Consolidated Statements of Operations for the three and nine months ended October 31, 2020 and October 31, 2019	4
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended October 31, 2020 and October 31, 2019	5
		Consolidated Statements of Cash Flows for the nine months ended October 31, 2020 and October 31, 2019	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	40
Part II	Other Information
	Item 1.	Legal Proceedings	41
	Item 1A.	Risk Factors	41
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
	Item 6.	Exhibits	43
Signature			44

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	October 31,			January 31,			October 31,
	2020			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	163,218		$	185,872		$	116,025
Trade receivables, net		103,506			78,388			136,272
Inventories		176,841			171,406			201,164
Other current assets		28,028			28,888			30,737
Total current assets		471,593			464,554			484,198
Property, plant and equipment, net		24,002			29,238			29,275
Operating lease right-of-use assets		77,932			89,523			88,126
Deferred and non-current income taxes		54,748			25,403			28,191
Goodwill		—			136,366			135,280
Other intangibles, net		17,123			42,359			43,532
Other non-current assets		56,380			59,865			58,453
Total assets	$	701,778		$	847,308		$	867,055
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	35,562		$	35,488		$	33,757
Accrued liabilities		59,612			44,210			62,499
Accrued payroll and benefits		12,693			6,302			9,353
Current operating lease liabilities		14,210			15,083			14,579
Income taxes payable		11,275			8,217			17,243
Total current liabilities		133,352			109,300			137,431
Loans payable to bank		37,266			51,910			50,685
Deferred and non-current income taxes payable		20,893			25,419			26,370
Non-current operating lease liabilities		71,658			81,877			80,682
Other non-current liabilities		45,179			48,393			47,943
Total liabilities		308,348			316,899			343,111
Commitments and contingencies (Note 12)
Redeemable noncontrolling interest		2,772			3,165			3,263
Equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued		—			—			—
Common Stock, $0.01 par value, 100,000,000 shares authorized; 28,077,806, 27,859,328 and 27,856,954 shares issued and outstanding, respectively		281			279			279
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,608,548, 6,603,645 and 6,603,645 shares issued and outstanding, respectively		65			65			65
Capital in excess of par value		212,730			208,473			206,725
Retained earnings		313,696			455,479			456,579
Accumulated other comprehensive income		85,879			85,050			79,825
Treasury Stock, 11,492,591, 11,443,308 and 11,442,625 shares, respectively, at cost		(223,306	)		(222,809	)		(222,792	)
Total Movado Group, Inc. shareholders' equity		389,345			526,537			520,681
Noncontrolling interest		1,313			707			—
Total equity		390,658			527,244			520,681
Total liabilities, redeemable noncontrolling interest and equity	$	701,778		$	847,308		$	867,055

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2020			2019			2020			2019
Net sales	$	169,863		$	205,618		$	328,067		$	509,983
Cost of sales		77,410			95,549			158,365			235,702
Gross profit		92,453			110,069			169,702			274,281
Selling, general and administrative		69,386			87,431			181,795			237,893
Impairment of goodwill and intangible assets (Note 7)		—			—			155,919			—
Total operating expenses		69,386			87,431			337,714			237,893
Operating income/(loss)		23,067			22,638			(168,012	)		36,388
Non-operating income/(expense):
Gain on sale of a non-operating asset		—			—			1,317			—
Change in contingent consideration (Note 11)		—			—			—			13,627
Interest expense		(608	)		(240	)		(1,469	)		(689	)
Interest income		8			18			31			63
Income/(loss) before income taxes		22,467			22,416			(168,133	)		49,389
Provision/(benefit) for income taxes (Note 13)		7,524			4,955			(26,365	)		10,543
Net income/(loss)		14,943			17,461			(141,768	)		38,846
Less: Net income/(loss) attributable to noncontrolling interests		118			(304	)		15			(349	)
Net income/(loss) attributable to Movado Group, Inc.	$	14,825		$	17,765		$	(141,783	)	$	39,195

Basic income/(loss) per share:
Weighted basic average shares outstanding		23,285			23,117			23,223			23,124
Net income/(loss) per share attributable to Movado Group, Inc.	$	0.64		$	0.77		$	(6.11	)	$	1.69

Diluted income/(loss) per share:
Weighted diluted average shares outstanding		23,375			23,250			23,223			23,322
Net income/(loss) per share attributable to Movado Group, Inc.	$	0.63		$	0.76		$	(6.11	)	$	1.68

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2020			2019			2020			2019
Net income/(loss)	$	14,943		$	17,461		$	(141,768	)	$	38,846
Other comprehensive income/(loss):
Net unrealized gain/(loss) on investments, net of tax provision/(benefit) of $1, $(3), $(10) and $0, respectively		1			(8	)		(31	)		-
Amortization of prior service cost, net of tax provision of $4, $4, $12 and $11, respectively		14			13			42			39
Foreign currency translation adjustments		(245	)		5,614			818			(721	)
Total other comprehensive (loss)/income, net of taxes		(230	)		5,619			829			(682	)
Less:
Comprehensive income/(loss) attributable to noncontrolling interests:
Net income/(loss)		118			(304	)		15			(349	)
Foreign currency translation adjustments		(58	)		27			198			(109	)
Total comprehensive income/(loss) attributable to noncontrolling interests	$	60		$	(277	)	$	213		$	(458	)
Total comprehensive income/(loss) attributable to Movado Group, Inc.	$	14,653		$	23,357		$	(141,152	)	$	38,622

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended October 31,
	2020			2019
Cash flows from operating activities:
Net (loss)/income attributable to Movado Group, Inc.	$	(141,783	)	$	39,195
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Impairment of goodwill and intangible assets		155,919			—
Non-cash corporate initiatives		6,685			—
Change in contingent consideration		-			(13,627	)
Gain on sale of a non-operating asset		(1,317	)		—
Depreciation and amortization		10,546			11,888
Transactional losses/(gains)		231			309
Provision for inventories and accounts receivable		2,066			2,626
Deferred income taxes		(31,536	)		(6,462	)
Stock-based compensation		3,848			4,658
Other		306			(435	)
Changes in assets and liabilities:
Trade receivables		(26,835	)		(52,659	)
Inventories		(7,073	)		(38,064	)
Other current assets		(821	)		(2,407	)
Accounts payable		40			(4,184	)
Accrued liabilities		15,929			19,271
Accrued payroll and benefits		6,124			(9,379	)
Income taxes payable		516			6,407
Other non-current assets		(347	)		640
Other non-current liabilities		796			(2,347	)
Net cash used in operating activities		(6,706	)		(44,570	)
Cash flows from investing activities:
Capital expenditures		(2,428	)		(10,023	)
Proceeds from sale of a non-operating asset		1,317			—
Proceeds from sale of an asset held for sale		—			242
Trademarks and other intangibles		(118	)		(194	)
Net cash used in investing activities		(1,229	)		(9,975	)
Cash flows from financing activities:
Repayment of bank borrowings		(47,699	)		—
Proceeds from bank borrowings		30,879			—
Stock awards and options exercised and other changes		(497	)		(1,249	)
Stock repurchase		—			(4,199	)
Dividends paid		—			(13,796	)
Debt issuance cost		(300	)		—
Net cash used in financing activities		(17,617	)		(19,244	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		2,926			(93	)
Net decrease in cash, cash equivalents and restricted cash		(22,626	)		(73,882	)
Cash, cash equivalents, and restricted cash at beginning of year		186,438			190,459
Cash, cash equivalents, and restricted cash at end of period	$	163,812		$	116,577

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	163,218		$	116,025
Restricted cash included in other non-current assets		594			552
Cash, cash equivalents, and restricted cash	$	163,812		$	116,577

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying interim unaudited Consolidated Financial Statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 (the “2020 Annual Report on Form 10-K”). The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the periods reported. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The consolidated balance sheet data at January 31, 2020 is derived from the audited annual financial statements, which are included in the Company’s 2020 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.

NOTE 2 – IMPACT OF THE COVID-19 PANDEMIC

In December 2019, COVID-19 emerged and subsequently spread worldwide. The World Health Organization declared COVID-19 a pandemic in March 2020, resulting in federal, state and local governments and other authorities mandating various restrictions, including travel restrictions, quarantines and other social distancing requirements. As a result of the outbreak, in mid-March 2020, the Company and the majority of the Company’s wholesale customers temporarily closed all of their retail stores due to health concerns associated with COVID-19. Although the Company reopened all of its retail stores during the second quarter and most of the Company’s brick and mortar wholesale customers have reopened the majority of their retail locations as well, the discretionary consumer goods segment remains highly challenged at brick and mortar retail locations worldwide.

The Company entered this period of uncertainty with a healthy liquidity position, and it took actions to enhance its financial liquidity and flexibility, including minimizing all non-essential operating expenses (including marketing, travel and consulting services), reevaluating all capital expenditures, furloughing approximately 80% of the Company’s North American workforce during March through June and temporarily reducing the work-rate of international employees while applying for available government payroll subsidies in accordance with local government guidelines and programs, suspending the Company’s share repurchase program and regular quarterly dividends, reducing salaries and suspending Board of Director fees from April through June 2020, amending license agreements to reduce its royalty obligations in fiscal 2021 and negotiating rent abatements in respect of its rent obligations for its Company Stores and certain other leases. As a precautionary measure, the Company borrowed an additional $30.9 million under its revolving credit facility in March 2020 and amended its revolving credit facility to modify some of its financial covenants (see Note 9 – Debt and Lines of Credit). During the second and third quarter of fiscal 2021, the Company repaid $36.8 million and $10.9 million, respectively, under its revolving credit facility.

As part of the Company’s efforts to continue to reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic, the Company committed to a restructuring plan (the “Restructuring Plan”) on June 29, 2020 (see Note 6 – Restructuring Provision for further discussion).

The Company evaluates its long-lived assets, operating lease right of use assets, goodwill and intangible assets for indicators of impairment at least annually in the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Given the substantial reduction in the Company’s sales and the reduced cash flow projections as a result of closures of the Company’s retail stores and its wholesale customers due to the COVID-19 pandemic, as well as the significant decline in the Company’s market capitalization, the Company determined that a triggering event occurred during the first quarter of fiscal 2021 and that an impairment assessment was warranted for goodwill and intangible assets. This analysis resulted in impairment charges related to goodwill of $133.7 million and intangible assets of $22.2 million in the first quarter of fiscal 2021. See Note 7 – Goodwill and Intangible Assets – for a further discussion of these impairments.

Although the full magnitude of the effects on the Company’s business is difficult to predict at this time, the COVID-19 pandemic has had, and for the foreseeable future is expected to continue to have, a material impact on the Company’s business, financial condition, results of operations and cash flows. In addition to the resurgence of COVID-19 cases in many regions in the fall which has resulted in the tightening of containment and mitigation measures in many countries, the ongoing economic impacts and health concerns associated with the pandemic will likely continue to affect consumer behavior, spending levels, shopping preferences and tourism. Nevertheless, the Company believes that based on the Company’s current expectations, cash flows from operations and its credit lines and cash on-hand, the Company has adequate funds to support its operating, capital and debt service requirements and expects to maintain compliance with its debt covenants for the next twelve months subsequent to the issuance of these financial statements.

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued ASU 2020-03, “Codification Improvements to Financial Instruments”, which makes improvements to financial instruments guidance, including the current expected credit losses guidance. The adoption of the new guidance was not material to the Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. This guidance provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Company’s borrowing instruments, which use LIBOR as a reference rate, and is effective immediately, but is only available through December 31, 2022. The Company is evaluating the optional expedients and exceptions in the guidance but does not except the adoption of this standard to have a material impact on its Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in “Income Taxes (Topic 740)”. It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company early adopted this standard effective February 1, 2020. The provision of ASU 2019-12 which has the most significant impact on the Company is the removal of a limitation on the tax benefit recognized on pre-tax losses during interim periods which exceed the expected loss for the fiscal year. The Company’s income tax benefit for the nine months ended October 31, 2020 includes an income tax benefit of $0.5 million as a result of early adoption in the first quarter of fiscal 2021.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies the disclosure requirements in ASC 820, Fair Value Measurement. The Company adopted ASU 2018-13 during the first quarter of fiscal 2021. The adoption of this guidance did not have an impact on the Company’s Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequently issued additional guidance that modified ASU 2016-13. This standard introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This may result in the earlier recognition of allowance for losses. The Company adopted ASU 2016-13 on February 1, 2020. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. Results for reporting periods as of February 1, 2020 are presented under the new standard, while prior results continue to be reported under the previous standard.

NOTE 4 – EARNINGS PER SHARE AND CASH DIVIDENDS

The Company presents net income/(loss) attributable to Movado Group, Inc. after adjusting for noncontrolling interests, as applicable, per share on a basic and diluted basis. Basic earnings per share is computed using weighted-average shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of shares outstanding adjusted for dilutive common stock equivalents.

The number of shares used in calculating basic and diluted earnings (loss) per share is as follows (in thousands):

	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Weighted average common shares outstanding:
Basic		23,285		23,117		23,223		23,124
Effect of dilutive securities:
Stock awards and options to purchase shares of common stock		90		133		—		198
Diluted		23,375		23,250		23,223		23,322

For the three months ended October 31, 2020 and 2019, approximately 889,000 and 786,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. For the nine months ended October 31, 2020 and 2019, approximately 815,000 and 352,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. For the nine months ended October 31, 2020, the Company also had approximately 80,000 stock options outstanding that could potentially dilute earnings per share in future periods that were excluded from the computation of diluted EPS because their effect would have been anti-dilutive given the net loss during the period.

During the first three quarters of fiscal 2021, the Company did not declare quarterly cash dividends. The Company declared quarterly cash dividends of $0.20 in each of the first three quarters of fiscal year 2020, representing $13.8 million in total dividends. Of this amount, $4.6 million was paid on September 24, 2019, $4.6 million was paid on June 25, 2019 and $4.6 million was paid on April 24, 2019.

NOTE 5 – ACQUISITIONS

Australia

On November 22, 2019, the Company entered into an agreement and formed a joint venture with GDL Accessories PTY Ltd. (“GDL”), an Australian based company which distributed the Company’s products in Australia and New Zealand. The agreement established a joint venture, MGDL Distribution Pty Ltd (“MGDL”), and set out the terms in which both parties will govern their relationship as shareholders of MGDL, and the terms on which the joint venture will be managed.

The joint venture was formed to more cost effectively market and distribute Movado products to customers in Australia and in New Zealand.

The Company contributed 0.9 million Australian dollars (equivalent to approximately $0.6 million US dollars) to the joint venture and is a 51% interest holder. The Company controls all of the significant participating rights of the joint venture. As the Company controls all of the significant participating rights of the joint venture and is the majority interest holder in MGDL, the assets, liabilities and results of operations of the joint venture are consolidated and included in the Company’s Consolidated Financial Statements since the date of acquisition within the Watch and Accessory Brands segment. GDL’s interest is reflected in Net income attributable to noncontrolling interest in the Consolidated Statements of Operations and Noncontrolling interest in the Consolidated Balance Sheets. As of October 31, 2020, all amounts in the Consolidated Financial Statements related to MGDL were immaterial.

City Time

On December 3, 2018, the Company acquired 51% of City Time Distribucion, S.L.U. (“City Time”), the Company’s distributor in Spain, and simultaneously signed a joint venture agreement. The purchase price was 4.2 million Euros (equivalent to approximately $4.8 million US dollars), net of cash acquired, and was funded with cash on hand. The results of City Time have been included in the Company’s Consolidated Financial Statements since the date of acquisition within the Watch and Accessory Brands segment. Of the total purchase consideration, there were no material amounts allocated to assets acquired and liabilities assumed.

Pursuant to the joint venture agreement, the noncontrolling interest holder has the right to sell its interest in City Time to the Company on two specific dates in the future. The noncontrolling interest is not redeemable until such dates. The Company will adjust the carrying value of the redeemable interest to the redemption amount assuming it was redeemable at the balance sheet date. At October 31, 2020, the Company concluded that no remeasurement adjustment was needed. If the noncontrolling interest holder does not exercise its right to sell its interest in City Time to the Company, the Company nevertheless has the option to purchase the noncontrolling interest holder’s interest on each of the same two dates and at the same price as would have applied if the noncontrolling interest holder had exercised its sale option.

MVMT

On October 1, 2018, the Company acquired MVMT Watches, Inc., owner of the MVMT brand, for an initial payment of $100.0 million and two future contingent payments that combined could total up to an additional $100.0 million before tax benefits. The exact amount of the future payments will be determined by MVMT's future financial performance with no minimum required future payment. After giving effect to the closing adjustments, the purchase price was $108.4 million, net of cash acquired of $3.8 million. The Company recorded goodwill (as of October 1, 2018) of $77.5 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. As the structure of the acquisition allowed for a step up in basis for tax purposes, the full amount of goodwill is deductible for federal income tax purposes over 15 years.

The acquisition agreement included a contingent consideration arrangement based on the MVMT brand achieving certain revenue and EBITDA (as defined in the acquisition agreement) targets. In connection therewith, the Company recorded a non-current liability of $16.5 million as of the date of acquisition to reflect the estimated fair value of the contingent purchase price. $14.5 million was allocated to purchase price and $2.0 million to deferred compensation expense based on future employee service requirements.

The estimated fair value of the contingent consideration was determined using a Monte Carlo simulation that includes key assumptions regarding MVMT’s projected financial performance during the earn-out period (through 2023), volatilities, estimated discount rates, risk-free interest rate, and correlation. Based on changes in projected financial performance, the contingent purchase price liability had been remeasured at July 31, 2019 to $1.9 million and to zero at January 31, 2020. Of the $16.9 million (including interest accretion) decrease in the liability, $15.4 million was included in non-operating income (portion of contingent consideration allocated to purchase price) in the Consolidated Statements of Operations for the year ended January 31, 2020, and $0.5 million and $1.0 million were reflected as a reduction of deferred compensation (portion of contingent consideration allocated to deferred compensation based on future service requirements) within other current assets and other non-current assets, respectively, in the Consolidated Balance Sheets.

In connection with the remeasurement of the contingent consideration during the fiscal year ended January 31, 2020, the Company assessed the undiscounted cash flows associated with the long-lived assets pertaining to MVMT. Current estimates at that time indicated that carrying amounts were expected to be recovered. The undiscounted cash flows related to the MVMT long-lived assets as of January 31, 2020 exceeded the carrying value by approximately 33%. See Note 7 – Goodwill and Intangible Assets for impairment of MVMT’s long-lived assets as of October 31, 2020.

NOTE 6 – RESTRUCTURING PROVISION

On June 29, 2020, the Company committed to a Restructuring Plan as part of the Company’s corporate initiatives to reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the Company’s business. The Restructuring Plan was substantially completed during the second quarter of the Company’s current fiscal year, although cash severance will be paid over time and such payments are expected to continue into the next fiscal year. During the quarter ended October 31, 2020, the Company recorded an additional $0.8 million primarily related to additional severance and conclusion in negotiations on certain leased properties and consulting arrangements. Of the total provision incurred, approximately $8.7 million is expected to result in cash expenditures with the remaining $6.7 million resulting in non-cash use. The Company expects annual savings in the range of $14 million to $16 million as it relates to severance, employee related and properties (contained within Other in table below).

A summary rollforward of the provision related to the Company’s corporate initiatives, including the provision associated with the Restructuring Plan, is as follows for the three months ended October 31, 2020 (in thousands):

	Balance July 31, 2020		Provision		Non-Cash Use			Cash Payments			Balance October 31, 2020
Restructuring Plan:
Severance and Employee Related	$	5,806	$	144	$	—		$	(2,784	)	$	3,166
Other		89		631		(117	)		(536	)		67
Corporate Initiative:
Severance and Employee Related		541		—		—			(541	)		-
Inventory		3,460		—		(203	)		—			3,257
Accounts receivable		1,075		—		—			—			1,075
Other		37		6		—			(15	)		28
Total	$	11,008	$	781	$	(320	)	$	(3,876	)	$	7,593

A summary rollforward of the provision related to the Company’s corporate initiatives, including the provision associated with the Restructuring Plan, is as follows for the nine months ended October 31, 2020 (in thousands):

	Balance January 31, 2020		Provision		Non-Cash Use			Cash Payments			Balance October 31, 2020
Restructuring Plan:
Severance and Employee Related (1)	$	—	$	7,110	$	—		$	(3,944	)	$	3,166
Other (2)		—		1,033		(315	)		(651	)		67
Corporate Initiative:
Severance and Employee Related		—		936		—			(936	)		—
Inventory (3)		—		3,507		(250	)		—			3,257
Accounts receivable (4)		—		1,075		—			—			1,075
Other (2)		—		1,728		(1,518	)		(182	)		28
Total	$	—	$	15,389	$	(2,083	)	$	(5,713	)	$	7,593

The following amounts are included in the Consolidated Balance Sheet at October 31, 2020:

(1)

$2.8 million included in Accrued payroll and benefits and $0.4 million included in Capital in excess of par value.

(2)

Balance included in Accrued liabilities.

(3)

Reserve included in Inventories.

(4)

Reserve included in Trade receivables, net.

Included in Other is approximately a $1.5 million write-off related to unrefunded deposits for a canceled global customer event.

The corporate initiative costs by operating segment are as follows:

	For the Three Months Ended October 31, 2020 Provision		For the Nine Months Ended October 31, 2020 Total
Watch and Accessory Brands:
United States	$	594	$	11,929
International		187		3,460
Total Watch and Accessory Brands		781		15,389
Total Company Stores		—		—
Total Consolidated	$	781	$	15,389

Cost of sales	$	43	$	3,551
Selling, general and administrative		738		11,838
Total	$	781	$	15,389

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal year or if an event occurs that would more likely than not reduce the fair value below its carrying amount.

During the three months ended April 30, 2020, in light of the COVID-19 pandemic that resulted in the closing of the Company’s stores and of the vast majority of the stores of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), a decrease in customer spending and the recent decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred during the first quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets as well as the Watch and Accessory Brands reporting unit.

The Company performed recoverability tests for the long-lived assets of MVMT, Olivia Burton and the Company Stores as of April 30, 2020. The Company concluded that the carrying amounts of the long-lived assets of Olivia Burton and the Company Stores were recoverable, while the long-lived assets of MVMT may not be recoverable. Utilizing a royalty rate to determine discounted projected future cash flows in the valuation of MVMT’s trade name and a discounted cash flow method for the valuation of MVMT’s customer relationships, the Company concluded that the fair values of MVMT’s tradenames and customer relationships did not exceed their carrying values. As a result, the Company recorded impairment charges in the Watch and Accessory Brands segment totaling $22.2 million in the first quarter of fiscal 2021, decreasing MVMT’s trade name to $2.4 million and MVMT’s customer relationships to zero.

After adjusting the carrying value of MVMT’s intangible assets, the Company completed an interim quantitative impairment test of goodwill as of April 30, 2020 in which the Company compared the fair value of the Watch and Accessory Brands reporting unit to its respective carrying value. An impairment test of goodwill was not performed for the Company Stores reporting unit as there was no goodwill at this reporting unit. The fair value estimate for the Watches and Accessory reporting unit was based on the income and market approaches. The discounted cash flow method under the income approach involves estimating the cash flows in a discrete forecast period and a terminal value based on the Gordon Growth Model and discounting at a rate of return that reflects the relative risk of the cash flows. The market approach involves applying valuation multiples to the operating performance of the Watch and Accessory Brands reporting unit derived from comparable publicly traded companies based on the relative historical and projected operations of the reporting unit.

The key estimates used in the discounted cash flows model included the Company’s weighted average cost of capital and projected cash flows, notably revenue growth rates and margin assumptions. The Company’s assumptions were based on the actual historical performance of the reporting units and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of the Company’s common stock as of the assessment date. The significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the Watch and Accessory Brands unit’s carrying value over the estimate of the fair value was recorded in the Watch and Accessory Brands segment as the goodwill impairment charge in the first quarter of 2021, totaling $133.7 million.

The changes in the carrying amount of other intangible assets during the nine months ended October 31, 2020 are as follows (in thousands):

	Trade names			Customer relationships			Other (1)			Total
Weighted Average Amortization Period (in years)	10			7			9
Balance at January 31, 2020	$	31,075		$	10,154		$	1,130		$	42,359
Impairment		(18,595	)		(3,570	)		—			(22,165	)
Additions		—			—			118			118
Amortization		(1,487	)		(1,242	)		(232	)		(2,961	)
Foreign exchange impact		(224	)		(32	)		28			(228	)
Balance at October 31, 2020	$	10,769		$	5,310		$	1,044		$	17,123

(1)	Other includes fees paid related to trademarks and non-compete agreement related to Olivia Burton brand.

Amortization expense for intangible assets was $0.9 million and $1.5 million for the three months ended October 31, 2020 and 2019, respectively, and $3.0 million and $4.6 million for the nine months ended October 31, 2020 and 2019, respectively.

NOTE 8 – INVENTORIES

Inventories consisted of the following (in thousands):

	October 31, 2020		January 31, 2020		October 31, 2019
Finished goods	$	130,515	$	125,603	$	154,758
Component parts		42,438		41,708		42,976
Work-in-process		3,888		4,095		3,430
	$	176,841	$	171,406	$	201,164

NOTE 9 – DEBT AND LINES OF CREDIT

On October 12, 2018, the Company, together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (together with the Company, the “U.S. Borrowers”), each a wholly owned domestic subsidiary of the Company, and Movado Watch Company S.A. and MGI Luxury Group S.A. (collectively, the “Swiss Borrowers” and, together with the U.S. Borrowers, the “Borrowers”), each a wholly owned Swiss subsidiary of the Company, entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement amends and restates the Company’s prior credit agreement dated as of January 30, 2015 (the “Prior Credit Agreement”) and extends the maturity of the $100.0 million senior secured revolving credit facility (the “Facility”) provided thereunder to October 12, 2023. The Facility includes a $15.0 million letter of credit subfacility, a $25.0 million swingline subfacility and a $75.0 million sublimit for borrowings by the Swiss Borrowers, with provisions for uncommitted increases to the Facility of up to $50.0 million in the aggregate subject to customary terms and conditions.

On June 5, 2020, the Company and its lenders entered into an amendment (the “Second Amendment”) to the Credit Agreement effective as of April 30, 2020. Among other things, the Second Amendment provides for the following temporary relief with respect to the financial maintenance covenants in the Credit Agreement from April 30, 2020 through the date on which the Company delivers a compliance certificate in respect of the period ended July 31, 2021 (or earlier if the Company demonstrates satisfaction of certain earnings and leverage milestones) (the “Suspension Period”): (i) the maximum consolidated leverage ratio is increased from 2.50 to 1.0 to 2.75 to 1.0 for the four quarter period ended April 30, 2020 and suspended thereafter until the end of the Suspension Period when it resumes at 2.50 to 1.0 and (ii) the minimum EBITDA covenant levels are reduced. In addition, the Second Amendment provides that (i) through April 30, 2021, the Company is required to maintain minimum liquidity (comprised of unrestricted cash and cash equivalents and unutilized commitments under the Credit Agreement) of $100.0 million, (ii) during the Suspension Period, certain covenants, including covenants related to dividends, share repurchases, debt incurrence, investments and capital expenditures, have been tightened and (iii) during the Suspension Period, the interest rate for borrowings under the Credit Agreement is increased to LIBOR plus 2.75% per annum and the commitment fee in respect of the unutilized commitments is increased to 0.45% per annum. In addition, the Second Amendment permanently increased the LIBOR floor for loans under the Credit Agreement from 0% to 1.00% and permanently reduced the minimum EBITDA financial covenant level to $35.0 million starting with the four-quarter period ending July 31, 2021.

As of October 31, 2020, and October 31, 2019, there was 25.0 million and 50.0 million in Swiss Francs, respectively (with a dollar equivalent of $27.3 million and $50.7 million, respectively), in addition to $10.0 million as of October 31, 2020, in loans outstanding under the Facility. Availability under the Facility was reduced by the aggregate number of letters of credit outstanding, issued in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada, totaling approximately $0.3 million at both October 31, 2020 and October 31, 2019. At October 31, 2020, the letters of credit have expiration dates through June 1, 2021. As of October 31, 2020, and October 31, 2019, availability under the Facility was $62.4 million and $49.0 million, respectively.

The Company had weighted average borrowings under the facility of $44.5 million and $50.6 million during the three months ended October 31, 2020 and 2019, respectively, with a weighted average interest rate of 3.75% and 1.00% during the three months ended October 31, 2020 and 2019, respectively. The Company had weighted average borrowings under the facility of $60.5 million and $50.2 million, with a weighted average interest rate of 2.37% and 1.00% during the nine months ended October 31, 2020 and 2019, respectively.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of October 31, 2020, and 2019, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.1 million and $6.6 million, respectively. As of October 31, 2020, and 2019, there were no borrowings against these lines. As of October 31, 2020, and 2019, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.3 million and $1.2 million, respectively, in various foreign currencies, of which $0.6 million, in both periods, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $1.3 million and $0.5 million for the nine-month period ended October 31, 2020 and October 31, 2019, respectively.

NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS

As of October 31, 2020, the Company’s entire net forward contracts hedging portfolio consisted of 21.6 million Chinese Yuan equivalent, 6.0 million Swiss Francs equivalent, 20.0 million US dollars equivalent, 24.0 million Euros equivalent and 5.6 million British Pounds equivalent with various expiry dates ranging through January 12, 2021. These forward contracts are not designated as qualified hedges in accordance with ASC 815, Derivatives and Hedging, and, therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise. Net gains or losses related to these forward contracts are included in cost of sales and selling and general and administrative expenses in the Consolidated Statements of Operations. The cash flows related to these foreign currency contracts are classified in operating activities.

See Note 11 – Fair Value Measurements for fair value and presentation in the Consolidated Balance Sheets for derivatives.

For the quarter ended October 31, 2020, the Company did not have any cash flow hedges.

NOTE 11 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

•

Level 3 – Unobservable inputs based on the Company’s assumptions.

The guidance requires the use of observable market data if such data is available without undue cost and effort.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of October 31, 2020 and 2019 and January 31, 2020 (in thousands):

		Fair Value at October 31, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	143	$	—	$	—	$	143
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		1,020		—		—		1,020
SERP assets - employee	Other non-current assets		42,040		—		—		42,040
Defined benefit plan assets	Other non-current liabilities		—		—		25,206		25,206
Total		$	43,359	$	—	$	25,206	$	68,565
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	42,040	$	—	$	—	$	42,040
Hedge derivatives	Accrued liabilities		—		12		—		12
Total		$	42,040	$	12	$	—	$	42,052

		Fair Value at January 31, 2020
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	184	$	—	$	—	$	184
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		988		—		—		988
SERP assets - employee	Other non-current assets		45,256		—		—		45,256
Defined benefit plan assets	Other non-current liabilities		—		—		24,227		24,227
Hedge derivatives	Other current assets		—		347		—		347
Total		$	46,584	$	347	$	24,227	$	71,158
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	45,264	$	—	$	—	$	45,264
Total		$	45,264	$	—	$	—	$	45,264

		Fair Value at October 31, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	177	$	—	$	—	$	177
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		1,280		—		—		1,280
SERP assets - employee	Other non-current assets		43,049		—		—		43,049
Defined benefit plan assets	Other non-current liabilities		—		—		33,312		33,312
Hedge derivatives	Other current assets		—		79		—		79
Total		$	44,662	$	79	$	33,312	$	78,053
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	43,049	$	—	$	—	$	43,049
Hedge derivatives	Accrued liabilities		—		83		—		83
Contingent consideration	Other non-current liabilities		—		—		1,918		1,918
Total		$	43,049	$	83	$	1,918	$	45,050

The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of October 31, 2020, January 31, 2020, and October 31, 2019, due to the availability and floating rate for similar instruments.

The Company sponsors a defined benefit pension plan in Switzerland. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis. The assets within the plan are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data. The value of the assets is part of the funded status of the defined benefit plan and included in other non-current liabilities in the consolidated balance sheets at October 31, 2020, January 31, 2020 and October 31, 2019.

The contingent purchase price liability related to the acquisition of MVMT Watches, Inc., owner of the MVMT brand at the time of the acquisition, is considered a Level 3 liability. Based on updated revenue and EBITDA (as defined in the acquisition agreement) performance expectations during the earn-out period for MVMT, the Company remeasured the contingent consideration to zero at January 31, 2020. At July 31, 2019 the Company remeasured the contingent consideration to $1.9 million and, as a result, $13.6 million is included in non-operating income (portion of contingent consideration allocated to purchase price) in the Consolidated Statements of Operations for the nine months ended October 31, 2019, and $0.5 million and $0.9 million are reflected as a reduction of deferred compensation (portion of contingent consideration allocated to deferred compensation based on future service requirements) within other current assets and other non-current assets, respectively, in the Consolidated Balance Sheets. As the remeasurement is not a direct benefit realized from operating the MVMT business, the Company recorded the change in contingent consideration within non-operating income in the Consolidated Statements of Operations and as such, did not include it in operating income for the Watch and Accessory Brands segment. Refer to Note 19 for Segment and Geographic Information.

The following tables present the change in the Level 3 contingent purchase price liability during the three and nine months ended October 31, 2019:

	Three Months Ended October 31,
(In thousands)	2019
Balance at July 31, 2019	$	1,900
Payments		—
Adjustments included in income before income taxes		18
Adjustments to deferred compensation		—
Ending Balance	$	1,918

	Nine Months Ended October 31,
(In thousands)	2019
Balance at January 31, 2019	$	16,718
Payments		—
Adjustments included in income before income taxes		(13,443	)
Adjustments to deferred compensation		(1,357	)
Ending Balance	$	1,918

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

The Company has minimum commitments related to the Company’s license agreements and endorsement agreements with brand ambassadors. The Company sources, distributes, advertises and sells watches pursuant to its exclusive license agreements with unaffiliated licensors. Royalty amounts under the license agreements are generally based on a stipulated percentage of revenues, although most of these agreements contain provisions for the payment of minimum annual royalty amounts. The license agreements have various terms, and some have renewal options, provided that minimum sales levels are achieved. Additionally, the license agreements require the Company to pay minimum annual advertising amounts.

The Company had previously recorded an obligation of $28.2 million due to the 2017 Tax Act, which was signed into law on December 22, 2017 and imposed a one-time mandatory deemed repatriation tax on cumulative undistributed foreign earnings which have not been previously taxed. The obligation, which was recorded in prior years, is payable in installments over eight years, with the first payment having been made in the second quarter of fiscal 2019.

The Company believes that income tax reserves are adequate; however, amounts asserted by taxing authorities could be greater or less than amounts accrued and reflected in the consolidated balance sheet. Accordingly, the Company could record adjustments to the amounts for federal, state, and foreign liabilities in the future as the Company revises estimates or settles or otherwise resolves the underlying matters. In the ordinary course of business, the Company may take new positions that could increase or decrease unrecognized tax benefits in future periods.

In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputes the reasonableness of the Company’s historical allocation formulas and proposes an alternative methodology that would imply $5.1 million in underpaid duties over the five-year period covered by the statute of limitations, plus possible penalties and interest. The Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. On February 24, 2017, the Company provided U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation formulas and thereafter provided additional information for U.S. Customs’ review. Although the Company disagrees with U.S. Customs’ position, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a mutually satisfactory resolution.

The purchase consideration for the MVMT business included two future contingent payments that combined could total up to $100 million. Based on updated revenue and EBITDA (as defined in the acquisition agreement) performance expectations during the earn-out period for MVMT, the Company remeasured the contingent consideration to zero at January 31, 2020 (see Note 5 – Acquisitions and Note 11 – Fair Value Measurements).

The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made. As of October 31, 2020, the Company is party to legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows.

NOTE 13 – INCOME TAXES

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which provides economic relief to assist American families and companies during the COVID-19 global pandemic. The CARES Act includes, among other things, provisions related to net operating loss carryback periods, refundable payroll tax credits and the delay of certain payroll taxes, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allows U.S. net operating losses generated in fiscal 2019, 2020, and 2021 to be carried back up to five years to prior taxable years with a U.S. statutory tax rate of 35.0% and to offset 100% of regular taxable income in such years (the “CARES Act NOL Carryback Provision”). The Company anticipates that there will be a U.S. net operating loss generated in fiscal 2021 which will be carried back to prior taxable years.

The Company recorded an income tax provision of $7.5 million and $5.0 million for the three months ended October 31, 2020 and 2019, respectively.

The effective tax rate was 33.5% and 22.1% for three months ended October 31, 2020 and 2019, respectively. The significant components of the effective tax rate changed primarily due to the U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and excess tax deficiencies related to stock-based compensation, partially offset by the CARES Act NOL Carryback Provision.

The Company recorded an income tax benefit of $26.4 million and income tax provision of $10.5 million for the nine months ended October 31, 2020 and 2019, respectively.

The effective tax rate was 15.7% and 21.3% for the nine months ended October 31, 2020 and 2019, respectively. The significant components of the effective tax rate changed primarily due to impairments of the portion of goodwill of the Watch and Accessory Brands reporting unit which is not tax deductible, the U.S. tax on GILTI and the recording of valuation allowances on certain foreign deferred tax assets. These changes were partially offset by changes in foreign profits in lower tax jurisdictions and the CARES Act NOL Carryback Provision.

The effective tax rate for the three months ended October 31, 2020 differs from the U.S. statutory tax rate of 21.0% primarily due to the U.S. tax on GILTI and excess tax deficiencies related to stock-based compensation, partially offset by foreign profits being taxed in lower taxing jurisdictions and the CARES Act NOL Carryback Provision. The effective tax rate for the nine months ended October 31, 2020 differs from the U.S. statutory tax rate of 21.0% primarily due to impairments of the portion of goodwill of the Watch and Accessory Brands reporting unit which is not tax deductible and the U.S. tax on GILTI, partially offset by the CARES Act NOL Carryback Provision.

The effective tax rate for the three and nine months ended October 31, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to no tax benefit being recognized on losses incurred by certain foreign operations, partially offset by foreign profits being taxed in lower taxing jurisdictions.

In December 2019, the FASB issues ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in “Income Taxes (Topic 740)”. It also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020. The Company early adopted this standard effective February 1, 2020. The provision of ASU 2019-12 which has the most significant impact on the Company is the removal of a limitation on the tax benefit recognized on pre-tax losses during interim periods which exceed the expected loss for the fiscal year. The Company’s income tax benefit for the nine months ended October 31, 2020 includes an income tax benefit of $0.5 million as a result of early adoption in the first quarter of fiscal 2021.

As of October 31, 2020, the Company had no deferred tax liability for the undistributed foreign earnings of approximately $211.1 million because the Company intends to continue permanently reinvesting such earnings in its foreign operations. It is not practicable to estimate the tax liability related to a future distribution of these permanently reinvested foreign earnings.

NOTE 14 – EQUITY

The components of equity for the nine months ended October 31, 2020 and 2019 are as follows (in thousands):

			Movado Group, Inc. Shareholders' Equity
	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest		Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2020	$	—	$	279	$	65	$	208,473		$	455,479		$	85,050		$	(222,809	)	$	707	$	527,244		$	3,165
Net income/(loss) attributable to Movado Group, Inc.											(141,783	)								571		(141,212	)		(556	)
Stock options exercised				2				(2	)								(497	)				(497	)
Supplemental executive retirement plan								69														69
Stock-based compensation expense (4)								4,190														4,190
Net unrealized loss on investments, net of tax benefit of $10														(31	)							(31	)
Amortization of prior service cost, net of tax provision of $12														42								42
Foreign currency translation adjustment (3)														818						35		853			163
Balance, October 31, 2020	$	—	$	281	$	65	$	212,730		$	313,696		$	85,879		$	(223,306	)	$	1,313	$	390,658		$	2,772

	Preferred Stock		Common Stock (1)		Class A Common Stock (2)		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Noncontrolling Interest		Total Movado Group, Inc. Shareholders' Equity			Redeemable Noncontrolling Interest
Balance, January 31, 2019	$	—	$	277	$	65	$	201,814		$	431,180		$	80,507		$	(217,188	)	$	—	$	496,655		$	3,721
Net income/(loss) attributable to Movado Group, Inc.											39,195											39,195			(349	)
Dividends ($0.60 per share)											(13,796	)										(13,796	)
Stock repurchase																	(4,199	)				(4,199	)
Stock options exercised				2				154									(1,405	)				(1,249	)
Supplemental executive retirement plan								99														99
Stock-based compensation expense								4,658														4,658
Amortization of prior service cost, net of tax provision of $11														39								39
Foreign currency translation adjustment (3)														(721	)							(721	)		(109	)
Balance, October 31, 2019	$	—	$	279	$	65	$	206,725		$	456,579		$	79,825		$	(222,792	)	$	—	$	520,681		$	3,263

(1)	Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders.

(2)

Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation, as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares.

(3)	The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries.

(4)	Includes $0.4 million related to the Restructuring Plan of the corporate initiatives.

NOTE 15 – TREASURY STOCK

On August 29, 2017, the Board approved a share repurchase program under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time, depending on market conditions, share price and other factors. Under the share repurchase program, the Company was permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expired on August 29, 2020. See Note 9 – Debt and Lines of Credit – for restrictions on share repurchase under the Company’s revolving credit facility.

During the nine months ended October 31, 2020, the Company did not repurchase shares of its common stock under the repurchase program. During the nine months ended October 31, 2019, the Company repurchased a total of 131,402 shares of its common stock under the share repurchase program at a total cost of $4.2 million, or an average of $31.96 per share.

There were 49,283 and 42,731 shares of common stock repurchased during the nine months ended October 31, 2020 and 2019, respectively, as a result of the surrender of shares in connection with the vesting of certain stock awards. At the election of an employee, shares having an aggregate value on the vesting date equal to the employee’s withholding tax obligation may be surrendered to the Company.

NOTE 16 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The accumulated balances at October 31, 2020 and 2019, and January 31, 2020, related to each component of accumulated other comprehensive income (loss) are as follows (in thousands):

	October 31, 2020			January 31, 2020			October 31, 2019
Foreign currency translation adjustments	$	86,163		$	85,345		$	80,087
Available-for-sale securities		93			124			119
Unrecognized prior service cost related to defined benefit pension plan		(325	)		(367	)		(381	)
Net actuarial loss related to defined benefit pension plan		(52	)		(52	)		—
Total accumulated other comprehensive income	$	85,879		$	85,050		$	79,825

NOTE 17 – REVENUE

Disaggregation of Revenue

The following table presents the Company’s net sales disaggregated by customer type. Sales and usage-based taxes are excluded from net sales (in thousands):

	For the Three Months Ended October 31,				For the Nine Months Ended October 31,
Customer Type	2020		2019		2020		2019
Wholesale	$	135,605	$	168,558	$	248,977	$	402,855
Direct to consumer		33,508		36,059		77,500		104,149
After-sales service		750		1,001		1,590		2,979
Net Sales	$	169,863	$	205,618	$	328,067	$	509,983

The Company’s revenue from contracts with customers is recognized at a point in time. The Company’s net sales disaggregated by geography are based on the location of the Company’s customer (see Note 19 – Segment and Geographic Information).

Wholesale Revenue

The Company’s wholesale revenue consists primarily of revenues from independent distributors, and from department stores, and chain and independent jewelry stores. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied, and control is transferred to the customer. Wholesale revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Wholesale revenue is included entirely within the Watch and Accessory Brands segment (see Note 19 – Segment and Geographic Information), consistent with how management makes decisions regarding the allocation of resources and performance measurement.

Direct to Consumer Revenue

The Company’s direct to consumer revenue primarily consists of revenues from the Company’s outlet stores, concession stores, e-commerce, and consumer repairs. Revenue is recognized as the end consumer obtains delivery of the merchandise. Direct to Consumer revenue is included in either the Watch and Accessory Brands segment or Company Stores Segment based on how the Company makes decisions about the allocation of resources and performance measurement. Direct to Consumer revenue derived from concession stores, e-commerce and consumer repairs is included within the Watch and Accessory Brands segment; revenue derived from outlet stores is included within the Company Stores Segment (see Note 19 – Segment and Geographic Information).

After-Sales Service

All watches sold by the Company come with limited warranties covering the movement against defects in materials and workmanship. The Company does not sell warranties separately.

The Company’s after-sales service revenues consists of out of warranty service provided to customers and authorized third party repair centers, and sale of watch parts. The Company recognizes and records its revenue when obligations under the terms of a contract with the customer are satisfied and control is transferred to the customer. After-sales service revenue is measured as the amount of consideration the Company ultimately expects to receive in exchange for transferring goods. Revenue from after sales service, including consumer repairs, is included entirely within the Watch and Accessory Brands segment, consistent with how management makes decisions about the allocation of resources and performance measurement.

NOTE 18 – STOCK-BASED COMPENSATION

Under the Company’s Employee Stock Option Plan, as amended and restated as of April 4, 2013 (the “Plan”), the Compensation Committee of the Board of Directors, which consists of three of the Company’s non-employee directors, has the authority to grant participants incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and stock awards, for up to 11,000,000 shares of common stock.

Stock Options:

Stock options granted to participants under the plan generally became exercisable in equal installments over three years or cliff-vested after three years and remain exercisable until the tenth anniversary of the date of grant. All stock options granted under the Plan have an exercise price equal to or greater than the fair market value of the Company’s common stock on the grant date.

The table below presents the weighted average assumptions used with the Black-Scholes option-pricing model for the calculation of the fair value of stock options granted during the nine months ended October 31, 2020. There were no stock options granted during the three months ended October 31, 2020 or during the three and nine months ended October 31, 2019.

	Nine Months Ended October 31, 2020
Expected volatility		50.79	%
Expected life in years		6.0
Risk-free interest rates		0.34	%
Dividend rate		4.29	%
Weighted average fair value per option at date of grant	$	3.87

The fair value of the stock options, less expected forfeitures, is amortized on a straight-line basis over the vesting term. Total compensation expense for stock option grants recognized during the three months ended October 31, 2020 and 2019 was approximately $0.1 million for both periods. Total compensation expense for stock option grants recognized during the nine months ended October 31, 2020 and 2019 was $0.2 million and $0.4 million, respectively. As of October 31, 2020, there was $0.6 million of unrecognized compensation cost related to unvested stock options. Total consideration received for stock option exercises during both the three months ended October 31, 2020 and 2019 was zero. Total consideration received for stock option exercises during the nine months ended October 31, 2020 and 2019 was zero and $0.2 million, respectively.

The following table summarizes the Company’s stock options activity during the first nine months of fiscal 2021:

	Outstanding Options		Weighted Average Exercise Price per Option		Option Price Per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value $(000)
Options outstanding at January 31, 2020 (399,905 options exercisable)		561,110	$	28.41	$23.35-$42.12		5.2		$	-
Granted		200,000	$	12.42	$	12.42
Exercised		—
Cancelled		—
Options outstanding at October 31, 2020		761,110	$	24.21	$12.42-$42.12		5.8		$	-
Exercisable at October 31, 2020		561,110	$	28.41			4.4		$	-
Expected to vest at October 31, 2020		172,959	$	12.42				9.6	$	-

There were no stock options exercised during the first nine months of fiscal 2021.

Stock Awards:

Under the Plan, the Company can also grant stock awards to employees and directors. For the three months ended October 31, 2020 and 2019, compensation expense for stock awards was $1.0 million and $1.4 million, respectively. For the nine months ended October 31, 2020 and 2019, compensation expense for stock awards was $4.0 million ($0.4 million is included in the Restructuring Plan of the corporate initiatives) and $4.2 million, respectively. As of October 31, 2020, there was $3.3 million of unrecognized compensation cost related to unvested stock awards.

The following table summarizes the Company’s stock awards activity during the first nine months of fiscal 2021:

	Number of Stock Award Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value $(000's)
Units outstanding at January 31, 2020		490,239		$	33.50	1.4	$	8,442
Units granted		89,289		$	10.02
Units vested		(212,070	)	$	26.05
Units forfeited		(31,084	)	$	31.11
Units outstanding at October 31, 2020		336,374		$	32.19	0.9	$	3,670

Outstanding stock awards can be classified as either time-based stock awards or performance-based stock awards. Time-based stock awards vest over time subject to continued employment. Performance-based stock awards vest over time subject both to continued employment and to the achievement of corporate financial performance goals. Upon the vesting of a stock award, shares are issued from the pool of authorized shares. For performance-based stock awards, the number of shares issued related to the performance units granted can vary from 0% to 150% of the target number of underlying stock award units, depending on the extent of the achievement of predetermined financial goals. The total fair value of stock award units that vested during the first nine months of fiscal 2021 was $5.5 million. The number of shares issued related to the remaining stock awards are established at grant date.

NOTE 19 – SEGMENT AND GEOGRAPHIC INFORMATION

The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s physical retail outlet locations. The Chief Executive Officer of the Company is the chief operating decision maker (“CODM”) and regularly reviews operating results for each of the two operating segments to assess performance and makes operating decisions about the allocation of the Company’s resources.

The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Middle East, the Americas (excluding the United States) and Asia accounted for 41.9%, 6.6%, 6.5% and 6.4%, respectively, of the Company’s total net sales for the three months ended October 31, 2020. For the three months ended October 31, 2019, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 36.2%, 7.8%, 6.6% and 6.2%, respectively, of the Company’s total net sales. The Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 40.4%, 7.3%, 7.0% and 6.0%, respectively, of the Company’s total net sales for the nine months ended October 31, 2020. For the nine months ended October 31, 2019, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 34.3%, 8.6%, 8.1% and 6.7%, respectively, of the Company’s total net sales.

Operating Segment Data for the Three Months Ended October 31, 2020 and 2019 (in thousands):

	Net Sales
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	55,774	$	76,120
Licensed brands category		95,576		108,336
After-sales service and all other		758		1,149
Total Watch and Accessory Brands		152,108		185,605
Company Stores		17,755		20,013
Consolidated total	$	169,863	$	205,618

	Operating Income (3)
	2020		2019
Watch and Accessory Brands	$	19,810	$	20,206
Company Stores		3,257		2,432
Consolidated total	$	23,067	$	22,638

Operating Segment Data as of and for the Nine Months Ended October 31, 2020 and 2019 (in thousands):

	Net Sales
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	112,757	$	184,729
Licensed brands category		177,674		258,617
After-sales service and all other		3,152		10,560
Total Watch and Accessory Brands		293,583		453,906
Company Stores		34,484		56,077
Consolidated total	$	328,067	$	509,983

	Operating (Loss)/Income (3)(4)(5)
	2020			2019
Watch and Accessory Brands	$	(169,756	)	$	28,999
Company Stores		1,744			7,389
Consolidated total	$	(168,012	)	$	36,388

	Total Assets (A)
	October 31, 2020		January 31, 2020		October 31, 2019
Watch and Accessory Brands	$	640,652	$	782,339	$	799,887
Company Stores		61,126		64,969		67,168
Consolidated total	$	701,778	$	847,308	$	867,055

(A)	The decrease in total assets of the Watch and Accessory Brands segment at October 31, 2020 from January 31, 2020 is due primarily to the impairment charges related to goodwill of $133.7 million and $22.2 million related to intangible assets.

Geographic Location Data for the Three Months Ended October 31, 2020 and 2019 (in thousands):

	Net Sales				Operating (Loss)/Income (3)(5)
	2020		2019		2020			2019
United States (1)	$	65,485	$	85,634	$	(6,684	)	$	(7,077	)
International (2)		104,378		119,984		29,751			29,715
Consolidated total	$	169,863	$	205,618	$	23,067		$	22,638

United States and International net sales are net of intercompany sales of $100.5 million and $111.0 million for the three months ended October 31, 2020 and 2019, respectively.

Geographic Location Data as of and for the Nine Months Ended October 31, 2020 and 2019 (in thousands):

	Net Sales				Operating (Loss)/Income (3)(4)(5)
	2020		2019		2020			2019
United States (1)	$	128,785	$	211,657	$	(140,993	)	$	(19,280	)
International (2)		199,282		298,326		(27,019	)		55,668
Consolidated total	$	328,067	$	509,983	$	(168,012	)	$	36,388

United States and International net sales are net of intercompany sales of $172.4 million and $280.0 million for the nine months ended October 31, 2020 and 2019, respectively.

(1)

The United States operating loss included $16.3 million and $15.4 million of unallocated corporate expenses for the three months ended October 31, 2020 and 2019, respectively. The United States operating loss included $28.4 million and $28.5 million of unallocated corporate expenses for the nine months ended October 31, 2020 and 2019, respectively.

(2)

The International operating income included $23.0 million and $24.5 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2020 and 2019, respectively. The International operating (loss)/income included $45.3 million and $52.3 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2020 and 2019, respectively.

(3)

For the three months ended October 31, 2020 and 2019, and for the nine months ended October 31, 2020 and 2019, in the United States locations of the Watch and Accessory Brands segment, operating loss included a charge of $0.5 million, $0.9 million, $1.5 million and $3.5 million, respectively, related to the amortization of intangible assets, deferred compensation and certain acquisition accounting adjustments associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment for the three months ended October 31, 2020 and 2019, and for the nine months ended October 31, 2020 and 2019, operating income/(loss) included a charge of $0.6 million, $0.7 million, $2.0 million and $2.1 million, respectively, of expenses primarily related to the amortization of acquired intangible assets as a result of the Company’s acquisition of the Olivia Burton brand.

(4)

For the nine months ended October 31, 2020, in the United States locations of the Watch and Accessory Brands segment, operating loss included a charge of $99.7 million, related to the impairment of goodwill and intangible assets associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment, for the nine months ended October 31, 2020, operating loss included a charge of $56.2 million related to the impairment of goodwill associated with the Olivia Burton brand and City Time Joint Venture.

(5)

For the three months ended October 31, 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating (loss)/income included a charge of $0.6 million and $0.2 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic. For the nine months ended October 31, 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating loss included a charge of $11.9 million and $3.5 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic.

	Total Assets (1)
	October 31, 2020		January 31, 2020		October 31, 2019
United States	$	300,351	$	425,018	$	465,630
International		401,427		422,290		401,425
Consolidated total	$	701,778	$	847,308	$	867,055

(1)

The decrease in the United States total assets at October 31, 2020 from January 31, 2020 is primarily due to the impairment charges related to goodwill of $77.5 million and $22.2 million related to intangible assets. The decrease in the International total assets at October 31, 2020 from January 31, 2020 is primarily due to the impairment charge related to goodwill of $56.2 million.

	Property, Plant and Equipment, Net
	October 31, 2020		January 31, 2020		October 31, 2019
United States	$	15,884	$	18,852	$	19,613
International		8,118		10,386		9,662
Consolidated total	$	24,002	$	29,238	$	29,275

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q, including, without limitation, statements under Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report, as well as statements in future filings by the Company with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases and oral statements made by or with the approval of an authorized executive officer of the Company, which are not historical in nature, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, forecasts and projections about the Company, its future performance, the industry in which the Company operates and management’s assumptions. Words such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “will”, “should” and variations of such words and similar expressions are also intended to identify such forward-looking statements. The Company cautions readers that forward-looking statements include, without limitation, those relating to the Company’s future business prospects, projected operating or financial results, revenues, working capital, liquidity, capital needs, inventory levels, plans for future operations, expectations regarding capital expenditures, operating efficiency initiatives and other items, cost savings initiatives, and operating expenses, effective tax rates, margins, interest costs, and income as well as assumptions relating to the foregoing. Forward-looking statements are subject to certain risks and uncertainties, some of which cannot be predicted or quantified. Actual results and future events could differ materially from those indicated in the forward-looking statements, due to several important factors herein identified, among others, and other risks and factors identified from time to time in the Company’s reports filed with the SEC, including, without limitation, the following: 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, pandemics, including the effect of the COVID-19 pandemic and other diseases on travel and traffic in the Company’s retail stores and the stores of its wholesale customers; supply disruptions and delivery delays from the Company’s suppliers as a result of the COVID-19 pandemic; adverse impact on the Company’s wholesale customers and customer traffic in the Company’s stores as a result of increased uncertainty and economic disruption caused by the COVID-19 pandemic; the stability of the European Union (including the impact of the United Kingdom’s process to exit from the European Union); the stability of the United Kingdom after its 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; decrease in mall traffic and increase in e-commerce; 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 possible impairment of acquired intangible assets including goodwill if the carrying value of any reporting unit were to exceed its fair value; volatility in reported earnings resulting from changes in the estimated fair value of contingent acquisition consideration; 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; and general risks associated with doing business outside the United States including, without limitation, import duties, tariffs (including retaliatory tariffs), quotas, political and economic stability, changes to existing laws or regulations, and success of hedging strategies with respect to currency exchange rate fluctuations.

These risks and uncertainties, along with the risk factors discussed under Item 1A. “Risk Factors” in the Company’s 2020 Annual Report on Form 10-K, should be considered in evaluating any forward-looking statements contained in this report or incorporated by reference herein. All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are qualified by the cautionary statements in this section. The Company undertakes no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report.

Critical Accounting Policies and Estimates

The Company’s Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and those significant policies are more fully described in Note 1 to the Company’s Consolidated Financial Statements. The preparation of these financial statements and the application of certain critical accounting policies require management to make judgments based on estimates and assumptions that affect the information reported. On an on-going basis, management evaluates its estimates and judgments, including those related to sales discounts and markdowns, product returns, bad debt, inventories, income taxes, warranty obligations, useful lives of property, plant and equipment, impairments, stock-based compensation and contingencies and litigation. Management bases its estimates and judgments about the carrying values of assets and liabilities that are not readily apparent from other sources on historical experience, contractual commitments and on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Critical accounting policies are those that are most important to the portrayal of the Company’s financial condition and the results of operations and require management’s most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company’s most critical accounting policies have been discussed in the Company’s 2020 Annual Report on Form 10-K and are incorporated by reference herein.

In the first quarter of 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13. As a result of adoption, the Company replaced its methodology in determining the allowance for doubtful accounts which was based on an analysis of the aging of accounts receivable, assessments of collectability based on historical trends, the financial condition of the Company’s customers and an evaluation of economic conditions with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss rate for its trade accounts receivables. The adoption had no material impact on the Company’s Consolidated Financial Statements.

The Company performs its annual impairment assessment of goodwill and long-lived intangible assets at the beginning of the fourth quarter of each fiscal year. The Company determined that there was no impairment in fiscal 2020. During the three months ended April 30, 2020, in light of the COVID-19 induced closing of the Company’s stores and the stores of the vast majority of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), decrease in customer spending and the recent decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred during the first quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets, as well as the Watch and Accessory Brands reporting unit. The assessment concluded that the fair values of MVMT’s tradename and customer relationships and Watch and Accessory Brands reporting unit did not exceed their respective carrying values. This analysis resulted in impairment charges related to goodwill of $133.7 million and intangible assets of $22.2 million in the first quarter of fiscal 2021 and are included in operating loss in the Consolidated Statements of Operations for the nine months ended October 31, 2020.

As of October 31, 2020, there have been no material changes to any of the Company’s critical accounting policies other than the changes mentioned above.

Overview

The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s physical retail outlet locations in the United States and Canada. The Company also operates in two major geographic locations: United States and International, the latter of which includes the results of all non-U.S. Company operations.

The Company divides its watch and accessory business into two principal categories: the owned brands category and the licensed brands category. The owned brands category consists of the Movado®, Concord®, Ebel®, Olivia Burton® and MVMT® brands. Products in the licensed brands category include the following brands manufactured and distributed under license agreements with the respective brand owners: Coach®, Tommy Hilfiger®, HUGO BOSS®, Lacoste®, SCUDERIA FERRARI® and Rebecca Minkoff® and Uri Minkoff®.

Gross margins vary among the brands included in the Company’s portfolio and also among watch models within each brand. Watches in the Company’s owned brands category generally earn higher gross margin percentages than watches in the licensed brands category. The difference in gross margin percentages within the licensed brands category is primarily due to the impact of royalty payments made on the licensed brands. Gross margins in the Company’s e-commerce business generally earn higher gross margin percentages than those of the traditional wholesale business. Gross margins in the Company’s outlet business are affected by the mix of product sold and may exceed those of the wholesale business since the Company earns margins on its outlet store sales from manufacture to point of sale to the consumer.

Recent Developments and Initiatives

COVID-19

At the end of the first quarter of fiscal year 2021, the impact of the COVID-19 pandemic resulted in the closure of the Company’s retail stores and the majority of the stores of the Company’s wholesale customers. During the second quarter of fiscal 2021, many worldwide regional and local governments lifted or modified restrictions and orders. By the end of the second quarter and throughout the third quarter, all of the Company’s retail stores and a majority of the stores of the Company’s wholesale customers have reopened; however, these stores have been impacted by a decrease in retail traffic and reduced hours at many locations. As we progressed through the second quarter and moved into the third quarter, sales trends improved as COVID-19 restrictions began easing in various stages across the world, enabling some return of foot traffic in the Company’s retail stores and those of its wholesale customers. However, due to continued restrictions affecting brick-and-mortar retail traffic and sales, sales declined in the Company’s retail stores and its wholesale business relative to the prior year period, but were partially offset by strong growth in e-commerce sales, both on the Company’s owned websites and those of third-parties.

The Company expects declines in net sales to continue in its retail and wholesale channels as potential customers react to social distancing requirements and other safety measures, as well as face layoffs and other negative economic impacts from the COVID-19 outbreak that negatively affect their disposable income and discretionary purchases. These trends could worsen if COVID-19 infections continue to increase as people spend more time congregating indoors due to the colder fall and winter weather in the northern hemisphere, which is where the Company’s biggest markets are located. The ongoing impact of the outbreak of COVID-19 on the Company’s liquidity, revenues, impairment considerations surrounding the Company’s indefinite and long-lived assets and results of operations cannot be reasonably predicted at this time due to the high level of uncertainty regarding future developments, the duration of containment measures and the timeline for recovery.

In response to this challenging environment, while the Company’s focus remains on the health and safety of its associates, customers and business partners, the Company has taken and continues to take the following actions:

Revenue-Generating Activities

•

Optimizing of the Company’s e-commerce platforms and ensuring that distribution centers remain operational across all major regions; and

•

Supporting the Company’s wholesale customers as local containment measures ease throughout the world.

Eliminating Non-Essential Operating Costs Across All Key Areas of Spend

•

Driving SG&A savings by minimizing all non-essential operating costs, right-sizing marketing expenses to the lower revenue base while maintaining a focus on digital, and driving procurement savings, including by reducing third party services.

Strengthening the Company’s Balance Sheet and Enhancing Financial Flexibility

•

Adapting our inventory management to take account of market conditions and expected demand; and

•

Reducing capital expenditures while prioritizing investment in high-return projects particularly in digital.

Preserving Liquidity

•

Suspending the Company’s quarterly cash dividend beginning in the first quarter of fiscal 2021; and

•

Suspending the share repurchase program.

Addressing Organizational Costs

•

Implementation in June 2020 of a Restructuring Plan aimed at reducing operating expenses while maintaining a high level of variable expenses enabling the Company to be more responsive to further shifts in trends and the retail environment, and streamlining the organization, including a permanent workforce reduction;

•

Applying for available government payroll subsidy programs in various countries to mitigate payroll expense; and

•

Freezing the Company’s match on executive deferred compensation plans and the Company’s 401(k) match.

The Company will continue to consider near-term demands and the long-term financial health of the business as steps are taken to mitigate the consequences of the COVID-19 pandemic and the uncertain business environment.

Fiscal 2021 Impairments

During the three months ended April 30, 2020, in light of the COVID-19 pandemic that resulted in the closing of the Company’s stores and of the vast majority of the stores of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), a decrease in customer spending and the recent decline in global equity markets, the Company concluded that a triggering event had occurred during the first quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets as well as the Watch and Accessory Brands reporting unit.

The Company made revisions to its internal forecasts, resulting in a reduction in both current and future expected cash flows, due to the COVID-19 pandemic and the uncertain business environment. As a result, during the first quarter of fiscal 2021, the Company recorded impairment charges related to goodwill of $133.7 million and intangible assets related to MVMT’s tradename and customer relationships of $22.2 million.

During the first quarter of fiscal 2021, the Company recorded $3.5 million of increases in inventory reserves and $1.1 million increases in allowance for doubtful accounts, similarly driven by current and expected changes to operations as result of the COVID-19 pandemic.

Tariffs

Starting in July 2018, the Trump Administration announced a series of lists covering thousands of categories of Chinese origin products subject to potential U.S. special tariffs of 10% to 25% of import value, in addition to the regular tariffs that have historically applied to such products. Certain of the Company’s packaging products became subject to a U.S. special 10% tariff in September 2018, which was increased to 25% effective May 10, 2019. In addition, all of the Company’s smart watches became subject to a U.S. special 15% tariff on September 1, 2019, and in a third-party ruling, U.S. Customs and Border Patrol (“CBP”) has taken the position that this U.S. special 15% tariff applies broadly to China-sourced cases and bands on watches assembled in China and other countries. Under this position, most of the cases and bands used in the production of the Company’s traditional watches imported into the U.S. became subject to the U.S. special 15% tariff effective September 1, 2019, although the tariff rate was decreased to 7.5% effective February 14, 2020 in connection with the “Phase One” trade agreement between the United States and China signed on January 15, 2020. A pending request to CBP for reconsideration and revocation of the ruling has been filed on behalf of the Company and certain other watch importers on the basis that the CBP ruling is inconsistent with CBP’s longstanding position that the country of origin of the movement confers the country of origin of a traditional watch.

Results of Operations Overview

During the three and nine months ended October 31, 2020, the Company and many of its wholesale customers have been impacted by closures, reduced store hours or reduced traffic. The Company has seen and expects to continue to see material reductions in sales as a result of the COVID-19 pandemic and the uncertain business environment. In addition, these reductions in sales have not been entirely offset by proportional decreases in expenses, as the Company continues to incur costs such as operating lease costs, depreciation expense, and certain other costs such as compensation and administrative expenses, adversely affecting the relationship between the Company’s expenses and sales. The Company continues to take steps as discussed above in response to this challenging environment to mitigate the adverse impact of the pandemic. The current circumstances are dynamic and the impacts of the COVID-19 pandemic on the Company’s business operations, including the duration and impact on overall consumer demand, cannot be reasonably predicted at this time. These impacts could worsen if COVID-19 infections continue to increase as people spend more time congregating indoors due to the colder fall and winter weather in the northern hemisphere, which is where the Company’s biggest markets are located. The Company anticipates the COVID-19 pandemic will have a material impact on its business, results of operations, financial condition and cash flows for the year ending January 31, 2021. As the COVID-19 pandemic is complex and rapidly evolving, the Company’s plans may change.

Results of operations for the three months ended October 31, 2020 as compared to the three months ended October 31, 2019

Net Sales: Comparative net sales by business segment were as follows (in thousands):

	Three Months Ended October 31,
	2020		2019
Watch and Accessory Brands:
United States	$	48,403	$	66,287
International		103,705		119,318
Total Watch and Accessory Brands		152,108		185,605
Company Stores:
United States		17,082		19,347
International		673		666
Total Company Stores		17,755		20,013
Net Sales	$	169,863	$	205,618

Comparative net sales by categories were as follows (in thousands):

	Three Months Ended October 31,
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	55,774	$	76,120
Licensed brands category		95,576		108,336
After-sales service and all other		758		1,149
Total Watch and Accessory Brands		152,108		185,605
Company Stores		17,755		20,013
Net Sales	$	169,863	$	205,618

Net Sales

Net sales for the three months ended October 31, 2020 were $169.9 million, $35.8 million or 17.4% below the prior year period. This decrease is primarily as a result of the ongoing COVID-19 pandemic. For the three months ended October 31, 2020, fluctuations in foreign currency exchange rates positively impacted net sales by $4.2 million when compared to the prior year period.

Watch and Accessory Brands Net Sales

Net sales for the three months ended October 31, 2020 in the Watch and Accessory Brands segment were $152.1 million, below the prior year period by $33.5 million, or 18.0%. The decrease in net sales was primarily attributable to the ongoing COVID-19 pandemic and continued restrictions on some stores of the Company’s wholesale customers during the period. There were decreases in net sales in both the United States and International locations of the Watch and Accessory Brands segment.

United States Watch and Accessory Brands Net Sales

Net sales for the three months ended October 31, 2020 in the United States locations of the Watch and Accessory Brands segment were $48.4 million, below the prior year period by $17.9 million, or 27.0%, resulting from net sales decreases across most brands in both the owned and licensed brand categories due to the ongoing COVID-19 pandemic. The net sales recorded in the owned brands category decreased by $12.4 million, or 24.9%, and net sales recorded in the licensed brand category decreased $4.7 million, or 29.7%.

International Watch and Accessory Brands Net Sales

Net sales for the three months ended October 31, 2020 in the International locations of the Watch and Accessory Brands segment were $103.7 million, below the prior year by $15.6 million, or 13.1%, which included fluctuations in foreign currency exchange rates which favorably impacted net sales by $4.2 million when compared to the prior year period. The decrease in net sales was across most brands in both the owned and licensed brand categories due to the ongoing COVID-19 pandemic. The net sales decrease recorded in the owned brands category was $8.0 million, or 30.2% and is due to sales decreases primarily in Europe, the Americas (excluding the United States), Asia, and the Middle East. The net sales decrease in the licensed brands category was $8.1 million, or 8.7%, primarily due to net sales decreases in the Americas (excluding the United States), Asia and the Middle East.

Company Stores Net Sales

Net sales for the three months ended October 31, 2020 in the Company Stores segment were $17.8 million, $2.3 million or 11.3% below the prior year period. The net sales decrease in comparable stores is primarily the result of continued restrictions on some of the Company’s retail stores during the period in response to the COVID-19 pandemic and the ongoing COVID-19 pandemic. As of October 31, 2020, all of the Company stores are open. This decrease was partially offset by the addition of a new store that did not exist in the prior-year period but contributed to sales in the current period. As of October 31, 2020, and 2019, the Company operated 47 and 46 retail outlet locations, respectively.

Gross Profit

Gross profit for the three months ended October 31, 2020 was $92.5 million or 54.4% of net sales as compared to $110.1 million or 53.5% of net sales in the prior year period. The decrease in gross profit of $17.6 million was primarily due to lower net sales, partially offset by a higher gross margin percentage. The increase in the gross margin percentage of approximately 90 basis points for the three months ended October 31, 2020 resulted primarily from cost savings of approximately 50 basis points, a positive impact of fluctuations in foreign exchange rates of approximately 50 basis points and a favorable impact of sales mix of approximately 30 basis points, partially offset by the decreased leveraging of certain fixed costs as a result of lower sales of approximately 40 basis points.

Selling, General and Administrative (“SG&A”)

SG&A expenses for the three months ended October 31, 2020 were $69.4 million, representing a decrease from the prior year period of $18.0 million, or 20.6%, primarily from lower marketing expenses of $10.3 million; a decrease in payroll related expenses of $7.7 million primarily as a result of permanent staff reductions that took place in July in response to the COVID-19 pandemic; a $1.1 million decrease in consulting and recruiting charges; a decrease of $0.9 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; and a decrease of $0.6 million in amortization expense as a result of a reduction in intangible assets due to the impairment taken during the first quarter of fiscal 2021. The decrease in SG&A was partially offset by an increase in performance-based compensation of $3.5 million and corporate initiative charges primarily in response to the COVID-19 pandemic of $0.7 million consisting of $0.6 million in other restructuring charges and $0.1 million in severance and payroll related. For the three months ended October 31, 2020, fluctuations in foreign currency rates related to the foreign subsidiaries negatively impacted SG&A expenses by $1.0 million when compared to the prior year period.

Watch and Accessory Brands Operating Income

For the three months ended October 31, 2020 and 2019, the Company recorded Watch and Accessory Brands segment operating income of $19.8 million and $20.2 million, respectively, which includes $16.3 million and $15.4 million of unallocated corporate expenses as well as $23.0 million and $24.5 million, respectively, of certain intercompany profits related to the Company’s supply chain operations. The $0.4 million decrease in operating income was the result of a decrease in gross profit of $17.4 million, partially offset by a decrease in SG&A expenses of $17.0 million when compared to the prior year period. The decrease in gross profit was the result of lower sales, partially offset by a higher gross margin percentage. The decrease in SG&A expenses of $17.0 million resulted primarily from lower marketing expenses of $10.3 million; a decrease in payroll related expenses of $7.0 million primarily as a result of permanent staff reductions that took place in July in response to the COVID-19 pandemic; a $1.1 million decrease in consulting and recruiting charges; a decrease of $0.9 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; and a decrease of $0.6 million in amortization expense as a result of a reduction in intangible assets due to the impairment taken during the first quarter of fiscal 2021. The decrease in SG&A was partially offset by an increase in performance-based compensation of $3.4 million and corporate initiative charges primarily in response to the COVID-19 pandemic of $0.7 million consisting of $0.6 million in other restructuring charges and $0.1 million in severance and payroll related. For the three months ended October 31, 2020, fluctuations in foreign currency exchange rates positively impacted the Watch and Accessory Brands segment operating income by $0.7 million when compared to the prior year period.

U.S. Watch and Accessory Brands Operating Loss

In the United States locations of the Watch and Accessory Brands segment, for the three months ended October 31, 2020 and 2019, the Company recorded an operating loss of $9.8 million and $9.3 million, respectively, which includes unallocated corporate expenses of $16.3 million and $15.4 million, respectively. The increase in operating loss was the result of lower gross profit of $8.9 million, partially offset by lower SG&A expenses of $8.4 million. The decrease in gross profit of $8.9 million was due to lower sales, partially offset by a higher gross margin percentage. The decrease in SG&A expenses of $8.4 million resulted primarily from lower marketing costs of $5.7 million; a decrease in payroll related expenses of $4.0 million primarily as a result of permanent staff reductions that took place in July in response to the COVID-19 pandemic; a decrease of $0.8 million in consulting and recruiting charges; a decrease of $0.6 million in amortization expense as a result of a reduction in intangible assets due to the impairment taken during the first quarter of fiscal 2021; and a decrease of $0.4 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic. The decrease in SG&A was partially offset by an increase in performance-based compensation of $3.0 million and corporate initiative charges primarily in response to the COVID-19 pandemic consisting of $0.6 million in other restructuring charges.

International Watch and Accessory Brands Operating Income

In the International locations of the Watch and Accessory Brands segment, for the three months ended October 31, 2020 and 2019, the Company recorded operating income of $29.6 million and $29.5 million, respectively, which includes $23.0 million and $24.5 million, respectively, of certain intercompany profits related to the Company’s International supply chain operations. The increase in operating income was primarily related to lower SG&A expenses of $8.6 million, partially offset by lower gross profit of $8.5 million. The decrease in gross profit of $8.5 million was due to lower net sales, partially offset by a higher gross margin percentage. The decrease in SG&A expenses of $8.6 million resulted primarily from lower marketing costs of $4.6 million; a decrease in payroll related expense of $3.0 million primarily as a result of permanent staff reductions that took place in July in response to the COVID-19 pandemic; a decrease of $0.5 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; and a decrease in $0.3 million in consulting and recruiting charges. The decrease in SG&A was partially offset by an increase in performance-based compensation of $0.4 million and corporate initiative charges primarily in response to the COVID-19 pandemic consisting of $0.1 million in severance and payroll related. Fluctuation in foreign currency exchange rates positively impacted operating income by $0.7 million when compared to the prior year period.

Company Stores Operating Income

The Company recorded operating income of $3.2 million and $2.4 million in the Company Stores segment for the three months ended October 31, 2020 and 2019, respectively. The increase in operating income of $0.8 million was primarily related to lower SG&A expenses of $1.0 million, partially offset by lower gross profit of $0.2 million primarily due to lower sales. The decrease in SG&A expenses was primarily due to a decrease in payroll related expenses of $0.7 million primarily due to permanent staff reductions that took place in July in response to the COVID-19 pandemic and a decrease in credit card fees and sales commissions of $0.2 million due to less sales in the current year period as compared to the prior year period. As of October 31, 2020, and 2019, the Company operated 47 and 46 retail outlet locations, respectively.

Income Taxes

The Company recorded an income tax provision of $7.5 million and $5.0 million for the three months ended October 31, 2020 and 2019, respectively.

The effective tax rate was 33.5% and 22.1% for three months ended October 31, 2020 and 2019, respectively. The significant components of the effective tax rate changed primarily due to the U.S. tax on GILTI and excess tax deficiencies related to stock-based compensation, partially offset by the CARES Act NOL Carryback Provision.

The effective tax rate for the three months ended October 31, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to no tax benefit being recognized on losses incurred by certain foreign operations, partially offset by foreign profits being taxed in lower taxing jurisdictions.

Net Income Attributable to Movado Group, Inc.

The Company recorded net income attributable to Movado Group, Inc. of $14.8 million and $17.8 million, for the three months ended October 31, 2020 and 2019, respectively.

Results of operations for the nine months ended October 31, 2020 as compared to the nine months ended October 31, 2019

Net Sales: Comparative net sales by business segment were as follows (in thousands):

	Nine Months Ended October 31,
	2020		2019
Watch and Accessory Brands:
United States	$	95,605	$	156,856
International		197,978		297,050
Total Watch and Accessory Brands		293,583		453,906
Company Stores:
United States		33,180		54,801
International		1,304		1,276
Total Company Stores		34,484		56,077
Net Sales	$	328,067	$	509,983

Comparative net sales by categories were as follows (in thousands):

	Nine Months Ended October 31,
	2020		2019
Watch and Accessory Brands:
Owned brands category	$	112,757	$	184,729
Licensed brands category		177,674		258,617
After-sales service and all other		3,152		10,560
Total Watch and Accessory Brands		293,583		453,906
Company Stores		34,484		56,077
Net Sales	$	328,067	$	509,983

Net Sales

Net sales for the nine months ended October 31, 2020 were $328.1 million, $181.9 million or 35.7% below the prior year period. This decrease is primarily as a result of the ongoing COVID-19 pandemic. For the nine months ended October 31, 2020, fluctuations in foreign currency exchange rates positively impacted net sales by $3.6 million when compared to the prior year period.

Watch and Accessory Brands Net Sales

Net sales for the nine months ended October 31, 2020 in the Watch and Accessory Brands segment were $293.6 million, below the prior year period by $160.3 million, or 35.3%. The decrease in net sales was primarily attributable to the ongoing COVID-19 pandemic and the resultant closure of the stores of the Company’s wholesale customers during a portion of the period and continued restrictions on some stores of the Company’s wholesale customers during the period. There were decreases in net sales in both the United States and International locations of the Watch and Accessory Brands segment.

United States Watch and Accessory Brands Net Sales

Net sales for the nine months ended October 31, 2020 in the United States locations of the Watch and Accessory Brands segment were $95.6 million, below the prior year period by $61.2 million, or 39.0%, resulting from net sales decreases across most brands in both the owned and licensed brand categories due to the ongoing COVID-19 pandemic. The net sales recorded in the owned brands category decreased by $42.3 million, or 36.4%, and net sales recorded in the licensed brand category decreased $13.3 million, or 38.9%.

International Watch and Accessory Brands Net Sales

Net sales for the nine months ended October 31, 2020 in the International locations of the Watch and Accessory Brands segment were $198.0 million, below the prior year by $99.1 million, or 33.4%, which included fluctuations in foreign currency exchange rates which favorably impacted net sales by $3.6 million when compared to the prior year period. The decrease in net sales was across all brands in both the owned and licensed brand categories due to the ongoing COVID-19 pandemic. The net sales decrease recorded in the owned brands category was $29.7 million, or 43.2% and is due to sales decreases primarily in Europe, the Americas (excluding the United States), Asia, and the Middle East. The net sales decrease in the licensed brands category was $67.7 million, or 30.1%, primarily due to net sales decreases in Europe, the Americas (excluding the United States), Asia and the Middle East.

Company Stores Net Sales

Net sales for the nine months ended October 31, 2020 in the Company Stores segment were $34.5 million, $21.6 million or 38.5% below the prior year period. The net sales decrease in comparable stores is primarily the result of the closure of the Company’s retail stores during a portion of the period in response to the COVID-19 pandemic and continued restrictions on some of the Company’s retail stores during the period in response to the COVID-19 pandemic. This decrease was partially offset by the addition of new stores that did not exist in the prior-year period but contributed to sales in the current period prior to and after the COVID-19 related closures that began in mid-March. As of October 31, 2020, all of the Company stores are open. As of October 31, 2020, and 2019, the Company operated 47 and 46 retail outlet locations, respectively.

Gross Profit

Gross profit for the nine months ended October 31, 2020 was $169.7 million or 51.7% of net sales as compared to $274.3 million or 53.8% of net sales in the prior year period. The decrease in gross profit of $104.6 million was primarily due to lower net sales and, to a lesser extent, a lower gross margin percentage. The decrease in the gross margin percentage of approximately 210 basis points for the nine months ended October 31, 2020 resulted primarily from the decreased leveraging of certain fixed costs as a result of lower sales of approximately 120 basis points, corporate initiatives related to an increase in inventory reserves in response to the COVID-19 pandemic of approximately 110 basis points, an unfavorable impact of sales mix of approximately 100 basis points and additional U.S. special tariffs of approximately 20 basis points, partially offset by cost savings of 130 basis points and a positive impact of fluctuations in foreign currency exchange rates of approximately 10 basis points.

Selling, General and Administrative (“SG&A”)

SG&A expenses for the nine months ended October 31, 2020 were $181.8 million, representing a decrease from the prior year period of $56.1 million, or 23.6%, primarily from lower marketing expenses of $30.4 million; a decrease in payroll related expenses of $25.8 million primarily as a result of the furloughing of employees and temporary salary reductions starting at the beginning of April (with the majority of these actions ending in July) and permanent staff reductions in response to the COVID-19 pandemic; a $3.3 million decrease in consulting and recruiting charges; a decrease of $3.0 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; a decrease of $2.7 million in trade show costs due to the cancellation of a global customer event due to COVID-19 health concerns and travel restrictions; a decrease in amortization expense of $1.5 million as a result of a reduction in intangible assets due to the impairment taken during the current period; a decrease of $0.9 million in sales commissions; and a reduction in credit card fees of $0.7 million due to less sales in the current year period as compared to the prior year period. The decrease in SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $11.8 million consisting of $8.0 million in severance and payroll related, $1.5 million in write-off of unrefunded trade show deposits, $1.2 million in other restructuring charges and $1.1 million in additional accounts receivable reserves; and an increase in performance-based compensation of $3.0 million. For the nine months ended October 31, 2020, fluctuations in foreign currency rates related to the foreign subsidiaries negatively impacted SG&A expenses by $1.0 million when compared to the prior year period.

Impairment of Goodwill and Intangible Assets

As a result of the economic conditions caused by the response to COVID-19, the Company performed a quantitative assessment of its goodwill and long-lived intangible assets at April 30, 2020. The Company recorded a goodwill impairment of $133.7 million related to the Company’s Watch and Accessory Brands reporting unit as the carrying value of goodwill exceeded the fair value at April 30, 2020. The Company also recorded a $22.2 million impairment charge related to MVMT’s trade name and customer relationships as the carrying amount of these long-lived intangible assets exceeded the fair value.

Watch and Accessory Brands Operating (Loss)/Income

For the nine months ended October 31, 2020 the Company recorded an operating loss of $169.8 million in the Watch and Accessory Brands segment which included goodwill and intangible assets impairment charges of $133.7 million and $22.2 million, respectively. Without these charges, for the nine months ended October 31, 2020, operating loss would have been $13.9 million as compared to operating income of $29.0 million for the nine months ended October 31, 2019, which includes $28.4 million and $28.5 million, respectively, of unallocated corporate expenses as well as $45.3 million and $52.3 million, respectively, of certain intercompany profits related to the Company’s supply chain operations. In addition to the assets impairments, the decrease in operating income was the result of a decrease in gross profit of $93.3 million, which included corporate initiative costs of $3.5 million comprising an increase in inventory reserves, partially offset by a decrease in SG&A expenses of $50.4 million when compared to the prior year period. The decrease in gross profit was the result of lower sales, and to a lesser extent, lower gross margin percentage. The decrease in SG&A expenses of $50.4 million resulted primarily from lower marketing expenses of $30.3 million; a decrease in payroll related expenses of $22.0 million primarily as a result of the furloughing of employees and temporary salary reductions starting at the beginning of April (with the majority of these actions ending in July) and permanent staff reductions in response to the COVID-19 pandemic; a $3.3 million decrease in consulting and recruiting charges a decrease of $2.8 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; a decrease of $2.7 million in trade show costs due to the cancellation of a global customer trade show due to COVID-19 health concerns and travel restrictions; a decrease in amortization expense of $1.5 million as a result of a reduction in intangible assets due to the impairment taken during the current period; and a decrease of $0.5 million in sales commissions. The decrease in SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $11.8 million consisting of $8.0 million in severance and payroll related, $1.5 million in write-off of unrefunded trade show deposits, $1.2 million in other restructuring charges and $1.1 million in additional accounts receivable reserves; and an increase in performance-based compensation of $3.3 million. For the nine months ended October 31, 2020, fluctuations in foreign currency exchange rates positively impacted the Watch and Accessory Brands segment operating loss by $0.4 million when compared to the prior year period.

U.S. Watch and Accessory Brands Operating Loss

For the nine months ended October 31, 2020 the Company recorded an operating loss of $142.6 million in the United States locations of the Watch and Accessory Brands segment which included goodwill and impairment charges of $77.5 million and $22.2 million, respectively. Without these charges, for the nine months ended October 31, 2020, operating loss would have been $42.9 million as compared to operating loss of $26.4 million for the nine months ended October 31, 2019, which includes unallocated corporate expenses of $28.4 million and $28.5 million, respectively. In addition to the assets impairments, the increase in operating loss was the result of lower gross profit of $38.9 million, which reflected corporate initiative costs of $3.5 million comprising an increase in inventory reserves, partially offset by lower SG&A expenses of $22.4 million. The decrease in gross profit of $38.9 million was due to lower sales and, to a lesser extent, a lower gross margin percentage. The decrease in SG&A expenses of $22.4 million resulted primarily from a decrease in payroll related expenses of $14.1 million primarily as a result of the furloughing of employees and temporary salary reductions starting at the beginning of April (with the majority of these actions ending in July) and permanent staff reductions in response to the COVID-19 pandemic; lower marketing costs of $13.6 million; a decrease of $1.8 million in consulting and recruiting charges; a decrease of $1.5 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; a decrease in amortization expense of $1.5 million as a result of a reduction in intangible assets due to the impairment taken during the current period; and a decrease of $0.2 million in sales commissions. The decrease in SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $8.4 million consisting of $6.3 million in severance and payroll related, $1.1 million in additional accounts receivable reserves and $1.0 million in other restructuring charges; and an increase in performance-based compensation of $2.8 million.

International Watch and Accessory Brands Operating (Loss)/Income

For the nine months ended October 31, 2020 the Company recorded an operating loss of $27.2 million in the International locations of the Watch and Accessory Brands segment which included goodwill impairment charges of $56.2 million. Without these charges, for the nine months ended October 31, 2020, the Company would have generated operating income of $29.0 million as compared to operating income of $55.4 million for the nine months ended October 31, 2019, which amounts include $45.3 million and $52.3 million, respectively, of certain intercompany profits related to the Company’s International supply chain operations. In addition to the goodwill impairment charges, the decrease in operating income was primarily related to lower gross profit of $54.4 million, partially offset by lower SG&A expenses of $28.0 million. The decrease in gross profit of $54.4 million was primarily related to lower net sales and, to a lesser extent, a lower gross margin percentage. The decrease in SG&A expenses of $28.0 million resulted primarily from

lower marketing costs of $16.7 million; a decrease in payroll related expense of $7.9 million primarily as a result of the furloughing of employees and temporary salary reductions starting at the beginning of April (with the majority of these actions ending in July) and permanent staff reductions in response to the COVID-19 pandemic; a decrease of $2.7 million in trade show costs due to cancellation of a global customer event due to COVID-19 health concerns and travel restrictions; a decrease of $1.5 million in consulting and recruiting charges; a decrease of $1.3 million in travel and entertainment charges due to travel restrictions related to the COVID-19 pandemic; and a decrease of $0.3 million in sales commissions. The decrease in SG&A was partially offset by an increase in corporate initiative charges primarily in response to the COVID-19 pandemic of $3.4 million consisting of $1.7 million in severance and payroll related, $1.5 million in write-off of unrefunded trade show deposits and $0.2 million in other restructuring charges; and an increase in performance-based compensation of $0.5 million. Fluctuations in foreign currency exchange rates positively impacted operating loss by $0.4 million when compared to the prior year period.

Company Stores Operating Income

The Company recorded operating income of $1.7 million and $7.4 million in the Company Stores segment for the nine months ended October 31, 2020 and 2019, respectively. The decrease in operating income of $5.7 million was primarily related to lower gross profit of $11.3 million mainly due to lower sales, partially offset by lower SG&A expenses of $5.6 million. The decrease in SG&A expenses was primarily due to a decrease in payroll related expenses of $3.8 million primarily due to the closing of the Company’s stores and the furloughing of employees during portions of the period due to the COVID-19 pandemic; a decrease of $0.5 million in credit card fees due to less sales in the current year period as compared to the prior year period; a decrease of $0.4 million in sales commissions; and a decrease in travel and entertainment charges of $0.2 million due to travel restrictions related to the COVID-19 pandemic. As of October 31, 2020, and 2019, the Company operated 47 and 46 retail outlet locations, respectively.

Other Non-Operating Income

The Company recorded a gain on sale of a non-operating asset of $1.3 million related to a sale of a building in an international location for the nine months ended October 31, 2020.

Based on updated revenue and EBITDA (as defined in the MVMT acquisition agreement) performance expectations during the earn-out period for MVMT, the Company recorded a non-cash gain on remeasurement of the contingent consideration of $13.6 million for the nine months ended October 31, 2019.

Income Taxes

The Company recorded an income tax benefit of $26.4 million and an income tax provision of $10.5 million for the nine months ended October 31, 2020 and 2019, respectively.

The effective tax rate for the nine months ended October 31, 2020 differs from the U.S. statutory tax rate of 21.0% primarily due to impairments of the portion of goodwill of the Watch and Accessory Brands reporting unit which is not tax deductible and the U.S. tax on GILTI, partially offset by the CARES Act NOL Carryback Provision.

The effective tax rate for the nine months ended October 31, 2019 differs from the U.S. statutory tax rate of 21.0% primarily due to no tax benefit being recognized on losses incurred by certain foreign operations, partially offset by foreign profits being taxed in lower taxing jurisdictions.

Net (Loss)/ Income Attributable to Movado Group, Inc.

The Company recorded net loss attributable to Movado Group, Inc. of $141.8 million and net income attributable to Movado Group, Inc. of $39.2 million, for the nine months ended October 31, 2020 and 2019, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company believes that cash flows from operations, including the impact of the Company corporate initiatives, combined with existing cash on hand and amounts available under its credit lines provide adequate funds to support its operating, capital and debt service requirements for the next twelve months subsequent to the issuance of these financial statements. During the first nine months of fiscal 2021, the Company’s cash generated from operations was negatively impacted due to widespread closures of the Company’s retail locations and the Company’s wholesale customers’ stores as a result of the COVID-19 pandemic. The Company entered this period of uncertainty with a healthy liquidity position, and it took actions to enhance the Company’s financial liquidity and flexibility, including minimizing all non-essential operating expenses (including marketing, travel and consulting services), reevaluating all capital expenditures, furloughing approximately 80% of the Company’s North American workforce during March through June and temporarily reducing the work-rate of international employees while applying for available government payroll subsidies in accordance with local government guidelines and programs, suspending the Company’s share repurchase program and regular quarterly dividend, reducing salaries and suspending Board of Director fees from April through June 2020, amending license agreements to reduce its royalty obligations in fiscal 2021, and negotiating rent deferrals or other arrangements in respect of its rent obligations for all of its Company Stores and certain other leases. As a precautionary measure, the Company borrowed an additional $30.9 million under its revolving credit facility in March 2020 and amended its revolving credit facility to modify some of its financial covenants. During the second and third quarter of fiscal 2021, the Company repaid $36.8 million and $10.9 million, respectively, under its revolving credit facility. Although the Company believes it has adequate sources of liquidity over the long term, continued uncertainty surrounding the COVID-19 pandemic, an economic recession or a slow recovery could adversely affect the Company’s business and liquidity.

At October 31, 2020 the Company had working capital of $338.2 million as compared to $346.8 million at October 31, 2019. The decrease in working capital was primarily the result of a decrease in accounts receivable resulting primarily from lower sales due to the COVID-19 pandemic and lower inventory levels as the Company continues to monitor its inventory levels to align with expected sales. These factors were partially offset by additional cash of $47.2 million. The Company defines working capital as the difference between current assets and current liabilities.

The Company had $6.7 million of cash used in operating activities for the nine months ended October 31, 2020 as compared to $44.6 million of cash used in operating activities for the nine months ended October 31, 2019. Cash used by operating activities for the nine months ended October 31, 2020 included net loss attributable to the Movado Group, Inc. of $141.8 million, positively adjusted by $146.7 million related to non-cash items. Cash used in operating activities included an increase in accounts receivable of $26.8 million primarily as a result of timing of customer payments and an increase in investment in inventories of $7.1 million in advance of the holiday season. Cash provided by operating activities for the nine months ended October 31, 2020 included an increase in accrued liabilities of $15.9 million as a result of timing of payments and an increase in accrued payroll of $6.1 million primarily due to an increase in performance-based compensation and an increase in severance accrual as a result of the Company’s corporate initiatives.

Cash used in investing was $1.2 million for the nine months ended October 31, 2020 as compared to $10.0 million for the nine months ended October 31, 2019. The cash used in the nine months ended October 31, 2020 was primarily related to capital expenditures of $2.4 million primarily due to website platform upgrades and the construction of shop-in-shops at some of the Company’s wholesale customers, partially offset by proceeds from a sale of a non-operating asset in Switzerland of $1.3 million.

Cash used by financing activities was $17.6 million for the nine months ended October 31, 2020 as compared to $19.2 million for the nine months ended October 31, 2019. The cash used in the nine months ended October 31, 2020 included repayment of bank borrowings of $16.8 million and $0.3 million in debt issuance cost resulting from the Company amending its revolving credit facility. In response to the COVID-19 pandemic, the Company has suspended its quarterly dividends and share repurchases effective the first quarter of fiscal 2021. The Company paid $13.8 million in dividends and $4.2 million in share repurchases during the first nine months of fiscal 2020.

On June 5, 2020, the Company and its lenders entered into an amendment (the “Second Amendment”) to the Credit Agreement effective as of July 31, 2020. Among other things, the Second Amendment provides for the following temporary relief with respect to the financial maintenance covenants in the Credit Agreement from April 30, 2020 through the date on which the Company delivers a compliance certificate in respect of the period ended July 31, 2021 (or earlier if the Company demonstrates satisfaction of certain earnings and leverage milestones) (the “Suspension Period”): (i) the maximum consolidated leverage ratio is increased from 2.50 to 1.0 to 2.75 to 1.0 for the four quarter period ended April 30, 2020 and suspended thereafter until the end of the Suspension Period when it resumes at 2.50 to 1.0 and (ii) the minimum EBITDA covenant levels are reduced. In addition, the Second Amendment provides that (i) through April 30, 2021, the Company is required to maintain minimum liquidity (comprised of unrestricted cash and cash equivalents and unutilized commitments under the Credit Agreement) of $100.0 million, (ii) during the Suspension Period, certain covenants, including covenants related to dividends, share repurchases, debt incurrence, investments and capital expenditures, have been tightened and (iii) during the Suspension Period, the interest rate for borrowings under the Credit Agreement is increased to LIBOR plus 2.75% per annum and the commitment fee in respect of the unutilized commitments is increased to 0.45% per annum. In addition, the Second Amendment permanently increased the LIBOR floor for loans under the Credit Agreement from 0% to 1.00% and permanently reduced the minimum EBITDA financial covenant level to $35.0 million starting with the four-quarter period ending July 31, 2021.

The foregoing summary of the Second Amendment is qualified by reference to the full text of the amendment, which is attached as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2020 and incorporated herein by reference.

The Company had weighted average borrowings under the facility of $44.5 million and $50.6 million, with a weighted average interest rate of 3.75% and 1.00% during the three months ended October 31, 2020 and 2019, respectively. The Company had weighted average borrowings under the facility of $60.5 million and $50.2 million, with a weighted average interest rate of 2.37% and 1.00%, during the nine months ended October 31, 2020 and 2019, respectively.

A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of October 31, 2020, and 2019, these lines of credit totaled 6.5 million Swiss Francs for both periods, with a dollar equivalent of $7.1 million and $6.6 million, respectively. As of October 31, 2020, and 2019, there were no borrowings against these lines. As of October 31, 2020, and 2019, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.3 million, and $1.2 million, respectively, in various foreign currencies, of which $0.6 million, in both periods, was a restricted deposit as it relates to lease agreements.

Cash paid for interest, including unused commitments fees, was $1.3 million and $0.5 million for the nine-month period ended October 31, 2020 and July 31, 2019, respectively.

The Company did not pay cash dividends during the nine months ended October 31, 2020. The Company paid cash dividends of $0.60 per share or $13.8 million during the nine months ended October 31, 2019. The decision of whether to declare any future cash dividend, including the amount of any such dividend and the establishment of record and payment dates, will be determined, in each quarter, by the Board of Directors, in its sole discretion. The Company is committed to resuming dividend payments when the environment and its business stabilize and dividends are permitted by the terms of its revolving credit facility (see Note 9 – Debt and Lines of Credit).

On August 29, 2017, the Board approved a share repurchase program under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time, depending on market conditions, share price and other factors. Under this program the Company was permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expired on August 29, 2020. See Note 9 – Debt and Lines of Credit – for restrictions on share repurchase under the Company’s revolving credit facility. During the nine months ended October 31, 2020, the Company did not repurchase any shares of its common stock.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet financing or unconsolidated special-purpose entities.

Accounting Changes and Recent Accounting Pronouncements

See Note 3- Recent Accounting Pronouncements to the accompanying unaudited Consolidated Financial Statements for a description of certain accounting changes and recent accounting pronouncements which may impact the Company’s Consolidated Financial Statements in future reporting periods.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rate Risk

The Company’s primary market risk exposure relates to foreign currency exchange risk (see Note 10 – Derivative Financial Instruments to the Consolidated Financial Statements). A significant portion of the Company’s purchases are denominated in Swiss Francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro, Swiss Franc and the British Pound. The Company reduces its exposure to the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rate risk through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets. The earnings impact is mostly offset by the effects of currency movements on the underlying hedged transactions. To the extent that the Company does not engage in a hedging program, any change in the Swiss Franc, Euro, British Pound, Chinese Yuan and Japanese Yen exchange rates to local currency would have an equal effect on the Company’s earnings.

From time to time the Company uses forward exchange contracts, which do not meet the requirements of qualified hedges, to offset its exposure to certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and, therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise, thereby offsetting the current earnings effect resulting from the revaluation of the related foreign currency receivables and liabilities.

As of October 31, 2020, the Company’s entire net forward contracts hedging portfolio consisted of 21.6 million Chinese Yuan equivalent, 6.0 million Swiss Francs equivalent, 20.0 million US dollars equivalent, 24.0 million Euros equivalent and 5.6 million British Pounds equivalent with various expiry dates ranging through January 12, 2021, compared to a portfolio of 37.4 million Chinese Yuan equivalent, 28.0 million Swiss Francs equivalent, 37.4 million US dollars equivalent, 27.6 million Euros equivalent and 10.9 million British Pounds equivalent with various expiry dates ranging through April 22, 2020, as of October 31, 2019. If the Company were to settle its Swiss Franc forward contracts at October 31, 2020, the net result would be an immaterial net loss. As of October 31, 2020, the Company’s British Pound, Chinese Yuan, US Dollar and Euro forward contracts had no gain or loss. The Company had no cash flow hedges as of October 31, 2020 and October 31, 2019, respectively.

Commodity Risk

The Company considers its exposure to fluctuations in commodity prices to be primarily related to gold used in the manufacturing of the Company’s watches. Under its hedging program, the Company can purchase various commodity derivative instruments, primarily futures contracts. When held, these derivatives are documented as qualified cash flow hedges, and the resulting gains and losses on these derivative instruments are first reflected in other comprehensive income, and later reclassified into earnings, partially offset by the effects of gold market price changes on the underlying actual gold purchases. The Company did not hold any future contracts in its gold hedge portfolio as of October 31, 2020 and 2019, thus, any changes in the gold purchase price will have an equal effect on the Company’s cost of sales.

Debt and Interest Rate Risk

Floating rate debt at October 31, 2020 and 2019 totaled $37.3 million (25 million in Swiss francs and $10 million) and $50.7 million (50 million in Swiss francs), respectively. The debt outstanding at October 31, 2020 is based on LIBOR plus 2.75% per annum. As of October 31, 2020, the Company had weighted average borrowings of $60.5 million with a weighted average interest rate of 2.37%. The Company does not hedge these interest rate risks. Based on the average floating rate debt outstanding during the nine months ended October 31, 2020, a one-percent increase or decrease in the average interest rate during the period would have resulted in a change to interest expense of $0.4 million for the nine months ended October 31, 2020.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, it should be noted that a control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that its objectives will be met and may not prevent all errors or instances of fraud.

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at a reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the three months ended October 31, 2020, that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputes the reasonableness of the Company’s historical allocation formulas and proposes an alternative methodology that would imply approximately $5.1 million in underpaid duties over the five-year period covered by the statute of limitations, plus possible penalties and interest. The Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. The Company continues to provide U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation formulas. Although the Company disagrees with U.S. Customs’ position, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a mutually-satisfactory resolution.

In addition to the above matter, the Company is involved in other legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows.

Item 1A. Risk Factors

As of October 31, 2020, there have been no material changes to any of the risk factors previously reported in the Company’s 2020 Annual Report on Form 10-K as supplemented by our subsequent quarterly reports on Form 10-Q.

This section supplements and updates certain of the information found under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed with the Securities and Exchange Commission on March 26, 2020 (the “2020 Form 10-K”), and is based on the information currently known to us and developments since the date of the 2020 Form 10-K filing. The matters discussed below should be read in conjunction with the risk factors set forth in the 2020 Form 10-K. However, the risks and uncertainties that we face are not limited to those described below and those set forth in the 2020 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our common stock, particularly in light of the fast-changing nature of the COVID-19 pandemic and its impacts on economic and operating conditions.

The recent COVID-19 novel coronavirus, or other public health threats and epidemics, could materially adversely affect our business.

In late 2019, there was an outbreak of a novel strain of coronavirus (COVID-19) that began in Wuhan, China that subsequently spread to the rest of the world. The World Health Organization recognized COVID-19 as a pandemic on March 11, 2020. In response to the outbreak, in mid-March 2020, the Company and the majority of the Company’s wholesale customers temporarily closed all of their retail stores due to health concerns associated with the COVID-19 pandemic. Although the Company reopened all of its retail stores during the second quarter and most of the Company’s brick and mortar wholesale customers have reopened the majority of their retail locations as well, the discretionary consumer goods segment remains highly challenged. Various containment and mitigation measures that have been imposed by governmental and other authorities around the world (such as quarantines and other social distancing requirements) have adversely affected sales of our products, given that those sales are heavily dependent on customer traffic in traditional retail stores, such as those of our wholesale partners, and our Company stores. Such measures also adversely impacted our supply chain and resulted in late deliveries. The continuation or tightening of such containment and mitigation measures could continue or exacerbate the adverse effect on our results of operations and financial condition. These trends could worsen if COVID-19 infections continue to increase as people spend more time congregating indoors due to the colder fall and winter weather in the northern hemisphere, which is where the Company’s biggest markets are located. In addition, as potential consumers of our products face layoffs and other negative economic impacts from the COVID-19 outbreak, their disposable income for discretionary purchases and their actual or perceived wealth may be negatively impacted, potentially having a materially adverse impact on our sales that may extend beyond the end of the health crisis.

Adverse general economic conditions arising from the COVID-19 outbreak, or from other public health threats and epidemics, could also result in an increase in bankruptcies or insolvencies involving our suppliers and wholesale customers, which could also have a materially adverse effect on our operations and financial condition. The impact of the outbreak of COVID-19 on the Company’s liquidity, revenues and results of operations cannot be predicted at this time due to the high level of uncertainty, unknown future developments and duration of containment measures.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On August 29, 2017, the Board approved a share repurchase program under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time through August 29, 2020, depending on market conditions, share price and other factors. Under this program, the Company was permitted to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. During the three months ended October 31, 2020, the Company did not repurchase any shares of its common stock.

At the election of an employee, upon the vesting of a stock award or the exercise of a stock option, shares of common stock having an aggregate value on the vesting of the award or the exercise date of the option, as the case may be, equal to the employee’s withholding tax obligation may be surrendered to the Company by netting them from the vested shares issued. Similarly, shares having an aggregate value equal to the exercise price of an option may be tendered to the Company in payment of the option exercise price and netted from the shares of common stock issued upon the option exercise. An aggregate of 1,981 shares were repurchased during the three months ended October 31, 2020 as a result of the surrender of shares of common stock in connection with the vesting of certain restricted stock awards and stock options.

The following table summarizes information about the Company’s purchases for the three months ended October 31, 2020 of equity securities that are registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

Issuer Repurchase of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Amount that May Yet Be Purchased Under the Plans or Programs
August 1, 2020 – August 31, 2020		1,753	$	11.57		—	$	36,405,816
September 1, 2020 – September 30, 2020		228		11.57		—		36,405,816
October 1, 2020 – October 31, 2020		—		—		—		36,405,816
Total		1,981	$	11.57		—	$	36,405,816

Item 6. Exhibits

10.1*		License Agreement, dated as of 19 August 2020, among Calvin Klein, Inc., Movado Group, Inc. and Swissam Products Limited.

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from Movado Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2020 filed with the SEC, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document.

104		Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL).

* Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		MOVADO GROUP, INC.
		(Registrant)

Dated: November 24, 2020	By:	/s/ Sallie A. DeMarsilis
		Sallie A. DeMarsilis Executive Vice President, Chief Operating Officer, Chief Financial Officer and Principal Accounting Officer

EXHIBIT 10.1

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

LICENSE AGREEMENT

BETWEEN

CALVIN KLEIN, INC.

AND

MOVADO GROUP, INC.

TABLE OF CONTENTS



				Page
ARTICLE I. GRANT				1

	1.1	License		1
		1.1.1	Exclusion of Certain E-Commerce Sales	1
		1.1.2	Right to Manufacture	2
		1.1.3	Right to Operate Retail Stores	2
	1.2	Reservation		3
		1.2.1	Retail Stores; Company-Controlled Stores	3
		1.2.2	E-Commerce/M-Commerce/Promotional Goods	3
		1.2.3	Third Party Licensees	4
	1.3	Limitations		4
	1.4	Definitional Disputes		4
	1.5	Exploitation of the License		4
		1.5.1	Best Efforts	4
		1.5.2	Non-Competition	5
	1.6	Showrooms; In-Store Shops; Trade Shows		5
		1.6.1	Showrooms	5
		1.6.2	In-Store Shops	5
		1.6.3	Trade Shows	5
		1.6.4	Visual Design Personnel	5

ARTICLE II. LICENSE PERIOD				6

	2.1	License Period		6
	2.2	Extension		6

ARTICLE III. SALES				6

	3.1	Sales/Marketing and Production Plans		6
	3.2	Deliberately Omitted		7
	3.3	Sales to CKI and its Employees, Affiliates, and CKI Third-Party Licensees		7

ARTICLE IV. LICENSE FEES				7

	4.1	Requirement of Royalties		7
		4.1.1	Percentage Royalties or Fees	7
		4.1.2	Gross and Net Sales	8
		4.1.3	Guaranteed Minimum Royalties or Fees or MGF's	8
	4.2	Royalty Statements		9
	4.3	Books and Records		9
	4.4	Underpayments		9
	4.5	Manner of Payment		10
	4.6	Interest on Late Payment		10
	4.7	No Set-Off		10
	4.8	Taxes		10
	4.9	Financial Statements/Retail Sell-Through		10

ARTICLE V. ADVERTISING AND PROMOTION				11

	5.1	Advertising		11
		5.1.1	Deliberately Omitted	11
		5.1.2	Advertising Obligation	11
		5.1.3	CRK Fee	12
		5.1.4	Co-op Advertising	12


		5.1.5	Sole and Absolute Contribution	13
	5.2	‘Usage’		14
	5.3	Use of Advertising and Promotional Materials		14
	5.4	Runway Shows and Other Samples		14
	5.5	CRK Approvals Not Involving Creation		14

ARTICLE VI. QUALITY AND STANDARDS				14

	6.1	Distinctiveness and Quality of the Licensed Mark		14
		6.1.1	Consistency with Other Products	15
	6.2	Design		15
		6.2.1	Design	15
		6.2.2	Development Schedule	15
		6.2.3	Staff	15
		6.2.4	Global Brand Seasonal Design Brief	15
		6.2.5	Certain Other Approval	16
		6.2.6	Prototypes	16
		6.2.7	CKI Review and Record	16
		6.2.8	Final Approval and Sales	16
		6.2.9	Timely Products	16
		6.2.10	Use of Designs etc.	16
		6.2.11	Design Response	16
	6.3	Manufacture of Licensed Products by Third Parties		17
	6.4	Non-Conforming Products		17
	6.5	Approvals		17
	6.6	Marketing, Labeling, Packaging, Promotions, Business Materials		17
	6.7	Inspection of Facilities		18
	6.8	Samples and Artwork		18
	6.9	Know-how		18
	6.10	Meetings		18
	6.11	Design Direction		18
	6.12	Design Rights		18
	6.13	Shops, Stores, Retail Outlets		19
	6.14	Disposal of Seconds and Close-Outs		19
		6.14.1	Seconds	19
		6.14.2	Close-Outs	20
		6.14.3	Off-Price Channel Cap (aka “OP A/C Cap”)	20
	6.15	Standards of Conduct		20
		6.15.1	Standards	20
		6.15.2	Audit Requirement	20
		6.15.3	Approval	21
		6.15.4	Use of Facility	21
		6.15.5	No Fur Policy	21
		6.15.6	Animal Welfare and Sustainable Materials	22
		6.15.7	Additional Corporate Responsibility Opportunities	22
		6.15.8	CSR Co-operation	22
	6.16	Personnel		22

ARTICLE VII. THE LICENSED MARK				23

	7.1	Rights to the Licensed Mark		23
		7.1.1	Ownership of Licensed Mark	23
		7.1.2	No Adverse Actions	23
		7.1.3	Registrations	23
		7.1.4	Survival	23
	7.2	Protecting the Licensed Mark.		23


	7.3	Use of the Licensed Mark			23
		7.3.1	Compliance with Legal Requirements		23
		7.3.2	Use with Other Name		24
		7.3.3	Execution of Documents		24
		7.3.4	Registration		24
	7.4	Ownership of Copyright			24
	7.5	Infringement, Counterfeits and Parallel Imports			24
		7.5.1	Infringements		24
		7.5.2	Counterfeits and Parallel Imports		24
			7.5.2.1	The Network	24
			7.5.2.2	Diversion	25
		7.5.3	Criminal Proceedings		25
		7.5.4	Enforcement Activities		25
		7.5.5	Nature of Proceedings		25
		7.5.6	Cooperation		25
	7.6	Trademark Security			25
		7.6.1	Counterfeit Protection		25
		7.6.2	Trademark Security		25
	7.7	Use of Licensed Mark on Invoices, etc.			26
	7.8	Monitoring			26

ARTICLE VIII. TERM AND TERMINATION					26

	8.1	Expiration			26
	8.2	Other Rights Unaffected			26
	8.3	Immediate Right of Termination of the License			26
	8.4	Termination With Notice and Right to Cure			28
	8.5	Effect of Termination			28
	8.6	Inventory Upon Termination			29
	8.7	Freedom to License			29
	8.8	Rights Personal			29
	8.9	Trustee in Bankruptcy			29
	8.10	Compensation			30

ARTICLE IX. INDEMNIFICATION AND INSURANCE					30

	9.1	Indemnification by the Licensee			30
	9.2	Notice of Suit or Claim			30
	9.3	Indemnification by CKI			30
	9.4	Insurance			31
		9.4.1	Requirement		31
		9.4.2	Theft and Destruction Coverage		31
		9.4.3	General Provision		31
		9.4.4	Approved Carrier/Policy Changes		31
		9.4.5	Evidence of Coverage		31
		9.4.6	Territory		31

ARTICLE X. COMPLIANCE WITH LAWS					31

	10.1	Compliance with Laws			31
	10.2	Equitable Relief			33

ARTICLE XI. MISCELLANEOUS					33

	11.1	Warranties and Representations of the Parties			33
	11.2	Definitions			33
	11.3	Notices			33
	11.4	No Assignment Without Consent			34


	11.5	No Sublicense; No Distribution Agreement Without Consent	34
	11.6	Assignment by CKI	34
	11.7	No Agency	34
	11.8	Suspension of Obligations	34
	11.9	Benefit	35
	11.10	Entire Agreement; Amendment	35
	11.11	Non-Waiver	35
	11.12	Severability	35
	11.13	Headings	35
	11.14	Counterparts	35
	11.15	Governing Law	35
	11.16	Jurisdiction	35
	11.17	Non-Solicitation	35
	11.18	Confidentiality	36

SCHEDULES

	SCHEDULE 6.13 APPROVED ACCOUNTS
	SCHEDULE 6.14 APPROVED SECONDS AND CLOSE-OUTS ACCOUNTS
	SCHEDULE 6.2.1 GLOBAL BRAND SEASONAL DESIGN BRIEF


EXHIBITS
	EXHIBIT P	PRODUCTS
	EXHIBIT PF	ROYALTY STATEMENT
	EXHIBIT PVH-A	PVH – THIRD-PARTY MANUFACTURING AGREEMENT
	EXHIBIT PVH-B	PVH – PRODUCTION FACILITY EVALUATION FORM
	EXHIBIT T	TERRITORY
	EXHIBIT 6.15.1	CSR DOCUMENTS
	EXHIBIT 10.1A	E-COMMERCE GUIDELINES
	EXHIBIT 10.1B	RESTRICTED SUBSTANCES/CONFLICT MINERALS

LICENSE AGREEMENT

LICENSE AGREEMENT, dated as of 19 August 2020, between CALVIN KLEIN, INC. (“CKI” or “Licensor”), a New York corporation with an address at 205 W. 39^th Street, New York, New York 10018, and MOVADO GROUP, INC. (“MGI”), a New York corporation, with an address at 650 From Road, Suite 375, Paramus, New Jersey 07652 and SWISSAM PRODUCTS LIMITED, a Hong Kong corporation with an address at 29F Citicorp Centre, 18 Whitfield Road, North Point, Hong Kong (“SPL,” and together with MGI, the “Licensee”).

WITNESSETH:

WHEREAS, Licensee desires to obtain from CKI, and CKI is willing to grant to the Licensee, a license in the Territory (as hereinafter defined), to use the trademarks “CALVIN KLEIN” and “CK/CALVIN KLEIN” (as specifically set forth and defined below) in the form and format designated by CKI, or as may be subsequently updated or designated by CKI (or such other logo form or mark in the form and format as may be subsequently designated by CKI), at any time from time to time (each, a “Licensed Mark”) in connection with the manufacture, wholesale sales and on a limited basis as noted hereunder, retail sale, distribution, advertising and promotion of men’s and women’s watches and jewelry (the “Products”) [***] as set forth in Exhibit P, subject to the terms contained in this Agreement; provided that Products do not include men’s cufflinks or tie clips (or tie bars) when (and only when) such items are sold as a set together with shirts and/or ties. Products approved by CKI as part of a seasonal Collection hereunder and bearing the Licensed Mark (or from which the trademark has been removed as noted in §6.4) are hereinafter referred to as “Licensed Products” or “Articles”. Capitalized terms are defined in the section herein set forth.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I. GRANT

1.1License. CKI hereby grants to the Licensee a license (the “License”), without the right to sublicense or assign, and subject to and in accordance with the terms contained in this Agreement, to use the Licensed Mark, during the License Period in connection with the manufacture (on an exclusive basis except as otherwise specified herein e.g. GWP’s, Collaborations, Regional expiration) and sale, and distribution, and advertising and promotion (on an exclusive basis except as otherwise provided herein e.g. GWP’s, Collaborations, Regional expiration), of Products ([***]as set forth in Exhibit P) in the “Territory,” consisting of the world, in the Regions and jurisdictions on Exhibit T attached. The Territory includes without limitation wholesale sales to any and all outlets where products are sold as duty-free, duty-paid, reduced duty, tax-free or on a reduced tax basis and (i) such outlets are located in or in immediate proximity to a travel terminal including airports, train terminals, ferry terminals, and cruise terminals, or (ii) such products are offered for sale during travel on a carrier such as in flight, and on a train, or on board a cruise vessel (all collectively aka “travel retail channels”) for clarity and CKI’s internal purposes.

1.1.1Exclusion of Certain E-Commerce Sales. The License excludes the sale, distribution, and promotion of Licensed Products via dedicated Calvin Klein sites or mini sites of commerce conducted on, made available through, or facilitated by interactive or electronic media, or including through or facilitated by any mobile device (that is, sale or purchase by means of any electronic wireless technology, or a mobile device) whether now known or hereafter developed, including, without limitation, the Internet and on-line service providers, regardless of the means through which it is conducted (hereinafter “E-Commerce”) and as a subcategory of E-Commerce, through or facilitated by any mobile device (hereinafter, “M-Commerce”), in the Territory. However, sales through the internet sites of CKI approved brick and mortar retail accounts, whether via E-Commerce or otherwise, or to E-Commerce retailers (aka “e-tailers”), shall be on an exclusive basis under this Agreement, through M-Commerce or otherwise, subject to standard required safeguards imposed as to such internet sales, including limiting to personal consumption and are granted to Licensee hereunder on account by account basis. For purposes hereof, including but not by way of limitation under §6.13 and §6.14, approval by CKI of any brick and mortar retail account does not include automatic approval of any of such account’s internet sites whether via E-Commerce or M-Commerce or otherwise, unless and only if explicitly approved in writing (including any reasonable contingencies or limitations) at the time of CKI’s approval of such brick and mortar retail account. The parties acknowledge that under European Union (“EU”) laws, rules and regulations, preclusion of sales between jurisdictions in the EU including preclusion of such cross-border sales via e-commerce, is prohibited.

1.1.2Right to Manufacture. The Licensee’s right to manufacture in the Territory is exclusive except that CKI and others have certain limited manufacturing rights as to certain CKI reserved rights to the extent provided for hereunder e.g. GWP’s, Collaborations, Regional expiration. Licensee shall take reasonable precautions to prevent all labels, tags, packaging material, business supplies and advertising and promotional materials and all other forms of identification bearing the Licensed Mark (collectively, “Labels”) from being used otherwise than in connection with the distribution and sale of Licensed Products. The Licensee shall not sell Licensed Products to any entity which it knows, or should know, is an unapproved account or intends to sell other than as permitted hereunder (e.g. for example certain permitted distributors but not jobbers).

1.1.3Right to Operate Retail Stores. CKI hereby grants to Licensee the right to use the Licensed Mark on and in connection with the operation of mono brand, full price ([***]) retail stores (i.e. free-standing stores, shop-in-shop leased concessions and kiosks) under the name “Calvin Klein Watch & Jewelry” to which Licensee will enter into applicable lease agreements and where Licensee will sell Licensed Products directly to consumers, in all cases only in such locations approved in writing by CKI (“Retail Stores”) and subject to the following terms and conditions:

(a) Licensee understands that it is of paramount importance that the look and “feel” of the Retail Store be consistent with the “Calvin Klein” image. Accordingly, CKI shall have approval of the final construction drawings and decoration of the Retail Store as well as all music, packaging, business material, advertising and promotional materials utilized and promotional events in connection with or for the Retail Store. Licensee may propose designs and design concepts, and will make available the design and technical expertise of its employees and Affiliates, when appropriate and feasible, all on a timely basis for CKI to consider but CKI shall have the right to approve the overall design, décor, fixturing and ancillary materials used in the design, and décor of the Retail Store. CKI also shall have the right to approve and/or designate approval of any subsequent material or substantive changes to the design and decoration of the Retail Stores as well as all business material, advertising and promotional materials, and promotional events utilized in connection with or for the Retail Stores.

(b) [***]

(c) When and where deemed appropriate by Licensee in its discretion, Licensee will exploit its right of opening and maintaining Retail Stores and will:

(i) be responsible for and bear the cost of all planning, design, development, build-out and operation of the Retail Stores, including the production and the costs of all elements pertaining to the decoration and ambience of the Retail Stores in each case in accordance with CKI’s reasonable instructions or as otherwise approved by CKI;

(ii) permit CKI to periodically inspect at any time the Retail Stores. Any such inspection shall be at CKI's expense. If CKI determines as a result of such inspection that the Retail Stores have not been maintained in accordance with CKI's reasonable specifications, Licensee will make any modifications not requiring refixture to design, layout, décor, ambience (including music) visual display or merchandise display formats as CKI may reasonably require, within thirty (30) days of notice thereof, and will bear the costs incurred in connection therewith, provided that Licensee shall have twelve (12) months after notice from CKI regarding modifications requiring refixture. Licensee shall then certify in writing to CKI that such corrections have taken place. CKI in connection with a follow-up inspection to determine compliance with CKI's directions may examine and verify such corrections. The costs of any follow-up inspection by CKI conducted to ensure correcting modifications have been made, will be borne by CKI, unless CKI determines during such inspection that all the correcting modifications have not been made to CKI’s reasonable satisfaction, in which case the costs of such follow-up inspection and any additional follow-up inspection to ensure that those not yet made have subsequently been completed in accordance with the provisions hereof, will be reimbursed by Licensee, provided CKI notifies Licensee in advance that this is a “Correction Inspection” and provides Licensee with estimated costs;

(iii) promptly reimburse CKI for the reasonable costs and expenses of CKI personnel (including per diem rates for such personnel which may be based on comparable rates that would be charged by third parties for comparable services) and also for the reasonable costs and expenses of other personnel or independent third-party consultants such as in-store coordinators, visual display personnel, stylists (if applicable), merchandising personnel, advertising and public relations personnel with respect to services performed by CKI hereunder in accordance with CKI’s then customary procedures which are either requested of CKI by Licensee and as agreed to by CKI, or are otherwise agreed to by CKI and Licensee, based on estimates provided in advance;

(iv) locate each Retail Store in prestigious commercial areas, with the specific locations of each Retail Store subject to CKI's approval;

(v) conduct and operate the Retail Stores in accordance with all applicable health, safety, occupancy and other governmental laws, rules and regulations;

(vi) maintain the Retail Stores in sanitary condition and in good repair at all times, maintain the decor, fixtures, merchandising, visual display and music in accordance with CKI’s approved designs, decor and fixtures, and CKI’s reasonable guidelines, operating manual or other written requirements or regulations for merchandising, visual display and music, as promulgated by CKI, from time to time;

(vii) employ exemplary personnel for Retail Stores including a store manager and require and enforce an appropriate uniform dress code for all such personnel; and

(vii) purchase, stock and make available for purchase by consumers a supply of Licensed Products for each product category and each seasonal collection, including watches and jewelry constituting representative collections for such product categories and in amounts adequate to satisfy consumer demand.

1.2Reservation. Provided Licensee has complied with the terms of the Agreement, at Licensee’s written request, Licensee may exploit CALVIN KLEIN JEANS (no other derivative marks) in connection with the manufacture, wholesale and retail sale, distribution, advertising and promotion of Products with CKI’s prior written agreement, exercised in CKI’s sole discretion, under terms and conditions set forth therein. The products bearing the applicable derivative will be[***], (and for distribution through certain distributors of Licensee and retail channels) as agreed between the parties and set forth in the applicable amendment to the Agreement (as part of the applicable grant). Licensee hereby agrees that, unless otherwise approved by CKI in its sole discretion, the CK/CALVIN KLEIN Licensed Mark may only be used for Swiss made watch Licensed Products. In addition, CKI may subsequently consider and evaluate what it deems appropriate (in light of CKI’s brand architecture) and may designate a different name, or mark, or, instead, with Licensee’s approval, identification or indicia (e.g. design elements or color), that CKI believes would be more appropriate for Licensee to use to distinguish Swiss made watch Licensed Products, in which case such replacement name, mark, identification or indicia will be added hereto by amendment. Except as noted above, CKI reserves all rights in and to the Licensed Marks except as specifically granted herein including, without limitation, those rights set forth in this § 1.2, and CKI reserves all rights to “Calvin”, “Calvin/Calvin Klein”, and all logo forms thereof, and all rights to Calvin Klein and other marks in other logo forms, or on other color labels, as well as with other words e.g. “Calvin Klein Collection”, “Calvin Klein Performance”, “Calvin Klein Golf”, “Calvin Klein platinum” or “Calvin Klein” on a platinum color label and any other derivations or variations or logos or other marks (or other logo forms of the Licensed Marks). For the avoidance of doubt, CKI’s reservation of rights to a “Collection” or top price tier of Licensed Marks relates to jewelry. However, CKI will not exercise any of such rights, or authorize any third party besides Licensee to exercise such rights, except (i) with respect to a “Collection” tier of jewelry Products at suggested retail prices no lower than [***] of the highest suggested retail prices for jewelry Products of the same type included in the license grant hereunder (“Collection Tier Jewelry”) and (ii) as set forth in sections 1.2.1 and 1.2.2 below. Furthermore, CKI agrees that it will not grant to a third party a license to use a “Collection” tier derivative of the Licensed Mark in the Territory on jewelry Products during the term of the Agreement unless [***].

1.2.1Retail Stores; Company-Controlled Stores. CKI reserves the right to use, and to authorize others to use, the Licensed Mark upon and/or in connection with the sale and promotion of Licensed Products among other merchandise to consumers at retail in the Territory through mono-brand Calvin Klein stores that are owned or controlled either (i) by CKI or its Affiliates (Affiliates shall include all affiliated entities in which CKI or any PVH affiliated group member has a 50% interest) (“CKI Stores”), or (ii) by third-party licensees of CKI or its Affiliates; in both cases including via E-Commerce and/or M-Commerce via certain Calvin Klein sites or mini sites as referenced herein. Notwithstanding the above, such CKI Stores shall not solely sell the Licensed Products (i.e. they will sell also other product categories under the Licensed Mark).

1.2.2E-Commerce/M-Commerce/Promotional Goods/Special Project Lines/Capsule Collections/Limited Edition Collections. CKI reserves the exclusive right to use the Licensed Mark upon and/or in connection with the retail sale, distribution and promotion of Products via dedicated Calvin Klein sites and mini sites (whether E-Commerce or M-Commerce) as set forth in §1.1.1 above (including without limitation through CKI’s E-Commerce Calvin Klein domain

name sites and mini sites and M-Commerce Calvin Klein domain name sites and mini sites (including for example mobile device applications relating to such E-commerce sites, or mobile device applications relating to brick and mortar Calvin Klein stores (including CKI Stores and Calvin Klein stores of third party licensees of CKI or its Affiliates))). Subject to clauses (a) and (b) below, CKI also reserves the exclusive right (for itself and its Affiliates, and other CKI authorized parties) to use the Licensed Mark on and in connection with Products (i) in connection with gifts, give-aways, promotions, gift-with-purchase or purchase-with-purchase items (given “free” or as a “purchase-with-purchase” or “gift-with-purchase” of other merchandise) aka “GWP’s”, and (ii) in connection with special projects and/or limited edition collections, including but not limited to those involving an artist, designer/brand, celebrity or institutional collaboration, and/or event sponsorship programmes, and/or projects, such as involving charitable or non-profit causes (e.g. [***]), or involving residential, rental, resort entities or locations (e.g. hotels, condominium residences), and/or other special event programmes (e.g. decorative show houses, decorative arts fairs and/or exhibits, and/or pop-up shops and/or pop-up areas within stores or malls (e.g. leased concession areas)), or exhibits involving charitable or other special event programmes (e.g. pop-up shop at [***]) (individually and collectively “Collaborations”).

(a) For GWP’s and Collaborations involving watches, CKI (or any Affiliates or CKI authorized party) shall purchase such watches only from Licensee. [***].

(b) For GWP’s and Collaborations involving jewelry, CKI reserves the right, notwithstanding anything to the contrary contained in this Agreement, to manufacture or purchase such jewelry from any supplier CKI (or any Affiliate or CKI authorized party) chooses, including the Licensee, subject to the following: [***].

1.2.3Third Party Licensees. CKI has granted its store licensees and store sublicensees the non-exclusive right to sell the Licensed Products in free-standing Calvin Klein stores in certain countries within the Territory.

1.3Limitations. The Licensee understands and agrees that CKI, its Affiliates, licensees, subcontractors or other permitted users may manufacture and sell or authorize third parties to manufacture and sell merchandise of any and all types and descriptions other than the Products in or outside the Territory, and as expressly set forth hereinabove to sell (and in certain instances manufacture) certain Products in the Territory (e.g. gwp’s etc.). In addition, no license is granted hereunder for the sale or distribution of the Licensed Products as premiums or giveaways, or to be disposed of under or in connection with similar methods of merchandising.

1.4Definitional Disputes. The Licensee acknowledges that due to the nature of the marketplace, the definition of Products may change or may not be amenable to precise delineation. In addition, the Licensee acknowledges that CKI does have and may hereafter have, other licensees within the Territory for products not constituting Products. In the event of any dispute between the Licensee and any other licensee of CKI in the Territory with respect to whether particular merchandise is covered by one or the other of their respective licenses, or there is otherwise a dispute over the definition of Licensed Products, CKI shall render a reasonable written determination which shall be conclusive and binding on the Licensee without legal recourse. For the avoidance of doubt, smartwatches constitute Products hereunder.

1.5Exploitation of the License.

1.5.1Best Efforts. At all times during the License Period, the Licensee shall use all commercially reasonable best efforts to exploit the License throughout each country in the Territory, including, but not limited to all commercially reasonable best efforts directed at: (i) selling what reasonably constitutes a full line and broad array of Products (at least on par with CKI’s competitors set forth in §1.5.2 below for the applicable Products in the applicable country unless otherwise agreed by CKI), within each seasonal collection of watch and jewelry Licensed Products within each Region (each, a “Collection”), subject to seasonal differences, and a sufficiently representative quantity of each type of Product (as to watches, to include certain styles of “smart” watches as deemed commercially practicable taking into account CKI-provided input and competitors’ then current product lines of watches, during seasonal design meetings (as per §6.2.4) and other CKI meetings (e.g. with licensing global marketing) between CKI and Licensee)) within each Collection; (ii) timely developing, producing and offering for sale each seasonal collection of Licensed Products so that they may be shown, marketed, sold and shipped to consumers on a timely basis; (iii) maintaining a sales force sufficient to provide effective distribution throughout all areas of the Territory; (iv) cooperating with CKI’s and any of its licensees’ marketing, merchandising, sales, and anti-counterfeiting programs as may be applicable; and (v) maintaining necessary financial position to adequately support the operations and obligations herein. Licensee will develop, implement and maintain a business continuity plan or programs, consistent with its corporate operating procedures, to provide reasonable assurance for the continuation of the operations of the license hereunder, and its exploitation, in the event of any calamity, other Acts of God, or disruption in Licensee’s business. Licensee will at all times

during the Term use all commercially reasonable best efforts to maintain an adequate operating performance and financial position, and adequately finance all of the above and all other operations of such division or subdivision as specified in this Agreement, which will include maintaining at all times throughout the Term of this Agreement, the financial covenants referenced in §8.3(n).

1.5.2Non-Competition. The Licensee and its Affiliates shall not enter into or obtain from any person or entity a license in the Territory for any of the Products bearing the name of any designer or designer brand (or any derivative or formative thereof) as follows: [***], without the prior written consent of CKI, (which consent may require a “consent fee” and conditions or contingencies); provided that consent shall not be required for any such license that arises as a result of the acquisition by Licensee of substantially all of the assets of or the outstanding securities of or otherwise acquiring control of an entity which, other than as its primary function, acts as a distributor or licensee of products bearing such competitive names. This provision shall not apply to any existing licenses held by the Licensee on or prior to the date hereof, or any renewals or extensions thereof.

1.6Showrooms; In-Store Shops; Trade Shows.

1.6.1.Showrooms. So long as the Licensee maintains a physical showroom for the majority of its brands, the Licensee shall, between 1 June 2021 and 31 January 2022, open and thereafter throughout the duration hereof maintain a separate and dedicated showroom area within its existing showrooms in New York, NY to fully exploit the rights granted to the Licensee hereunder. Such showroom area shall be used for the sole purpose of displaying, promoting and selling Licensed Products. All showroom areas shall be subject to the standards of CKI, and shall be designed and maintained in conformity with the prestige associated with the Licensed Mark. The plans for the showroom area, including décor, set-up and display (and changes thereto), and for any renovations thereto shall be subject to the reasonable prior written approval of CKI, which approval shall not be unreasonably withheld or delayed; provided, however, that CKI shall have 10 business days after its receipt of such plans to approve or disapprove such plans or such longer period as is reasonable under the circumstances. No later than 1 May 2021, CKI and the Licensee will mutually agree on a budget for the build-out of the above-referenced showroom area, the cost of which build-out shall not exceed [***] per square foot without the Licensee’s consent. The Licensee may (i) display the Licensed Mark on showroom doors and office directories and (ii) display the Licensed Products for sale in other showroom spaces, subject to the prior written approval of CKI to be reasonably exercised. The parties shall meet upon request to establish a budget for required or requested renovations to the showroom.

1.6.2In-Store Shops. The Licensee will throughout the duration of the Agreement participate in in-store shop or fixturing programs, with the Licensee’s customers throughout the Territory, and will spend (or reimburse CKI) amounts on in-store décor, refurbishments and fixturing (including development costs of consultants for design and fixturing prototypes) and on sales personnel or coordinators, sufficient in Licensee’s reasonable discretion to ensure and enhance the presentation of Licensed Products within its retail accounts, including appropriate stocking and merchandise mix. All such programs shall be designed in conformity with the prestige associated with the Licensed Mark, and plans for any such shop-in-shop areas shall be subject to the prior written approval of CKI to be reasonably exercised.

1.6.3Trade Shows. The Licensee shall display the Licensed Products at a separate booth space at all tradeshows attended by the Licensee to promote the Licensed Products. The design of such booth shall be developed in consultation with CKI’s visual design personnel, as provided in § 1.6.4.

1.6.4Visual Design Personnel. The Licensee shall consult with and utilize CKI’s visual design personnel in connection with the design, development and construction of showrooms, trade show booths, fixturing, signage and any in-store shops or in-store areas for the sale of Licensed Products within the stores of the Licensee’s customers, and shall provide all funds necessary in connection therewith (including, but not limited to, reasonable per diem rates for work performed by CKI’s visual display personnel based upon estimated amounts or anticipated expenditures, as provided or discussed in advance, or based upon agreed-upon-in-advance budgets), it being understood and agreed that the fabrication, manufacturing, production or construction of showrooms, trade show booths and fixtures may be performed by third parties. All such design, development and construction shall be subject to CKI’s ongoing approval in its reasonable discretion. Licensee will arrange for the opening of shop-in-shops within department stores and specialty stores using appropriate fixtures and signage, and to maintain seasonal visual display and “set-ups” of Licensed Products, as reasonably promulgated or approved by Licensor, and to stock such shop-in-shops with an appropriate merchandise mix of Licensed Products, pursuant to and consistent with Licensee’s shop-in-shop development program. Such in-store development programs shall be financed in a manner comparable to and commensurate with those of CKI’s competitors as to Licensed Products. CKI may periodically inspect Licensee’s showrooms,

shows at trade exhibitions, and such shop-in-shops. Any such inspection will be at CKI’s expense unless CKI determines as a result of such inspection that Licensee’s showrooms, trade exhibition shows or in-store shops or in-store areas have not been maintained in accordance with CKI’s reasonable specifications, in which case Licensee will at its expense promptly make any modifications to design, layout, decor, visual display or merchandise display formats as CKI may reasonably require and will bear the costs incurred in connection therewith, including any costs incurred by CKI in connection with follow-up inspections to determine the satisfactory completion of such modifications. The Licensee shall also promptly reimburse CKI for the reasonable costs and expenses of any CKI personnel, such as visual display, advertising and public relations (other than design), with respect to services performed by CKI under this § 1.6 or otherwise requested by the Licensee based upon estimated amounts or anticipated expenditures, as provided or discussed in advance, or based upon agreed-upon-in-advance budgets.

ARTICLE II. LICENSE PERIOD

2.1License Period or Term. The license period shall commence effective 1 January 2022, with the Spring 2022 season being the first season anticipated by the parties to be that for which Licensed Products will be offered for sale, and shall end on 31 December 2026 (the “License Period” or “Term”), unless sooner terminated as herein provided. Notwithstanding the foregoing, Licensee may manufacture Licensed Products in advance of 1 January 2022 so long as Licensee does not allow any such Licensed Products to be advertised, promoted, offered for sale, sold or distributed prior to such date. The period commencing 1 January 2022 and ending on 31 December 2022, and each 12-month period commencing on 1 January thereafter during the License Period are each referred to herein as an “Annual Period.” [***]The Licensee shall not distribute, sell, present for sale, promote, advertise or ship Licensed Products under any successor license (including this one) before expiration of Predecessor Licensee’s licenses at 31 December 2021. [***].

2.2 Extension. This Agreement shall be extended for an additional five (5) year renewal period commencing 1 January 2027 and ending on 31 December 2031 (the “Extension Term”), provided that Licensee:

(a)

makes a request for the Extension Term in writing at least [***], but no more than [***], before the expiration of the initial Term;

(b)

at the time it requests the Extension Term and throughout the balance of the initial Term, is in compliance with all material terms and conditions of this Agreement;

(c)

has attained a minimum [***] during the 12 month ending 30 June 2025 in Net Sales of watch and jewelry Licensed Products worldwide (and for each Region of North America, Europe, Asia and Latin America Net Sales of [***] respectively failing which, CKI may elect by written notice sent by [***] to not renew the applicable Region, in which case, MGF’s, MAE’s and in Sole and Absolute contributions minimum amounts to be applicable for the renewal Annual Periods determined for 2027 et seq. will be reduced by deducting from the totals the actual earned amounts (e.g. Percentage Fees) derived from Net Sales in each such Region or Regions in the 2025 and 2026 Annual Periods as applicable).

Licensee acknowledges that the advance notice is necessary to maintain the continuity of CKI’s licensing and marketing programs and the goodwill associated with the Trademarks. Time is of the essence in this regard and Licensee’s failure to make its request in time shall constitute a conclusive decision by Licensee not to seek an Extension Term.

ARTICLE III. SALES

3.1Sales/Marketing and Production Plans. Licensee shall deliver to CKI: (i) by 30 July of each Annual Period (by 30 July 2021 for the first Annual Period), Net Sales preliminary estimates for the immediately following Annual Period and the two subsequent Annual Periods (together with an updated estimate of Net Sales based on actual Net Sales through June, for the then current Annual Period); (ii) by each 30 January of each Annual Period, for the twelve (12) months ended 31 December (“calendar year”) constituting the immediately preceding Annual Period, approximate (estimated) actual total Net Sales and approximate (estimated) actual total aggregate advertising and promotional expenses (including all Co-operative Advertising and all promotional expenses) for such Annual Period; and (iii) not later than 30 days prior to the beginning of each Annual Period during the License Period, a detailed written marketing plan, forecast and pro forma business

plan (a “Licensing Forecast”), which shall contain a reasonable, good faith estimate of aggregate Net Sales for such Annual Period, as well as an updated plan for the two subsequent Annual Periods.

3.2Deliberately Omitted.

3.3Sales to CKI and its Employees, Affiliates, and CKI Third-Party Licensees. Subject to availability, the Licensee shall be obligated to sell Licensed Products to CKI, its Affiliates, CKI’s store licensees and CKI’s store sublicensees, (“CKI and related entities”) and to CKI’s employees as follows:

(A) for sale and distribution by: CKI and related entities through CKI Stores, or M-Commerce, or otherwise as provided herein and

(B) as to sales to CKI’s employees, at regularly scheduled trunk shows, or otherwise from time to time, for personal consumption.

The prices as to the foregoing shall be:

(i) as to Licensed Products under “(A)” shall be at [***] of the local regular retail price (i.e. a [***] discount off the local regular retail price), and

(ii) as to Licensed Products under “(B)”at prices which are not more than at least [***] off the regular wholesale price.

MAE’s, Sole and Absolute Contributions, and Co-op Advertising amounts shall be calculated without reference to sales to parties under §3.3. Percentage Fees shall be calculated at the rate of [***] of sales to parties under §3.3.

All such sales shall be separately indicated on statements accounting for Net Sales hereunder. The Licensee acknowledges and agrees that such sales of Licensed Products shall be in quantities designated by CKI, its Affiliates, or reasonably required by CKI’s licensees or distributors, or CKI’s employees as the case may be, subject to availability.

ARTICLE IV. LICENSE FEES

4.1Requirement of Royalties. All Licensed Products sold by the Licensee or its Affiliates or distributors (including those from which the Licensed Mark may have been removed, e.g., irregulars, and those “samples” of Licensed Products on which the Licensed Mark has not yet been placed or has been removed, which are thereafter sold) require the payment of royalties by the Licensee to CKI as set forth in this Article IV, except as otherwise provided in § 4.1.1. “Affiliates” of any party means all individuals and business entities, whether corporations, limited liability companies, partnerships, joint ventures or otherwise, which now or hereafter control, or are controlled, directly or indirectly, by such party, or are under common control with such party (and including for all purposes any joint ventures in which the party has a 50% interest.)

4.1.1Percentage Royalties or Fees. In respect of each Annual Period or portion thereof during the License Period, the Licensee shall pay CKI percentage royalties (“Percentage Royalties” or “Percentage Fees”) as follows: (i) [***] of Net Sales by Licensee and its subsidiaries (acting as approved distributors hereunder) to third parties, (ii) [***] of Net Sales to CKI or affiliated or unaffiliated store licensees, (which may include CKI’s distributors which have free-standing Calvin Klein store rights), (iii) [***] of Net Sales to Licensee’s owned stores/retail concessions, based on regular wholesale price (for applicable region) when shipped into stores/concessions, and (iv) [***] of Net Sales to Licensee’s third-party distributors (provided that distributor discounts are limited to not more than [***] off regular retail price in the aggregate for any Annual Period).

If Licensee or any of its subsidiary distributors, or other subsidiaries sells Licensed Products to consumers, the Percentage Fee shall be based on the bona fide regular wholesale price that Licensee charges similarly-situated retailers in the applicable region, irrespective of Licensee's internal accounting treatment of such sales.

Percentage Royalties shall be accounted for and payable quarterly no later than 30 April, 30 July, 30 October and 30 January with respect to Net Sales during the immediately preceding calendar quarter, except for the initial Annual Period for which they shall

be accounted for quarterly but paid annually by 30 January 2023. The Percentage Royalties shall be payable only to the extent of the excess, if any, of (i) the aggregate Percentage Royalties accrued for such calendar quarter and all prior calendar quarters in such Annual Period computed based upon Net Sales from the beginning of the Annual Period through the end of such quarterly periods during such Annual Period over (ii) the aggregate amount of the installments of the Guaranteed Minimum Royalties under §4.1.3 only as applicable hereunder and Percentage Royalties under §4.1.1, actually paid for such calendar quarter and all prior calendar quarters to date during such Annual Period (that is, on a quarterly Annual Period to date basis). In no event will any payments of Percentage Royalties or Fees for any Annual Period be credited against the Minimum Guaranteed Royalties or Fees for such or any subsequent Annual Period. All royalties shall accrue upon the sale of the Licensed Products, sometimes referred to as “Earned Percentage Royalties,” regardless of the time of collection of the proceeds from such sale by the Licensee or the failure to collect such proceeds. For purposes of this Agreement, a Licensed Product shall be considered “sold” upon the date of billing, invoicing, shipping or payment, whichever occurs first.

4.1.2Gross and Net Sales. “Gross Sales” means the invoiced amount of the bona fide, arm’s length wholesale price of Licensed Products when shipped, including, but not limited to, Seconds, Close-Outs, Off-Price Sales (if any), samples sold in employee sales (but not otherwise), in each case before any deductions for returns, allowances or discounts, and excluding freight, taxes and insurance separately itemized on an invoice in arms’ length transactions. If Licensee or any of its subsidiary distributors, or other subsidiaries sells Licensed Products to consumers, the Percentage Fee shall be based on the bona fide, arms’ length wholesale price that Licensee charges similarly-situated retailers in the applicable region, irrespective of Licensee's internal accounting treatment of such sales. If Licensee or any of its subsidiary distributors, or other subsidiaries sells Licensed Products to an Affiliated company (such sale, an “Interim Affiliate Sale”) which in turn sells the Licensed Products on a wholesale basis to an un-Affiliated third party (such sale, a “Final Third Party Sale”), then the Percentage Fee shall only accrue in respect of the Final Third Party Sale and not also in respect of the Interim Affiliate Sale. “Net Sales” means Gross Sales of Licensed Products as invoiced, less: (i) normal trade discounts (defined as reductions in or from the regular wholesale selling price that are customary in the trade) that Licensee actually grants in writing prior to delivery; (ii) returns for damaged or defective goods or otherwise, in each case actually allowed and returned to the Licensee (or destruction of returns in place that Licensee authorizes); (iii) markdown or margin allowances (defined as credits to a customer after delivery that Licensee actually grants in writing) but excluding advertising and promotional allowances (except certain pre-holiday (e.g. mother’s day, father’s day, graduation) and special events (e.g. VIP sales, promo for friends and family), and special customer discounts on sales to retail accounts for these purposes); and (iv) taxes, freight and insurance to the extent the same are separately stated on Licensee’s invoices. No other discounts, reductions or deductions from Gross Sales shall be taken in computing Net Sales, including, but not limited to, deductions for special promotions, advertising, warehouse or distribution expenses, other allowance (such as advertising) or for uncollectible accounts. The combined deductions from the Gross Sales of Licensed Products for the items listed in (i), (ii) and (iii) shall not exceed [***] of Gross Sales of Licensed Products shipped for any quarterly period (on a carried forward year to date basis for any “underage” or “overage”) within any Annual Period (e.g. and of 1st quarters, deduction/reductions are at [***], only [***] permitted with [***] overage carried forward, end of 2^nd quarter deduction/reductions are at an aggregate of [***] ([***] in 2^nd quarter, but in aggregate with [***] carried forward, [***]), so [***] permitted with [***] overage carried forward), (and earned Percentage Fees on Net Sales shall be paid on such (“capped”) basis).

4.1.3Guaranteed Minimum Royalties or Fees or MGF’s. In respect of each Annual Period or portion thereof during the License Period starting with the 2023 Annual Period, the Licensee shall pay to CKI minimum royalties in an amount equal to [***] (the “Guaranteed Minimum Royalties” or “Guaranteed Minimum Fees” or “MGF’s”) in advance in four equal installments no later than the tenth day of the first calendar quarter of such Annual Period to allow for computation of the prior Annual Period’s earned Percentage Fees and the first day of each subsequent calendar quarter during such Annual Period.

Annual Period/Year	MGF’s [***]
1 (2022)	[***]
2 (2023)	[***]
3 (2024)	[***]
4 (2025)	[***]
5 (2026)	[***]
6 et seq. (2027) et seq.	[***]

The Guaranteed Minimum Royalties or Fees for any Annual Period will be credited towards the Percentage Royalties due for the same Annual Period only (except that if, due to Net Sales being less than anticipated in the final quarter, payments of MGF’s installments and Percentage Fees exceed the amounts actually earned and due and payable for an Annual Period (thereby constituting an overpayment), then such overpayment amount will be credited by CKI to MGF’s installments or earned Percentage Fees due to CKI as to the subsequent Annual Period (or if overpayment is during the final Annual Period, towards earned Percentage Fees during the non-exclusive inventory disposal period)).

Solely by way of example, [***].

4.2Royalty Statements. At the time each payment of Percentage Royalties is due, the Licensee shall deliver to CKI a royalty accounting statement, substantially in the form of Exhibit B hereto, or as reasonably modified or supplemented by CKI or CKI’s Finance Department from time to time, signed by a responsible manager of the Licensee and certified by such manager as complete and accurate, stating that the Licensee is in compliance with the terms and conditions hereof and setting forth for each month during the immediately preceding calendar quarter, and for such quarter (or period) in the aggregate, and, in the case of the statement for the last calendar quarter of each Annual Period, for such Annual Period in the aggregate, all of the following information by season for each Region and jurisdiction in the Territory: (i) Gross Sales; (ii) the amount of returns, mark-down allowances and discounts from Gross Sales which properly may be deducted therefrom in calculating Net Sales; (iii) a computation of the amount of Percentage Royalties; (iv) Net Sales by account, including separately Final Third Party Sales by Licensee and the Licensee’s Affiliates, Net Sales to CKI and its Affiliates, to CKI’s employees, and to CKI’s third-party licensees separately by Licensee; (v) total regular price Net Sales, and as specified in §6.14.1 and §6.14.2 Seconds and Close-outs and calculations of Net Sales for OP Account purposes and earned Percentage Fees applicable thereto by Region and calculations of Net Sales by Region and Percentage Fees thereon and other earned amounts thereon for purposes of §2.2 MNST’s; and (vi) MAE’s expenditures, Co-operative Advertising Obligation and Sole and Absolute Contributions, as well as shop-in-shop expenditures under §1.6.2, as applicable; and (vii) all of the Licensee’s inventory of Licensed Products, by season (“Inventory”). (Licensee will use reasonable efforts to provide Licensor with monthly “flash reports” within ten (10) days, of estimated aggregate Net Sales and earned Percentage Royalties via e-mail, attention: Licensing Finance Department.) Within 120 days of the end of each Annual Period, the Licensee shall also deliver to CKI a certification from Licensee’s Chief Financial Officer that the accountings and statements applicable to Net Sales, Royalties (and the Advertising Obligation, Co-operative Advertising Obligation and Sole and Absolute Contributions) are accurate and in accordance with the provisions hereof. Receipt or acceptance by CKI of any statement furnished, or of any sums paid by the Licensee, shall not preclude CKI from questioning their correctness at any time.

4.3Books and Records. The Licensee shall, at its sole cost and expense, maintain complete and accurate books and records (specifically including, without limitation, the originals or copies of documents supporting entries in the books of account or electronic records) covering all transactions arising out of or relating to this Agreement. Such books and records shall be maintained in accordance with accounting principles generally accepted in the United States or as and when required by the Securities and Exchange Commission, in accordance with international financial reporting standards (aka “IFRS”). CKI and its duly authorized representatives shall have the right, upon reasonable prior written notice from CKI and during normal business hours, once in respect of each Annual Period and for up to [***] after such Annual Period, to examine and copy said books and records and all other documents and materials in the possession of and under the control of the Licensee with respect to all transactions and/or obligations arising out of or relating to this Agreement. The exercise by CKI of any right to audit at any time or times or the acceptance by CKI of any statement or payment shall be without prejudice to any of CKI’s rights or remedies and shall not bar CKI from thereafter disputing the accuracy of any payment or statement, and the Licensee shall remain fully liable for any balance due under this Agreement. The Licensed Products shall be assigned style numbers unique from any other products the Licensee may manufacture or sell. The style number assigned to each Licensed Product shall be identical to the style number utilized to identify the Licensed Product in all of the Licensee’s books and records. All documents evidencing the sale of Licensed Products shall state the style number of each such Product. The Licensee shall not use terms such as “assorted” or “irregular” without a style specification with respect to the Licensed Products.

4.4Underpayments. If, upon any examination of the Licensee’s books and records pursuant to § 4.3, CKI shall discover any royalty underpayment by the Licensee, the Licensee will make all payments required to be made to correct and eliminate such underpayment within ten (10) days of CKI’s demand together with interest thereon. In addition, if said examination reveals a royalty underpayment of [***] or more for any Annual Period, the Licensee will reimburse CKI for the reasonable out-of-pocket cost of said examination within ten (10) days of CKI’s demand. If said examination reveals a

royalty overpayment, CKI will in its discretion either credit such amounts or remit such amounts to correct and eliminate such overpayment.

4.5Manner of Payment. All payments required by the Licensee hereunder shall be made to CKI in US $ dollars via wire transfer specifying federal funds [***], with phone or email confirmation to the CKI Licensing Finance Department (telephone: [***]; facsimile: [***].

All references to dollars shall mean US $ dollars. The Percentage Royalties based upon Net Sales made in a currency other than US $ dollars (and certain other amounts provided for or contemplated under this Agreement), if applicable, shall be computed on the basis of the conversion rate of the currency in which the sale or other transaction occurred into US $ dollars in effect, as published in the Wall Street Journal, as of the close of business on the last day of the applicable accounting period with respect to sales, and other applicable amounts, or such other conversion rate that is consistent with the applicable accounting principles referenced in Section 4.3, consistently applied. In the event that the Licensee is required to withhold certain amounts for payment to the appropriate governmental authorities (which should not/may apply under this Agreement), the Licensee will supply to CKI the official receipts evidencing payment therefor (as noted in §4.8).

4.6Interest on Late Payment. In addition to any other remedy available to CKI, if any payment due under this Agreement is delayed for any reason, including, without limitation, as a result of any royalty underpayment, interest shall accrue and be payable, to the extent legally enforceable, on such unpaid principal amounts from and after the date five (5) days after the date on which the same became due, at a rate equal to [***] (or the highest rate permitted by law in New York, if lower).

4.7No Set-Off. The obligation of the Licensee to pay royalties hereunder shall be absolute, notwithstanding any claim which the Licensee may assert against CKI. The Licensee shall not have the right to set-off, compensate or make any deduction from such royalty payments for any reason whatsoever.

4.8Taxes. The Licensee will bear all taxes, duties and other governmental charges in the Territory relating to or arising under this Agreement, including, without limitation, any state or federal income taxes (except withholding taxes on royalties and taxes on CKI’s income), any stamp or documentary taxes or duties, turnover, sales or use taxes, value added taxes, excise taxes, customs or exchange control duties or any other charges relating to or on any royalty payable by the Licensee to CKI. The Licensee shall obtain, at its own cost and expense, all licenses, Federal Reserve Bank, commercial bank or other bank approvals, and any other documentation necessary for the importation of materials and Products and the transmission of royalties and all other payments relevant to the Licensee’s performance under this Agreement. If any tax or withholding is imposed on royalties, that is, and to the extent it may become applicable, and always subject to CKI’s prior written approval in each instance, when or where payments of Guaranteed Minimum Royalties and/or Percentage Royalties are made directly to CKI from any jurisdiction outside the United States, the Licensee shall compute and pay on behalf of CKI all withholding taxes which any governmental authority in the Territory may impose on CKI with respect to the Royalties paid by the Licensee to CKI. The amount of such taxes shall be appropriately deducted from payments, and immediately paid to such governmental authorities. The Licensee shall obtain and provide certified proof of the tax payment of the amount withheld, and immediately transmit it to CKI with (or within seven (7) days after) the quarterly accounting statement. In the event such taxes are not paid when due, all resulting penalties and interest shall be borne by the Licensee.

4.9Financial Statements/Retail Sell-Through. Licensee shall deliver to CKI:

(i) within 30 days after the close of the regular shipping season of each seasonal Collection, its sales results (reflecting goods actually shipped), by style, on a unit basis, of Licensed Products shown and sold for such seasonal Collection; and within 90 days following the close of the regular shipping season a report setting forth the sell-through by Licensee’s retail customers of Licensed Products shipped to them, to the extent such sell-through information is reasonably available;

(ii) within 90 days after the close of each Annual Period, a letter from Licensee’s Chief Financial Officer, confirming that Licensee is not in default under any of the financial covenants referenced in §8.3(n);

(iii) within 90 days after the close of each of Licensee’s fiscal year’s during or concurrent with an Annual Period, copies of its annual financial reports (balance sheets, statements of income and cash flow) which may be unaudited (but if the Licensee otherwise prepares or is otherwise required to prepare, audited reports, it will so provide them to CKI) prepared in accordance with “US GAAP”, reported on by a recognized accounting firm, with such balance sheet demonstrating compliance with the

financial covenants referenced in §8.3(n); provided that such annual financial statements shall be deemed to have been delivered if they are included in an annual report on Form 10-K filed with the Securities and Exchange Commission; and

(iv) within 45 days after the close of each calendar quarter copies of its quarterly financial reports, which will be prepared on a basis consistent with the annual financial reports, and which shall demonstrate compliance with the financial covenants referenced in §8.3(n); provided that such quarterly financial statements shall be deemed to have been delivered if they are included in a quarterly report on Form 10-Q filed with the Securities and Exchange Commission.

ARTICLE V. ADVERTISING AND PROMOTION

5.1Advertising.

5.1.1Deliberately Omitted.

5.1.2Advertising Obligation. For each Annual Period, the Licensee shall remit to CKI an amount (the “Advertising Obligation” or “Minimum Advertising Expenditure,” a/k/a “MAE”) equal to [***] of the actual Net Sales (excluding sales to CKI and its store licensees (which shall include CKI’s distributor’s which have free-standing store rights for sales therein) for such Annual Period; provided, however, that in no event shall the Advertising Obligation be less than the amount set forth below for such Annual Period.

Annual Period/Year	Minimum Advertising Expenditure or MAE
1(2022)	[***]
2(2023)	[***]
3(2024)	[***]
4(2025)	[***]
5(2026)	[***]
6 et seq. (2027) et seq.	[***]

The Licensee shall pay to CKI in respect of the Advertising Obligation for each Annual Period, no later than 1 January and 1 July of such Annual Period, an amount equal to one half of the specified amount set forth in the table above for such Annual Period (the “Initial Payments”), (as to those due 1 January, based on estimates with adjustments if any payable when the prior Annual Period’s actual reports are received). If [***] of the Licensee’s actual Net Sales during the first six months of an Annual Period is greater than the Initial Payment with respect to such semi-annual period, then, not later than August 15 of such Annual Period, the Licensee shall pay to CKI an amount (the “June True-Up”) equal to the difference between [***] of the Licensee’s actual Net Sales during such semi-annual period and the amount of such Initial Payment. If the aggregate amount of the Initial Payments and June True-Up paid with respect to a completed Annual Period is less than [***] of the Licensee’s actual Net Sales for such Annual Period, then, not later than February 15 immediately following such Annual Period, the Licensee shall pay to CKI an amount equal to the difference between [***] of the Licensee’s actual Net Sales during such Annual Period and the amount previously so paid as to such Annual Period (such difference being deemed an “Advertising Shortfall”). The Advertising Shortfall shall be paid during, and added to, the Advertising Obligation for the subsequent Annual Period. If the aggregate amount of the Initial Payments and June True-Up paid with respect to a completed Annual Period exceeds the greater of (x) [***] of Net Sales for such Annual Period and (y) [***] of Net Sales for the immediately preceding Annual Period (e.g. due to actual Net Sales for the second half of the year being less than estimated Net Sales), then such excess shall be credited against the Advertising Obligation for the immediately subsequent Annual Period (or if such actual payments exceeds the required amounts during the final Annual Period, credited to other amounts due CKI hereunder, or refunded to Licensee).

The Advertising Obligation shall be used by CKI exclusively for Licensed Products advertising media and Licensed Products non-advertising media (i.e. production assets). CKI shall not use the Advertising Obligation in connection with its overall multi-line advertising, marketing and promotion (which includes digital advertising and promotion (e.g. via social media and consumer marketing) of any of Licensor’s brands, marks or products) unless the Licensed Products are prominently included in such multi-

line activities, in which case a proportionate share of the costs of such multi-line activities reflecting the relative prominence of the Licensed Products in comparison to the other product categories included in such activities may be charged or billed by CKI as determined by CKI in good faith and its reasonable discretion.

Prior to the start of each Annual Period, Licensee shall present CKI with a proposed marketing plan for such Annual Period delineating the proposed expenditures using the projected marketing funds, including those as applicable to be remitted to CKI. CKI shall consider in good faith such plan and review, revise and respond with a CKI plan, and the parties shall thereupon agree upon the final plan, with CKI having final approval acting reasonably and in good faith. No Co-Operative Collateral, merchandising sales tools, fixtures or other costs or expenses compatible thereto shall be considered qualified MAE expenditure hereunder.

5.1.3CRK Fee. As the advertising agency heretofore responsible for advertising campaigns relating to “Calvin Klein”, “CK/Calvin Klein” and Licensed Mark activities, CRK Advertising now known as Consumer Marketing Organization (hereinafter “CRK”), a division of CKI, has developed certain expertise regarding the image of the Licensed Mark. CKI shall utilize CRK for the promotion of, and to develop and place advertising (including social media advertising) for, the Licensed Products as well as other marks and products unless otherwise agreed by CKI in its reasonable discretion (for example, in the case of influencer campaigns maintained by Licensee); provided that CRK review and approval shall not be required in the case of line sheet imagery and soldier shots developed by Licensee, so long as Licensee prepares soldier shots in (models wrist wearing Licensed Products or just shot of Licensed Product item) accordance with CKI’s guidelines (to be provided by CRK) with duplicate images provided to CKI free of charge for its use (e.g. CK Calvin Klein websites, and other multi-product promotion). However, all influencer campaigns shall be developed through CRK shall be subject to overall CRK development, CKI guidelines, and CRK Fee, if and as applicable. CKI shall have the right to develop, approve and determine placement and otherwise have control over all aspects of such promotion and advertising while adhering to the above referenced marketing plan. As compensation for CRK’s institutional advertising activities under this § 5.1.3, the Licensee shall pay to CRK an advertising agency fee (the “CRK Fee”) equal to the greater of [***] of: (i) the Advertising Obligation and (ii) the Licensee’s actual institutional advertising expenditures on Licensed Products, if more than the Advertising Obligation. The CRK Fee for this institutional advertising shall be credited toward the Advertising Obligation. Notwithstanding anything to the contrary in the foregoing, in no event shall CKI require the Licensee to pay to CKI in any Annual Period, as the Advertising Obligation for such Annual Period (including the amount of the CRK Fee for such Annual Period), an amount greater than the greater of (a) [***] of the Licensee’s Net Sales for such Annual Period and (b) the specific dollar amount of the Minimum Advertising Obligation for such Annual Period, as set forth in the above table, unless the Licensee agrees otherwise. Other than those incurred in relation to advertising shoots, included within the cost thereof and credited towards the MAE (e.g. per diem costs and expenses of “stylist” or “creative director” at a “shoot”) and/or otherwise the reasonable agreed-upon-in-advance travel, room and board, and similar out-of-pocket expenses of CRK and its personnel (if applicable or if any) are in addition to, and shall not be applied towards, or credited to, the Advertising Obligation. In addition, the Licensee shall also pay CRK Fees, at the rate of [***] of the amount spent by CRK for other services and materials (such as collateral, such as in-store, point-of-sale materials, “look books”, press kits, packaging) requested by the Licensee or, provided to the Licensee hereunder, pursuant to §1.6.4 or otherwise, and shall reimburse CRK for its expenses and out-of-pocket costs associated with its provision of such other services and materials as requested by Licensee (which are not applied towards, or credited to, the Advertising Obligation). However, other than for MAE amounts, no CRK fee will be payable for CRK approvals (as provided in §5.5) without any work or services being provided and without any modifications or substantive revisions, made on behalf of CKI. For the avoidance of doubt, if the underlying marketing expenditure is covered by and creditable against the [***] MAE then the related CRK Fee shall likewise be creditable to the MAE.

5.1.4Co-op Advertising. The Licensee shall spend for Co-operative Advertising including Shop-in-Shops, fixturing and other comparable qualified advertising during each Annual Period at levels no less than [***] of the Net Sales (excluding sales to CKI and its store licensees which may include CKI’s distributors which have free-standing store rights for sales therein) and not less than [***] during the 1^st Annual Period, during each such Annual Period. All Co-operative Advertising shall be (i) in accordance with the parameters reasonably promulgated by CKI from time to time, including, without limitation, creative as approved by CKI acting in good faith, as well as the Licensed Products presented in such Co-operative Advertising, and timing and applicable placement (the publication as well as the particular location within the publication) (sometimes referred to as a “media plan”), and (ii) subject to CKI’s prior approval acting reasonably and to be promptly exercised. CKI may provide approval of material or materials to be applied by Licensee generally without the need for case by case application approval except that any such material shall follow CKI usage guidelines (provided by CRK) and resubmitted for approval from time to time (e.g. every [***]) materials shall be reexamined by CKI every [***]. The Licensee shall be

obligated to notify its accounts of these requirements and ensure their compliance with such requirements. The Licensee shall provide CKI with its planned Co-operative Advertising program in advance of each season. For purposes of this Agreement “Co-operative Advertising” means (i) fixturing (including for shop-in-shops, displays, duratrans, and other point of sales fixturing), (ii) advertisements by or in connection with retail accounts (including Licensee Affiliates that operate as retail accounts), such as OOH, in-mall and advertisements in local newspapers and certain approved retail catalogs (catalogs of Approved Accounts consisting of full-price regular retail outlets such as [***], as well as others, if any, which CKI may specifically approve in writing after viewing the same), and applicable “sharing” of expenses by such retail account with the Licensee, by way of advertising reimbursements, credits, charge-backs, or payments, and (iii) the presentation of Licensed Products to retail account sales staff, (iv) live events intended to direct traffic towards Licensee’s retail accounts and purchases of Licensed Products (v) digital and programmatic advertising intended to direct traffic toward Licensee’s retail accounts, including (i) retargeting (e.g. [***]), (ii) review services (e.g. [***]), (iii) sponsored products (e.g. [***]), (iv) affiliates (e.g. [***]), (v) paid search (search engine magnification), (vi) A+ detailed pages/web collage, incurred by Licensee in connection with E-Commerce product imagery and presentation of products by retail accounts. For the avoidance of doubt, graphic design costs or expenses are not included in Digital Advertising. Expenditures for “co-op advertising” which are not in compliance with CKI’s parameters or within the definition of Co-operative Advertising shall not be deemed a qualified expenditure for Co-operative Advertising hereunder. Except as expressly set forth above, “Co-operative Advertising” as set forth above does not include and shall not consist of advertisements in trade publications or any expenses or costs of (without limitation) packaging, or advertising or selling materials of Licensee’s sales or merchandising teams including but not limited to “look books” or “tools,” in-store merchandising contributions or sharing of expenses, product detail photography (“PDP”), or any other selling or merchandising expenses or events, or any promotional materials, events or activities, such as press kits, goody bags (gifts), general influencer arrangement parameters (e.g. “reposting” use by Licensee and CKI and of other CKI’s licensees) or any consumer advertising. In the event Licensee underspends, and thus fails to spend the required amounts hereunder for a given Annual Period, Licensee will be obligated to spend the underspend (or shortfall) during the first [***] of the immediately subsequent Annual Period (in addition to and in excess of that amount required to be spent during such Annual Period). If such underspend is not so spent by Licensee, then Licensee will be deemed to have breached this Agreement and shall be obligated to remit the amount (or net amount) of the underspend (or shortfall), to CKI, not later than [***] of such immediately subsequent Annual Period. CKI may, in its sole and absolute discretion, use or spend such amount on advertising, marketing, and/or promotion of any of the Calvin Klein brands, marks or merchandise. Any remittance to CKI of any underspend (or shortfall) shall not be deemed a cure of the breach, but as an additional remedy available to CKI.

5.1.5Sole and Absolute Contribution. For each Annual Period beginning with the second Annual Period (2023), Licensee shall remit to CKI an amount (the “Sole and Absolute Contribution”) equal to [***] of the actual Net Sales (excluding sales to CKI, and its store licensees which may include CKI’s distributors which have free-standing store rights for sales therein) for such Annual Period; provided, however, that in no event shall the Sole and Absolute Contribution be less than the dollar amount set forth below for such Annual Period.

Annual Period/Year	Minimum Sole and Absolute Contribution
1 (2022)	[***]
2 (2023)	[***]
3 (2024)	[***]
4 (2025)	[***]
5 (2026)	[***]
6 et seq. (2027) et seq.	[***]

The Licensee shall pay to CKI in respect of the Sole and Absolute Contribution for each Annual Period, no later than 1 January and 1 July of such Annual Period, an amount equal to one half of the specified amount set forth in the table above for such Annual Period (the “Initial S&A Payments”), as to those due 1 January, based on estimates with adjustments if any payable when the prior Annual Period’s actual reports are received). If [***] of the Licensee’s actual Net Sales during the first six months of an Annual Period is greater than the Initial S&A Payment with respect to such semi-annual period, then, not later than 30 July of such Annual Period, the Licensee shall pay to CKI an amount (the “June S&A True-Up”) equal to the difference between [***] of the Licensee’s actual Net Sales during such semi-annual period and the amount of such Initial S&A Payment. If the aggregate amount of the Initial S&A Payments and June S&A True-Up (if any) paid with respect to a completed Annual Period is less than [***] of the Licensee’s actual Net Sales for such Annual Period, then, not later than 30 January immediately following such

Annual Period, the Licensee shall pay to CKI an amount equal to the difference between [***] of the Licensee’s actual Net Sales during such Annual Period and the amount previously so paid as to such Annual Period (such difference being deemed a “Sole and Absolute Contribution Shortfall”). The Sole and Absolute Contribution Shortfall shall be paid during, and added to but not credited against, the Sole and Absolute Contribution for the subsequent Annual Period. If the aggregate amount of the Initial S&A Payments and June S&A True-Up (if any) paid with respect to a completed Annual Period exceeds the greater of (x) [***] of Net Sales for such Annual Period and (y) [***] of Net Sales for the immediately preceding Annual Period, (e.g. due to actual Net Sales for the second half of such Annual Period being less than estimated Net Sales), then such excess shall be credited against the Sole and Absolute Contribution obligation for the immediately subsequent Annual Period (or if such actual payments exceed the required amounts during the final Annual Period, credited to other amounts due CKI, or refunded to Licensee). CKI shall use the Sole and Absolute Contribution, in its sole and absolute discretion, in connection with the advertising, marketing and promotion (which includes digital advertising and promotion e.g. via social media and consumer marketing) of the Licensed Marks, which may or may not include the Licensed Products.

5.2“Usage”. If the Licensee requests advertising support including, without limitation, the acquisition of rights to use images of models in jurisdictions within the Territory where rights have not been obtained or for uses for which authorization has not been granted, the Licensee shall pay over to CKI the reasonable incremental costs associated with such advertising support.

5.3Use of Advertising and Promotional Materials. The use and release of any and all advertising and/or promotional material, events, or activities (printed materials or otherwise including but not limited to “look books”) or social media activities (e.g. posts, influencer arrangements or other comparable activities or arrangements) or copy or interaction relating to the Licensed Products or the Licensee’s activities pursuant to this Agreement including in the nature of press releases, interviews or other similar public relations events, and any other corporate release, data or information which will or is likely to become public and, if so, could affect such image, will be prepared or conducted in consultation with, and subject to the prior approval of (or approval subject to CKI-required modifications of), CKI’s public relations department (not to be unreasonably withheld or delayed), or as to advertising and promotional events or activities, CRK (aka Global Marketing Organization) (not to be unreasonably withheld or delayed). After any such approval, the Licensee will not modify the approved material or activity or event in any material respect unless such modification is specifically approved by CKI’s public relations department or CRK.

5.4Runway Shows and Other Samples. The Licensee shall provide to CKI without charge, such reasonable quantity of Licensed Product as is determined and requested by CKI, sample lines comprising key styles, up to two (2) complete sets for each seasonal collection of Licensed Products, for use in fashion shows and for representative merchandising display of merchandise produced by CKI or other licensees of CKI and for use by CKI in the promotion of Licensed Products, including advertising shoots, public relations promotions, editorial promotions, press coverage and celebrity use, including where needed in advance of regular production cycles (e.g., fashion shows, merchandising displays within showrooms, advertising shoots). [***].

5.5CRK Approvals Not Involving Creation. For the sake of clarity, no CRK Fee is payable when CRK merely exercises CKI’s approval rights to approve creative assets developed by Licensee or by third parties on Licensee’s behalf but without any work or services or changes or modifications by CRK.

ARTICLE VI. QUALITY AND STANDARDS

6.1Distinctiveness and Quality of the Licensed Mark. The Licensee shall maintain the distinctiveness of the Licensed Mark and the image and high quality of the goods and merchandise bearing the Licensed Mark to be sold hereunder, so as to be at least commensurate with the repute, image and prestige of the Licensed Mark as prescribed and determined by CKI acting in good faith in its discretion reasonably exercised consistent with CKI’s historical past practice and procedures. The Licensee agrees that all Licensed Products manufactured or sold by it will be of high quality as to workmanship, fit, design and materials, and shall be at least equal in quality, workmanship, fit, design and material to the samples of Licensed Products submitted by the Licensee and approved by CKI hereunder. All Licensed Products shall be sold with a warranty of repair and/or replacement for two (2) years or longer consistent with Licensee’s standard warranty guarantee. Licensee shall maintain an inventory of spare parts for a duration of at least two (2) years but at least consistent with that of its other watch brands. All manufacturing and production shall be of a quality in keeping with the prestige of the Licensed Mark, and in strict

compliance with all legal requirements and all statutes, rules and regulations applicable in the Territory (and outside as may be applicable) including for example without limitation workplace, child and other labor laws and regulations, customs requirements and country of origin and regulations, and import and export requirements (including licensing requirements applicable thereto) and health and safety and environmental laws, regulations and requirements. In addition, the Licensee agrees that it will only use the Licensed Mark in the form thereof then approved by CKI, and that all Licensed Products shall bear the Licensed Mark in such approved form. CKI shall give the Licensee reasonable prior notice of any change in the form of the Licensed Mark and shall permit the Licensee to use a superseded form of the Licensed Mark for up to [***] in order to enable the Licensee to sell inventory, complete and sell work-in-process, and to deplete inventories of labels, tags, packaging, and other materials bearing the Licensed Mark. In the event CKI elects to change the form of the Licensed Mark, the Licensee’s obligations in respect to the image and high quality of the goods and merchandise bearing the Licensed Mark, and the prestigious marketing of same as required under this Agreement, shall be consistent with the actions of CKI and actions of its other licensees, as directed or authorized by CKI in respect to Licensed Products bearing such new form of the Licensed Mark. All Licensed Products will be developed, manufactured, shipped, sold, labeled, packaged, distributed and advertised in accordance with all applicable laws, statues and regulations.

6.1.1Consistency with Other Products. The Licensed Products hereunder are among a range of lines of men’s, women’s, boys’ and girls’ apparel and accessories and other products which are produced and/or sold by CKI, its licensees and other duly authorized parties under the Licensed Mark and other related trademarks. In order to provide for consistency in scope, and to prevent confusion in the market, the Licensee agrees to use commercially reasonable efforts to ensure that it will only use the Licensed Mark in the form thereof then approved by CKI (except as set forth in § 6.1 above) and that the placement of items constituting Licensed Products in the market will be consistent with placement of other merchandise bearing the Licensed Mark and be distinguishable from the placement of product lines bearing other trademarks.

6.2Design.

6.2.1Design. The parties will co-operate in connection with the development of each Collection of Articles for each line under the Licensed Mark hereunder as specified below and summarized in the attached Schedule 6.2.1. Approximately [***] before the anticipated launch of seasonal collections (under the Calvin Klein marks or family of goods), as indicated by Licensee), Licensor will provide to Licensee its “global brand seasonal design brief”, which will provide the general direction for the global lines for all such season(s). The “global brand seasonal design brief” will include creative concepts and fashion direction, which shall consist of, among other things, shapes, proportions, color direction, print(s) direction, techniques, and key elements, all of which Licensor deems appropriate for its various product lines which may include applicability to Articles.

6.2.2Development Schedule. Licensee will develop each seasonal Collection in accordance with the development schedule sent to Licensor annually, at least [***] in advance.

6.2.3Staff.Licensee will maintain during the term of this Agreement a design staff [***] capable of timely developing seasonal collections of Articles hereunder to exploit the License and to maintain the prestige and reputation of the Licensed Mark, all as required hereunder. Licensee’s design team [***]will have meetings, on an ongoing basis, with the Licensor-designated creative or design and/or merchandising person or persons, the purpose of which will be to discuss, and cooperate with Licensor, and enable Licensee to develop each seasonal collection efficiently and consistent with Licensor’s “global brand seasonal design brief”, so as to timely market, sell and ship the same.

6.2.4Global Brand Seasonal Design Brief. Based on the “global brand seasonal design brief”, Licensee shall create, develop and present for Licensor’s review and approval (or disapproval) in Licensor’s reasonable discretion in New York, a program in a tangible and/or digital illustrative format of the proposed designs for the Collection, which shall also include certain submissions by Licensee of samples of designs, styles, fabrications, trim, hardware or other components for inclusion in the seasonal collection in response to major account’s interest, or suggestions or anticipated trends (“Design Boards”). Licensee shall present “Design Boards” in a Presentation Meeting. The purpose of the Presentation Meeting is to provide Licensor with a clear and concrete understanding of the themes, fabrications, or swatches (for straps of watches, etc.), styles, and colors, of Licensee’s proposed designs, for the Collection. The same shall be submitted for Licensor’s consideration by Licensee, providing Design Boards and sketches, or scrap books as well as, where appropriate, samples of trim, fabrics, hardware and other components and elements in each of Licensee’s suggested colors and qualities, as well as swatches, yarns and illustrations sufficient to give Licensor a clear understanding of the particular Products and components Licensee wishes to develop.

6.2.5Certain Other Approval. Following approval by Licensor of the Design Boards, Licensee will provide and present to Licensor proposed styles, actual designs, component elements in sufficient size, fabrications or swatches (for straps of watches, etc.) in sufficient size as well as color, content and other matters, samples, labels (quality) trim, hardware, and other materials in quantities and sufficient variety (collectively, the “Designs”) to enable Licensor to review and approve (including to require modifications to or changes in), or disapprove in Licensor’s reasonable discretion on a timely basis, sufficiently in advance of the market and production timing. Presentations may be on an ongoing basis. Based upon Licensor’s direction and approval of all the foregoing, Licensee will timely produce pre-production prototypes for Licensor’s review and approval. Licensee may present any and all Designs to Licensor in digital format rather than tangible media to the extent reasonably practicable.

6.2.6Prototypes. At any time during the design process and development of a Collection, Licensee may request Licensor to review and consider approval of additional items or “Designs” to be added to the Collection. Both parties shall accord the other’s suggestions, good faith consideration. If additional “Designs” are approved by Licensor, Licensee shall use all reasonable commercial efforts to timely provide pre-production prototypes (which may be digital) to Licensor for its review and approval (or disapproval), and if approved, subject to time constraints and production capabilities, to include the Approved Designs in such Collection for which it was approved. Further, Licensee may request approval of products produced specifically for a full price account only, from time to time and on a case by case basis, CKI may approve in writing in advance limited styles, and units produced of such “special products”. All such (special products) shall be identified as such (e.g. “SP”) in all design submissions, line lists/line descriptives, and in reports and accountings by Licensee hereunder.

6.2.7CKI Review and Record. Prior to showing the season’s Collection of Articles to the trade or commencing production of the Articles for each seasonal collection, Licensee shall produce pre-production prototypes (which may be digital) of each in the approved fabrications which Licensee proposes to include in the season’s Collection, for Licensor’s approval, to be exercised promptly and in good faith. Presentation of such prototypes may be on an ongoing basis. No previously approved Articles will be included in a subsequent seasonal Collection unless and only if presented for inclusion and approved by Licensor for that specific seasonal Collection of Articles. With respect to the prototypes, Licensor shall have the right to confirm conformity with the Approved Designs as well as to require changes to the prototypes of the Articles for purposes of quality control. (Prototypes which have been approved by Licensor, or those subject to changes being made by Licensee upon resubmission of corrected prototypes and subsequent approval by Licensor, shall hereinafter be referred to as “Approved Prototypes.”) For clarification purposes, it is understood that Licensee shall not be required to provide Licensor with prototypes in each color and each fabric or swatch (for example, leather type), but only in each style (including in a particular fabrication, when requested by Licensor).

6.2.8Final Approval and Sales. The final composition of the entire seasonal Collection of Articles for each line shall be determined and agreed upon by Licensee and Licensor acting reasonably upon presentation and edit of the sample line produced (digitally or in tangible form) from Approved Prototypes. Licensor and Licensee shall cooperate in the line edit. As to any Designs or Approved Prototypes that Licensor believes are not in alignment with the “global brand seasonal design brief”, or Approved Designs, Licensor and Licensee will seek to determine a mutually agreeable solution reasonably acceptable to Licensor (e.g. cancel production, limit production, or modify the production goods to the extent practicable). Licensee shall provide CKI with line descriptives prior to each market opening. [***].

6.2.9Timely Products. After the market period closes, Licensee shall (i) timely produce, sell, and ship the season’s Collection for each line of Articles based on the Approved Prototypes, and (ii) meet with Licensor’s “global marketing” staff and Licensor’s merchandising staff, to review the market and discuss the seasonal consumer marketing strategy, for the Articles, to determine key items and key stores for such seasonal collection of Articles.

6.2.10Use of Designs etc. Licensee may use only sketches, designs, colors, packaging, labels and other materials provided or approved by Licensor in connection with Articles.

6.2.11Design Response. Licensor shall respond to all submission requests for approval pursuant to this design procedure promptly following receipt of request and presentation of all required materials/information necessary for Licensor’s full consideration and clear understanding. Licensee shall provide Licensor within [***] after Licensor’s approval of the Designs with a photographic record of the Approved Designs in the form of duplicate “boards” or “scrap book”, or such other comparable method (which may be digital), reasonably acceptable to Licensor so that Licensor has a means to verify compliance, or alternatively Licensor may during the Presentation Meeting duplicate or photograph or otherwise memorialize (via notes etc.), a copy or duplicate of Licensee’s submitted “Designs”.

6.3Manufacture of Licensed Products by Third Parties. All contractors wherever located which the Licensee desires to use in connection with the manufacture of Licensed Products are subject to the prior written approval of CKI, which consent shall not be unreasonably withheld or delayed; provided, however, that CKI shall have [***] after its receipt of a written request from the Licensee to use a manufacturer or such longer period as is reasonable under the circumstances to approve or disapprove such manufacturer. In order to maintain CKI’s high standard of quality control and to insure that appropriate measures are taken against counterfeiting, the Licensee shall provide CKI with the following information: (i) name and address of each proposed manufacturer; (ii) type of Licensed Products to be manufactured; and (iii) any other relevant information. The Licensee shall obtain the signature of an authorized representative from each approved third-party manufacturer used by the Licensee on an agreement (a “Third-Party Manufacturing Agreement”), substantially in the form of Exhibit PVH-A [***]. The Licensee shall not use any contractor in connection with the production of Licensed Products that [***]. Licensee will not use or authorize the use of any contractor or supplier with which CKI would be prohibited from dealing with under any U.S. governmental law, statute, regulation, order or decree, including for example individuals or entities listed, described or proscribed as prohibited and restricted persons and entities, by the U.S. Departments of Treasury or State or Commerce, including but not limited to those entities and individuals listed on the U.S. Department of Treasury list of “specially designated nationals” or various lists of prohibited restricted persons and entities maintained by the U.S. Departments of State and Commerce (“Prohibited Entities or Individuals”). The Licensee acknowledges that it shall remain primarily liable and completely obligated under all of the provisions of this Agreement in respect of such contracting or assembly arrangements.

6.4Non-Conforming Products. In the event that any Licensed Products are, in the reasonable judgement (which shall include subjective aesthetic considerations and standards) of CKI, not being manufactured, distributed or sold with quality workmanship or in adherence to all details and characteristics furnished by CKI, CKI shall notify the Licensee thereof in writing (“CKI’s Quality Notice”), and the Licensee shall promptly change such Licensed Products then in inventory to conform thereto. If Licensed Products as changed do not thereafter strictly conform and such strict conformity cannot be obtained after one resubmission, such Licensed Products (the “Non-Conforming Products”) shall be disposed of in a way which shall not reduce the value of the Licensed Mark or detract from its reputation. The Licensee shall obtain the express prior written consent of CKI with respect to the terms, conditions and method of their disposal, which may include, without limitation, the destruction of the Non-Conforming Products, the donation of such Non-Conforming Products to eleemosynary institutions, the sale of such Non-Conforming Products in a private sale, with proceeds to be given to charity, or the removal of Labels and other identification prior to sale. CKI may require the Licensee to cease further shipment and sale of such Licensed Products, to recall any Licensed Products that are not substantially or substantively consistent with approved quality standards and/or to purchase at the Licensee’s expense any such substantially or substantively inconsistent Licensed Products found in the marketplace. [***].

6.5Approvals. All approvals by CKI required under this Agreement must be obtained in advance, of use of the item subject to approval in the case of items, or other action as may be applicable, which approval must be in writing (which may be by email) from CKI to the Licensee. Except as otherwise expressly provided hereunder, a submission for approval shall be deemed approved unless CKI delivers a notice of disapproval within [***] after its receipt of a written request for approval (together with the submission as well as all information, details and specifications reasonably necessary to review, determine and provide an approval). All matters related to design, creative or aesthetic matters hereunder requiring approval of CKI shall be granted or withheld in the [***] discretion of CKI exercised in good faith and may be based solely on CKI’s subjective aesthetic standards exercised in good faith. [***]. CKI has no obligation to approve, review or consider any item which does not strictly comply with the required submission procedures. Approval by CKI shall not be construed as a determination that the approved matter complies with all applicable regulations and laws, which is the sole responsibility of Licensee. No disapproved item shall be manufactured, sold, used, distributed or advertised by the Licensee under the Licensed Mark. The Licensee may revise any disapproved item and resubmit it. The Licensee must strictly comply with all of CKI’s decisions made in accordance herewith. CKI may amend the approval forms as appropriate.

6.6Marketing, Labeling, Packaging, Promotions, Business Materials. All templates for packaging, labeling, including within the Licensed Product including trim, components and hardware in each case containing a Licensed Mark or related logo (for example buttons, linings, logos affixed or embroidered and the like) (“Labels”) must be approved by CKI. The use of any Label that has not been approved is expressly prohibited. All Licensed Products manufactured, distributed or sold by, or on behalf of, the Licensee shall be marked, labeled, packaged, advertised, distributed and sold in accordance with this Agreement. At the request of CKI, the Licensee shall cause to be placed on (or attached to) all Licensed Products packaging (by way of labels, tags or inserts) an appropriate notice designating CKI as the “licensor” of the Licensed Mark, and/or CKTT as the owner of the Licensed Mark. The manner of presentation of such notice shall be determined by CKI acting reasonably. Any and all proposed advertising, promotional (including promotion via social media (e.g. influencer arrangements or agreements)), business (including stationary, business cards, invoices), marketing (including “look books”) or publicity material (including

issuing press releases, interviews or other public relations media) and any other printed material or other form of communications to be used in connection with the marketing, promotion, sale or distribution of the Licensed Mark must be approved by CKI acting reasonably (as to content, form and specific use, including timing and duration of use) prior to use by Licensee. As to social media usage, use shall wherever reasonably practicable (but without the need for Licensee to incur incremental expense) cover usage by Licensee as well as by CKI and other CKI licensees (e.g. reposting as to influencer posts). In the case of “look books,” a series of photographs illustrating items available for purchase, whether from a “fashion show” or otherwise, for each seasonal Collection of Licensed Products will be produced by CKI (using CRK), the costs of which shall be borne by the Licensee as part of the Advertising Obligation. “Look Books” may also be used as POP or POS materials, or for other promotional activities only if and as approved by CKI, (but expense thereof is not considered a qualified Advertising or Public Relations or Co-Operative Advertising expenditure). If CKI should in its reasonable discretion disapprove any sample tag, label, package or the like, or any advertising, promotional, merchandising, marketing or publicity material, activity or event or the proposed placement or use thereof or any other printed matter, event or activity, Licensee will not use or permit the use of the same in the manner disapproved by CKI, whether or not in connection with Licensed Products or the Licensed Mark.

6.7Inspection of Facilities. Licensee shall use all commercially reasonable efforts to enable CKI and its duly authorized representatives, during normal business hours and upon reasonable notice, to inspect all facilities utilized by the Licensee (and its contractors and suppliers to the extent the Licensee may do so) in connection with the manufacture, sale, storage or distribution of Licensed Products, and to examine the Licensed Products in the process of manufacture.

6.8Samples and Artwork. CKI may make available to the Licensee certain samples, designs, colors, fabric samples, tags, labels, packaging, catalogues and artwork already available to CKI,(that is developed for predecessor or other licensees for example), and the cost of providing such materials for use by Licensee shall be borne by the Licensee at CKI’s cost, but not to exceed [***] per annum without the Licensee’s prior consent, the payment for which shall be separate and apart from the payment of any CRK Fee for the development of such samples, designs, colors, fabric samples, tags, labels, packaging, catalogues and artwork. All right, title and interest in and to samples, sketches, designs, and other materials furnished to the Licensee or submitted by CKI in connection with the Licensed Products, including any modifications or improvements thereof which may be created by CKI, shall remain the sole property of CKI as between the Licensee and CKI, and are “licensed” hereunder solely and exclusively for use in connection with the manufacture, sale, distribution and promotion of Licensed Products in the Territory.

6.9Know-how. The Licensee shall have the right to request visits to CKI’s offices or showrooms to meet with its personnel, in order to obtain additional know-how and assistance, all as and only as CKI deems appropriate. The scheduling of such visits shall be at times mutually convenient to the parties hereto. In connection with such visits, the Licensee shall bear all expenses of the Licensee’s representatives.

6.10Meetings. CKI may from time to time hold meetings of CKI’s licensees. The Licensee shall, upon receipt of reasonable notice, attend such meetings at its own expense but shall not be required to attend more than [***] per year.

6.11Design Direction. The designs of the Licensed Products shall at all times be consistent with CKI’s design aesthetic for the Licensed Mark. CKI may submit samples to the Licensee of or for products it deems to be core to the image of the overall “CALVIN KLEIN” trademarks and/or product lines, and the Licensee shall develop Licensed Products based thereon and shall use commercially reasonable efforts to market same.

6.12Design Rights. The Licensee acknowledges and agrees that CKI owns or shall own all design rights, regardless of whether such designs were created by CKI or by or on behalf of the Licensee, except with respect to Excluded Designs. The Licensee agrees to make, procure and execute all assignments necessary to vest ownership of design rights in CKI. The Licensee shall not do or allow to be done anything which may adversely affect any of CKI’s design rights. All designs used by the Licensee for the Licensed Products, except with respect to Excluded Designs, shall be used exclusively for the Licensed Products and may not be used under any other mark, whether during the License Period or any time thereafter, without the prior written consent of CKI. “Excluded Design” means a design submitted by the Licensee and (i) not approved by CKI; or (ii) approved by CKI but not distinguishable from similar generic products generally available in the marketplace; or (iii) approved by CKI but not distinguishable from a product which has previously appeared, or is to substantially simultaneously appear, in the Licensee’s product line and the Licensee advised CKI of such condition in writing at the time of submission. In the event of clause (i) or (iii) above, the Licensee shall retain title (only if and to the extent Licensee had title prior to use under the Agreement) to such designs but shall permit CKI to use such designs in perpetuity. CKI may use and permit others to use said designs (other than Excluded Designs) and other materials in any manner it desires, provided that such use does not conflict with

any rights granted the Licensee hereunder. The Licensee specifically acknowledges that such designs (other than Excluded Designs) and other materials may be used by CKI and its Affiliates on Licensed Products in the Territory and on products other than Licensed Products anywhere in the world with respect to the merchandise and as to its reserved rights during the term, and thereafter without reservation. Notwithstanding the foregoing, CKI shall not acquire any ownership interests in any patents owned by Licensee and utilized for multiple generic or other products (other than Licensed Products), but utilized as well in connection with the Licensed Products. No copyrightable/patentable designs of licensed products developed or sold under Predecessor Licensee’s license may be reproduced unless Licensee negotiates (at its expense) the purchase of such Designs from Predecessor Licensee.

6.13Shops, Stores, Retail Outlets. Subject to § 6.14, the Licensed Products sold on a wholesale basis by the Licensee may be sold only to those specialty shops, department store and retail outlets which meet both of the following criteria: (a) carry high quality and prestige merchandise and whose location, merchandising and overall operations are consistent with the high quality of the Licensed Products and the reputation, image and prestige of the Licensed Mark, for sale thereby to consumers only; and (b) sell at least [***] of the following brands in CKI’s “competitive set” for Licensed Products: [***]. Such accounts which meet the foregoing and are approved by CKI from time to time are collectively referred to as “Approved Accounts”. CKI may approve e-tailer accounts and/or e-commerce arms of brick and mortar accounts on an individual, case by case basis. All such retail outlets are subject to CKI’s written approval (with all due consideration given to CKI’s subjective aesthetic concerns and judgement and the quality, value and prestige, as CKI in its reasonable discretion deems appropriate, of the Licensed Marks) on an ongoing basis based upon passage of time and changes in circumstances, policies, and/or procedures whether of CKI or of such retail outlet, or of any account under this Agreement. No [***] is or will be an approved retail outlet, (e.g. [***]). CKI may at any time subject sales to any Approved Account, to any conditions or limitations CKI considers appropriate in its reasonable discretion; provided, however, that in order to be effective, any such conditions or limitations must be set forth in a writing provided to the Licensee. As noted, CKI reserves the right to review/approve or disapprove, all accounts (including disapproval of previously approved accounts) on an on-going basis. Such approval to be reasonably exercised by CKI in good faith based on CKI’s subjective aesthetic judgement. CKI may withdraw its approval of any Approved Account, including, without limitation, any Approved Account listed on Schedule 6.13 upon reasonable prior written notice to the Licensee (at which time, such customer shall cease to be an Approved Account for purposes of this Agreement); provided, however, that the Licensee may fulfill any firm orders entered into prior to the Licensee’s receipt of CKI’s withdrawal of approval. The Licensee shall not (i) sell or distribute any Licensed Products to wholesalers, (except to CKI approved or permitted distributors of Licensee) or to any jobbers, or diverters; (ii) use the Licensed Products as giveaways, prizes or premiums, except for promotional programs which have received the prior written approval of CKI; or (iii) sell Licensed Products to any third party that Licensee knows, or should know, intends to resell the Licensed Products to any prohibited party hereunder (including prohibited entities).

6.14Disposal of Seconds and Close-Outs. Seconds and Close-Outs sold by the Licensee may be sold only to Approved Accounts and Approved Seconds and Close-Outs Accounts, including those customers identified on Schedule 6.14. Whenever the Licensee shall wish to sell Seconds and Close-Outs to customers not previously approved by CKI, the Licensee shall submit to CKI a written list of the proposed customers for Seconds and Close-Outs for CKI’s prior written approval. The proposed customers approved from such list, together with the customers listed on Schedule 6.14, are referred to as the “Approved Seconds and Close-Outs Accounts.” Sales to Off-price e-commerce e-tailers and e-commerce arms of any Off-Price Channel Account are not permitted without CKI’s prior written approval in writing. Notwithstanding CKI’s approval of any customer, CKI may at any time subject sales to any such customer, including, without limitation, any such customer listed on Schedule 6.14, to any conditions or limitations CKI considers appropriate in its reasonable discretion; provided, however, that in order to be effective, any such conditions or limitations must be set forth in a writing provided to the Licensee. Nothing herein shall be deemed to prohibit CKI from withdrawing its approval of any Approved Seconds and Close-Outs Account, including, without limitation, any such Approved Seconds and Close-Outs Account listed on Schedule 6.14, or of any other account under this Agreement upon reasonable advance written notice to the Licensee (at which time, such customer shall cease to be an Approved Seconds and Close-Outs Account for purposes of this Agreement); provided, however, that the Licensee may fulfill any firm orders entered into prior to the Licensee’s receipt of CKI’s withdrawal of approval.

6.14.1Seconds. The Licensee shall only sell Licensed Products which are damaged, imperfect, non-first quality or defective goods (“Seconds”) in a way which shall not reduce the value of the Licensed Mark or detract from its reputation and shall obtain the express prior written consent of CKI with respect to the terms and method of their disposal. All Seconds approved for sale by CKI shall be clearly marked “Seconds” or “Irregular.” The percentage of Seconds of any of the Licensed Products which may be disposed of in any Annual Period shall not, in any event, exceed [***] of the total number of units of Licensed Products distributed or sold by the Licensee for such Annual Period.

6.14.2Close-Outs. All first quality Licensed Products which constitute discontinued styles no longer in production by Licensee hereunder, or are sold at a price which is at least [***] off the initial regular wholesale price and to be sold and shipped following the regular shipping season for such seasonal collection (“Close-Outs”), shall be sold upon such terms and conditions as the Licensee, in its reasonable discretion, determines appropriate and shall not be sold to any person which the Licensee knows, or has reason to know, will sell to anyone which is not an Approved Account. The percentage of Close-Outs of any of the Licensed Products which may be disposed of in any Annual Period shall not, in any event, exceed [***] of the total number of units of Licensed Products distributed or sold by the Licensee for such Annual Period. The Licensee acknowledges and agrees that so called “make-ups”, or “cut-ups” or “special product” are not permitted to be produced as to Licensed Products for sale to any OP Account hereunder. Discontinued styles which are no longer in production, with styles that are at least [***] old (from date of first shipment) are subject to CKI’s review and approval before resumption of production including as to which accounts such reinstated styles are to be sold (e.g. for sales to OP Accounts only), and are considered Close-Outs under this Agreement.

6.14.3Off-Price Channel Cap (aka “OP A/C Cap”). Notwithstanding the foregoing provisions of this § 6.14, in no event shall sales of Seconds and Closeouts to CKI approved Off-Price Channel Accounts exceed:

[***]

in each case in any Annual Period (“Off-Price Channel Cap”).

If the Off-Price Channel Cap is exceeded in any Region, in any Annual Period, then it is a material breach of the Agreement and as an additional remedy (and not as an election of remedies), Licensee shall pay CKI an additional “Penalty Percentage Fee” on such excess Net Sales of plus [***], and in each successive Annual Period, if such Off-Price Channel Cap is exceeded (e.g. if exceeded in 2022, plus [***]; if exceeded in 2022 and 2023, plus [***] in 2023; etc.). If in any subsequent Annual Period, Licensee’s sales to such Off-Price Accounts do not exceed the Off-Price Channel Cap, the penalty will reset (e.g. if exceeded in 2022, 2023, and 2025, plus [***] in 2022; plus [***] in 2023, not exceeded in 2024 so no penalty and resets; plus [***] in 2025). No MGF’s will be credited to any payments of Penalty Percentage Fees.

6.15Standards of Conduct.

6.15.1Standards. The Licensee acknowledges that CKI is a wholly owned subsidiary of PVH Corp. (“PVH”). The Licensee acknowledges that it has received copies of, read and understands PVH’s publication “A Shared Commitment – Requirements for Suppliers, Contractors, Business Partners” and PVH’s “Statement of Corporate Responsibility” (attached as Exhibit 6.15.1). The Licensee shall conduct its business in compliance with the moral, ethical and legal standards set forth in such publications, as the same may from time to time be revised by PVH upon reasonable notice to the Licensee (as well as other CKI licensees) (and guidelines and standard operating procedures as promulgated to other CKI licensees and other parties by PVH upon reasonable notice to the Licensee) (the “Standards”) and shall cause all manufacturers and contractors which manufacture Licensed Products (or if at all applicable to goods permitted and approved by CKI to be produced, and gifted as GWP’s under this Agreement, both as to the suppliers thereof and the facilities producing such goods if any “GWP’s) or from whom the Licensee obtains Licensed Products or GWP’s or materials for the manufacture of Licensed Products or GWP’s to abide by the Standards, provided that nothing in this §6.15 shall apply to unaffiliated suppliers or facilities which supply less than [***] of completed Licensed Products (whether determined by costs, value, or selling price). Licensee will meet with PVH’s personnel promptly following execution (in person or via video conference) in order to review, understand and diligently pursue procedures and requirements under this §6.15. Thereafter, from time to time at PVH’s (or CKI’s) request, Licensee will meet or have a conference call with PVH to discuss the Standards, and the status of Licensee’s compliance with the Standards and other obligations under this §6.15 including without limitation any corrective actions Licensee is taking to bring Licensee into compliance if applicable. Furthermore, Licensee will use commercially reasonable best efforts to ensure that all such manufacturers and contractors and if and as applicable, distributors or other authorized sublicensees, abide by PVH’s confidentiality and security policies and procedures for CKI’s (and PVH’s) data as referenced in §11.18, and to evidence the same, on reasonable request of CKI (or PVH).

6.15.2Audit Requirement. Prior to producing Licensed Products in a facility (whether directly produced or produced by or through a contractor, subcontractor or supplier) the Licensee will arrange to have the facility audited for compliance with the Standards unless PVH notifies the Licensee in writing that it already has a current audit with respect to such facility that evidences compliance with the Standards. Audits on each facility used must thereafter be conducted no less often than [***], or more often at PVH’s reasonable request depending on results of most recent audit (e.g., if problems are

found). Each audit shall be conducted by a suitable independent third-party auditor designated by the Licensee and approved by PVH and shall be conducted using the evaluation form attached hereto as Exhibit E or a substantively similar form approved by PVH. The Licensee shall identify to PVH in writing each facility in which it is proposed that any Licensed Product (or part thereof) be produced or which is to be re-audited and PVH shall notify the Licensee within [***] of PVH’s receipt of the notice if PVH has currently approved the facility for production and when re-audit is required. If a facility is currently approved for production, the Licensee shall have no obligation to arrange for a current audit of the facility. All audits shall be conducted at the Licensee’s sole expense.

CKI and its parent PVH has the right to require licensee to obtain similar audits and/or Higg Facilities Environmental Index self-assessment and verification, in alignment with any current or future PVH corporate responsibility program requirements, provided that PVH is conducting audits of similar types of entities and that such audits are commercially viable for Licensee to conduct, with respect to:

Priority 1: certain types of component suppliers (e.g., trim/fabric suppliers) and Level 2 suppliers (wet processing units, tanneries, embroidery units, molders, etc.),

Priority 2: key component suppliers (suppliers of materials that make up at least [***] of production OR suppliers that utilize resource intensive processes (energy/water)),

Priority 3: component suppliers who make components that bear the Trademark.

6.15.3Approval. A comprehensive audit report in a commercially standard format prepared by an independent third-party auditor shall be provided to PVH in respect of a given facility where Licensed Products are produced, attention the director of PVH’s Human Rights Program Department, promptly upon its completion. PVH shall have [***] from its receipt of an audit report to notify the Licensee of its disapproval of the facility that is the subject thereof. If PVH does not give notice to the Licensee within such [***] period, the facility shall be deemed approved by PVH. PVH shall set forth in its notice of disapproval its reason(s) for disapproval in reasonable detail, or whether the factory is approved and if so for how long such approval is noted.

6.15.4Use of Facility. Unless and until the Licensee delivers to PVH an audit report for a facility that evidences compliance with the Standards and PVH approves such facility, the facility shall not be used for the production of Licensed Products. If the Licensee uses a facility that has not been approved in accordance herewith, or fails timely to cause an approved auditor to submit to PVH an audit report evidencing continued compliance with the Standards when a re-audit of a facility is required in accordance with the terms hereof, then CKI or PVH may (i) hire an independent auditor of PVH’s choosing (to report to PVH) to conduct an independent assessment and (ii) [***]. CKI may with respect to such breach of this §6.15.4, if such breach [***], then CKI may terminate the License and all of the other rights granted to the Licensee under this Agreement pursuant to Section 8.3. If Licensee uses a facility for which an audit has revealed requirements for remediation in order to be compliant with the Standards, CKI or PVH may require that Licensee conduct and complete training of such facility or reimburse CKI or PVH in connection with PVH’s training of such facility, which may include without limitation, completion of e-learning modules or in person consulting conducted by third party service providers. Nothing in this § 6.15.4 shall be deemed to confer third-party beneficiary rights upon any person, corporation, partnership or other entity.

6.15.5No Fur Policy CKI maintains a “no fur” policy for its licensees (and their respective suppliers, vendors, contractors, sublicensees, distributors) as to Licensed Products and all components thereof (including but not limited to any trim or other embellishment of Licensed Products). Any failure to comply is a breach of this Agreement.

6.15.6Animal Welfare and Sustainable Materials CKI’s parent PVH aims to responsibly source materials of animal origin which are used to manufacture its products in a humane, ethical and sustainable manner. In support of this effort, Licensee shall abide by PVH’s policies related to the use of animal materials which are posted on its website at www.pvh.com/responsibility, as such may be updated from time to time and applicable generally to PVH licensees. PVH also aims to source raw materials of natural origin which are used to manufacture its Products in an ethical and sustainable manner. In accordance with PVH’s Standards and commitment to ensuring products are produced responsibly and ethically, Licensee shall abide by our policy on the use of sustainable materials such as organic/sustainable cotton and polyester and shall use sustainable materials where reasonably practicable in connection with the manufacture of any Licensed Products.

Where applicable, Licensee will submit the following material certifications to PVH Corporate Responsibility in lieu of audits for the following materials as may be updated from time to time:

a.Leather: Responsible Leather (Textile Exchange), British Leather Council

b.Wool: Responsible Wool Standard (Textile Exchange)

c.Down: Responsible Down Standard (Textile Exchange)

d.Cotton: Better Cotton Initiative, sustainable, organic, recycled cotton

6.15.7Additional Corporate Responsibility Opportunities Licensee shall notify PVH if Licensee wishes to participate in any of PVH’s corporate responsibility programs (e.g. women’s empowerment programs for supply chain workers and their communities (Personal Achievement and Career Enhancement or P.A.C.E. Program), low impact denim etc.) and PVH will determine Licensee’s eligibility for such programs based, in part, on Licensee’s corporate responsibility performance.

6.15.8CSR Co-operation Licensor and Licensee will use reasonable commercial efforts to align on additional human rights and environmental sustainability CSR principles governing the conduct of the business licensed hereunder. The mutual goal of the parties is to keep the companies at the forefront of “best in class” companies relating to the environment, social responsibilities and related obligations, consistent with Licensor and its parent PVH’s and their respect brands’ public commitments.

6.16Personnel. From and after [***] and throughout the duration of this agreement, Licensee shall maintain the following employees in connection with the performance of its obligations hereunder (subject to initial and ongoing periodic CKI approval reasonably exercised):

[***]

as well as other personnel (including, but not limited to, visual display and retail development) as may be needed to successfully exploit the business. Such personnel would include sales, merchandising, technical, product development and other production (to include a production person dedicated or designated as the point person to be responsible for activities and compliance with the provisions under §6.15 and to report to and coordinate with PVH on the same), visual display, quality control, retail development personnel and in-store co-coordinators. Furthermore, as to such [***] position, CKI may, on an ongoing basis, advise Licensee of any problems or difficulties, if any, it may be experiencing, and Licensee will use all reasonable efforts to address any such concerns to CKI’s reasonable satisfaction.

ARTICLE VII THE LICENSED MARK

7.1

Rights to the Licensed Mark.

7.1.1Ownership of Licensed Mark. The Licensee acknowledges as between the parties, that the Calvin Klein Trademark Trust (“CKTT”) is the owner, and CKI is the beneficial owner, of all right, title and interest in and to the Licensed Mark, and to any variant, modification or embodiment thereof, for Products in the Territory; and that CKTT and CKI also own the goodwill related to such marks and to the business and goods in relation to which such marks have been or will be used, however, do not own registrations for the Calvin Klein mark in Class 14 in all jurisdictions (worldwide), although do in among others [***]. The Licensee will not at any time directly or indirectly do or suffer to be done any act or thing that might be expected by CKI in its good faith judgement to, or may, adversely affect any rights of CKTT or CKI in and to any of such marks, any registrations thereof or any applications for registration thereof, or which might reduce the value thereof or detract from their reputation, image or prestige or that of CKTT, CKI or Mr. Calvin Klein. Sales by the Licensee shall be deemed to have been made by CKTT for purposes of trademark registration and all uses of the Licensed Mark by the Licensee and any and all goodwill generated by use of the Licensed Mark shall inure to the benefit of CKI and CKTT.

7.1.2No Adverse Actions. The Licensee shall not, at any time, do, or otherwise suffer to be done, any act or thing which Licensee knows, or should reasonably know, may adversely affect any rights of CKI or CKTT in and to the Licensed Mark or any registrations thereof or which, directly or indirectly, may reduce the value of the Licensed Mark or detract from its reputation. The Licensee shall not file or prosecute a trademark or service mark application or applications to register the Licensed Mark; nor shall Licensee file or prosecute an application for any trademark, name or other mark confusingly similar thereto in respect of the Licensed Products or any other goods or services. The Licensee shall not, during the term of the License Period or thereafter, (i) contest CKTT’s or CKI’s title, right, ownership or other interest in or to the Licensed Mark in any jurisdiction or attack the validity of the License or the Licensed Mark or (ii) contest the fact that the Licensee’s rights under this Agreement (a) are solely those of a manufacturer, licensee and, if appropriate, distributor; and (b) subject to the provisions of §8.5, cease upon termination of the License Period.

7.1.3Registrations. The Licensee acknowledges and agrees that CKTT, as the sole and exclusive owner of the Licensed Mark, has the exclusive right to apply for registrations and to extend appropriate registrations of the Licensed Mark for all categories of goods, including, without limitation, the Products. CKI, on behalf of CKTT, shall maintain at its expense and as determined by CKI consistent with its past practice the registrations for the currently existing Licensed Mark in the Territory with respect to Products. The Licensee agrees to cooperate with CKTT and/or CKI in the preparation, filing and prosecution of applications for registration, or extensions of existing registrations, or other documentation relative to the Licensed Mark.

7.1.4Survival. The provisions of this § 7.1 shall survive the termination of the License Period and this Agreement.

7.2Protecting the Licensed Mark. The Licensee shall cooperate fully and in good faith with CKI and CKTT for the purpose of securing, preserving and protecting CKTT’s and CKI’s rights in and to the Licensed Mark and any secondary trademark used in the marketing of the Licensed Products that the Licensee may develop and use with the approval of CKI. Any such secondary mark will be owned by CKTT. At the request of CKI, the Licensee shall execute and deliver to CKI any and all documents and do all other acts and things which CKI and/or CKTT deems necessary or appropriate to make fully effective or to implement the provisions of this Agreement relating to the ownership or registration of the Licensed Mark, including, without limitation, information regarding use and supporting documentation therefor, as well as labels, hang tags, packaging, and other appropriate specimens evidencing use of the Licensed Mark in each country in the Territory. Licensee acknowledges that CKI as a beneficial owner of the Licensed Mark, has a primary interest in and to Licensed Products and to other materials (tags, labels, and the like) which bear the Licensed Mark which is superior to any third party claims (for example contractors, creditors or the like) other than claims of holders of perfected security interests therein.

7.3Use of the Licensed Mark.

7.3.1Compliance with Legal Requirements. The Licensee will use the Licensed Mark (to include any and all actions and operations under this Agreement) in the Territory strictly in compliance with all legal requirements, and all statutes, rules and regulations as may be applicable. The Licensee shall duly display all other notices with respect to the Licensed Mark, on the Licensed Products and otherwise, as are or may be required by the trademark laws and

regulations applicable within the Territory. Upon expiration or termination of the License for any reason whatsoever, the Licensee will execute and deliver to CKI any and all documents reasonably required by CKI exercised in good faith, to reasonably evidence the same.

7.3.2Use with Other Name. The Licensee shall not (a) co-join any name or names with the Licensed Mark, (b) use the name “Calvin Klein” or “CK” or “CK/Calvin Klein” or any portion or derivative thereof in its corporate name, or (c) use any other name, or names in connection with the Licensed Mark, in any advertising, promotion, publicity, labeling, packaging or other printed matter of any kind in connection with the distribution or sale or advertising or promotion of Licensed Products except as may be approved in writing by CKI. Any use of the Licensee’s corporate name or that of its Affiliates in connection with the Licensed Mark will be subject to the approval of CKI, not to be unreasonably withheld or delayed. If CKI approves any use of the Licensed Mark in connection with the Licensee’s corporate name, the Licensee will clearly indicate that the Licensee is using the Licensed Mark pursuant to a license from CKI as may be required by CKI. The Licensee will use such trade name to designate the operations under this Agreement as is approved by CKI, and will file a fictitious name certificate (“d/b/a”) to reflect such use, as is reasonably approved by CKI).

7.3.3Execution of Documents. At CKI’s request, the Licensee will execute any and all documents (including registered user agreements) and take any actions required by CKI exercised in good faith to confirm CKTT’s ownership or CKI’s beneficial ownership of the marks referred to in §7.1.1 and the respective rights of CKTT, CKI and the Licensee pursuant to this Agreement.

7.3.4Registration. Notwithstanding anything herein to the contrary, the Licensee acknowledges that CKTT may not have, and CKI does not represent that CKTT has, active registrations of the Licensed Mark in every country in the Territory for the Products. If the Licensee requests that an application be filed in a jurisdiction outside those for which CKI has registrations for the Calvin Klein mark, and CKI agrees in its discretion (based on its standard practices and procedures), whether or not to do so. CKI may in its good faith discretion use reasonable efforts to obtain such registrations, but makes no representations regarding the same and retains the right to withdraw or abandon any such application, in its discretion.

7.4Ownership of Copyright. Any copyright which may be created in any sketch, design, print, Label or the like used with the Licensed Mark by the Licensee will be the property of CKI. The Licensee shall not, at any time, do, or otherwise suffer to be done, any act or thing which Licensee knows or reasonably should know may adversely affect any rights of CKI in such sketches, designs, prints, Labels and the like (“Copyrightable Designs”) and will, at CKI’s request, do all things reasonably required by CKI to preserve and protect said rights, except as to Copyrightable Designs [***].

7.5Infringements, Counterfeits and Parallel Imports.

7.5.1Infringements. In the event that Licensee learns of any infringement or imitation of the Licensed Mark with respect to Products which it believes could be considered a counterfeit of the Licensed Products, or of any use by any person of a trademark similar to the Licensed Mark with respect to Products which it believes could be considered a deliberate use of something substantially similar to the Licensed Mark, it will promptly notify CKI thereof. In no event, however, will Licensor be required to take any action or to bear any costs as to any such infringement or emulation. The Licensee will take no action, including, but not by way of limitation, settling any action, appealing any adverse decision or discontinuing any action taken by it, except to the extent the same is approved in advance by CKI. All costs and expenses incurred in any action or proceeding (including investigatory expenses and attorneys’ fees, if applicable, court costs and filing fees) will be borne as determined in §7.5.2. Any damages recovered or sums obtained in settlement in or with respect to any action shall (i) first be applied proportionately to reimburse CKI and the Licensee for the respective expenses incurred and actually paid by it and (ii) the balance, if any, shall belong and shall be paid over to [***]. In no event will any infringement by a third party justify the withholding of any payment of royalty or fee by the Licensee.

7.5.2Counterfeits and Parallel Imports.

7.5.2.1The Network. CKI currently maintains certain staff which maintains an enforcement network of attorneys, investigators and customs inspectors in the Territory (the “Network”) to minimize and deter (i) the diversion into and sale within and from the Territory if a Region is terminated as provided hereunder of products (including those which would correspond to Licensed Products) authorized for sale by its Affiliates and other licensees, which may include, without limitation, unauthorized distribution of such products by the manufacturers and subcontractors thereof or of Licensee (“Parallel Imports”) and (ii) the importation into, or sale or manufacture within as well as from, the Territory of counterfeit

Licensed Products or infringing Products; in each case subject to contributions from and reimbursement by various licensees (as well as other authorized users of the Licensed Mark and other marks of CKI and CKTT), and subject to applicable law. The Licensee acknowledges and agrees that CKI is under no obligation to take any action, or bear any costs or to maintain any such Network or other arrangement, and may curtail, modify, terminate or discontinue such Network in whole or in part at any time. For the time being, unless or until CKI otherwise determines and so advises the Licensee in CKI’s reasonable discretion, the Licensee will cooperate in such efforts as reasonably requested by CKI, and will bear and/or as applicable timely remit to CKI and/or, as applicable, promptly reimburse CKI for out-of-pocket expenses reasonably incurred by CKI in such efforts (including, without limitation, reasonable attorneys’ fees and expenses) as follows: [***]. Upon the Licensee’s request, CKI will meet with the Licensee to discuss CKI’s enforcement activities and the costs associated therewith.

7.5.2.2Diversion. The Licensee shall use all commercially reasonable efforts to minimize and deter the diversion of Licensed Products for sale, including, without limitation, the unauthorized distribution of Licensed Products by the Licensee’s manufacturers and subcontractors (“Diversion”). Such efforts shall include, without limitation, the utilization of such processes, controls, identification methods and reporting and auditing procedures as CKI may from time to time reasonably request. The Licensee shall cooperate with CKI in CKI’s efforts to minimize and deter Diversion (“Anti-Diversion Efforts”). Without limiting the foregoing the Licensee shall promptly (i) provide such information as CKI may from time to time reasonably request concerning its manufacturing, subcontracting and distribution locations, activities and shipments, product and label identification systems and data and sales to and, to the extent reasonably available, by its customers; and (ii) reimburse [***] out-of-pocket expenses reasonably incurred by CKI in its Anti-Diversion Efforts (including, without limitation, reasonable attorneys’ fees and expenses), [***].

7.5.3Criminal Proceedings. CKI may, but need not elect to, initiate criminal or civil actions against persons or entities seeking to manufacture counterfeit Licensed Products or sell or ship counterfeit Licensed Products. The cost related to any such actions shall be borne [***].

7.5.4Enforcement Activities. To the extent reasonably practicable, CKI will consult with the Licensee in connection with the enforcement activities undertaken pursuant to this §7.5. In addition, upon the request of the Licensee, the parties will consult one time each Annual Period to forecast CKI’s continuing and reimbursable expenses hereunder and to enter into suitable arrangements as may be agreed upon with Licensee, including retainer arrangements, so that CKI may receive the Licensee’s payments in respect thereof at or shortly before such expenses are incurred.

7.5.5Nature of Proceedings. Whenever it is not readily apparent whether actions or proceedings involve counterfeit Licensed Products, Parallel Imports or Diversion, CKI will determine the nature of such items in good faith, taking into account all relevant information provided by the Licensee.

7.5.6Cooperation. The Licensee shall cooperate with CKI in all reasonable actions taken by CKI pursuant to this § 7.5, whether on its own or at the Licensee’s request, and in all criminal proceedings, as may be required or reasonably requested.

7.6Trademark Security.

7.6.1Counterfeit Protection. The Licensee shall use all commercially reasonable efforts to prevent counterfeiting of the Licensed Products. All Licensed Products shall bear and use any reasonable counterfeit preventive system, devices or labels designated by CKI and agreed to by Licensee acting in good faith.

7.6.2Trademark Security. The Licensee shall prepare and implement a trademark security plan (a “Trademark Security Plan”) if requested by CKI at any time during the License Period. The implementation of any such plan shall be subject to the prior written approval thereof by CKI. Not later than [***] after CKI makes such request and, thereafter, at the same time the Licensee submits the Licensing Forecast to CKI, the Licensee shall submit a Trademark Security Plan to CKI. Each Trademark Security Plan (if any) shall describe the methods of controlling the purchase, storage, requisition from storage, use and shipment of Labels to safeguard against the escape or unauthorized use of the Licensed Mark or Licensed Products. Each Trademark Security Plan (if any) shall include, but not be limited to, (i) maintaining necessary records to account for and reconcile all flows of Labels and (ii) providing for an annual audit by the Licensee of such flows and use, for each manufacturing facility in which Labels are affixed to Licensed Products. Within [***] after completion of such audit, the Licensee shall provide CKI with a detailed copy of the audit report. In the event that a manufacturing facility cannot regularly

account for and reconcile substantially all of the Labels or Licensed Products, the Licensee shall discontinue placing orders with such facility upon CKI’s request.

7.7Use of Licensed Mark on Invoices, etc. The use of the Licensed Mark by the Licensee on invoices, order forms, stationery and related materials; in advertising in telephone or other directory listings; or on any internet or website (for identification or promotion only; not for Licensed Product sales unless and except only as approved by CKI in writing) is permitted only upon CKI’s prior written approval of the format in which the Licensed Mark is to be so used, the juxtaposition of the Licensed Mark with other words and phrases, the specific trade name (and form and format thereof), the content of the copy and filing of a fictitious name certificate (“d/b/a”) if using the Licensed Mark or portion (e.g., “CK”) in such name (or other regional notice of “trade” name or use of the Licensed Mark) as applicable, as approved by CKI, and only under the terms and for the duration of the Agreement.

7.8Monitoring. The Licensee shall use reasonable efforts to monitor the use of the Licensed Mark by the Licensee’s customers and to require its customers to advertise, display and promote the Licensed Mark in a manner consistent with the terms and conditions of this Agreement.

ARTICLE VIII TERM AND TERMINATION

8.1Expiration. The License and, subject to §8.5, the other rights granted to the Licensee hereunder shall terminate at the end of the License Period and all rights shall immediately revert to CKI.

8.2Other Rights Unaffected. It is understood and agreed that termination of the License or other rights granted to the Licensee hereunder by CKI on any ground shall be without prejudice to any other rights or remedies which CKI may have.

8.3Immediate Right of Termination of the License. If any of the following grounds for termination shall occur, CKI may elect, by [***] written notice to the Licensee, to terminate immediately (unless timely cured as evidenced to CKI) the License and other rights granted to the Licensee hereunder:

(a)	Deliberately omitted;

(b)

The Licensee shall sell or distribute an entire group of Licensed Products, or shall repeatedly sell or distribute individual items of Licensed Products, under circumstances that Licensee knows or should know cause a breach of § 6.2; or Licensee shall distribute or sell any product under the Licensed Mark not included within the definition of Products hereunder and not specifically approved by CKI in writing (whether as sales or promotion or gift items and whether or not to the public), unless timely cured as evidenced to CKI, within [***] following written notice;

(c)	Failure by the Licensee to perform or observe any material or substantive term or covenant or agreement contained in § 11.4 (including as referenced in §8.3(h),(e) or (k));

(d)	The Licensee shall knowingly sell or distribute Licensed Products to retailers not approved by CKI in accordance with §§ 6.13 or 6.14 [***];

(e)

Underpayment by the Licensee of royalties of [***] or more with respect to any quarterly period within an Annual Period or with respect to any Annual Period, or of [***] or more with respect to any two (2) consecutive or non-consecutive quarterly periods within an Annual Period with respect to any two consecutive Annual Periods; or Licensee fails to make any payment due hereunder for [***] or more following notice of non-payment;

(f)

The Licensee institutes for its protection, or is made a defendant, in any proceeding under bankruptcy, insolvency, reorganization or receivership law, or the Licensee is placed in receivership or makes an assignment for benefit of creditors or is, or states that it is, unable to meet its debts in the regular course of business, and such involuntary proceedings or receiverships are not dismissed or vacated within 60 days of filing or appointment;

(g)	Cessation by the Licensee of, or the taking of steps intended by the Licensee to cease, its business;

(h)

The Licensee (or any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or other entity (each a “Person”) that “controls” Licensee (a “Controlling Entity”)), assigns, attempts to assign, sublicenses, attempts to sublicense, or otherwise transfers or attempts to transfer, by operation of law or otherwise, any of its rights or obligations hereunder (including any attempt by the Licensee to establish a distributorship without the prior consent of CKI as to such distributor and distributorship agreement). Any such attempted or completed assignment, sublicense or transfer (“Transfer”), whether voluntary or by operation of law, directly or indirectly, will be void and of no force or effect;

(i)

Without the prior written consent of Licensee, any Person (other than a controlling shareholder of Licensee on the date hereof) directly or indirectly becomes the owner of [***] or more of the outstanding voting equity ownership of Licensee or any Controlling Entity of Licensee; or any such Person acquires either (a) the ability to elect the majority of the board of directors of Licensee or a Controlling Entity of Licensee or (b) 50% or more of the outstanding voting equity ownership of Licensee or any Controlling Entity of Licensee;

(j)

A change, effect or circumstance occurs that is materially adverse to the business, condition, operations, performance, or properties of the Licensee and prospects of the Licensee or its ability to perform timely its obligations under this Agreement, unless timely cured as evidenced to CKI, within [***] following written notice;

(k)	Licensee transfers all or substantially all of its assets, or any Controlling Entity of Licensee transfers directly or indirectly its ownership or control over Licensee;

(l)	A final judgement of [*] or more is entered against the Licensee, unless timely cured as evidenced to CKI, within [*] following written notice;

(m)

Any indebtedness of the Licensee in excess of [***] is accelerated or otherwise comes due and payable before its stated maturity and is not subject to cure under the applicable instrument or if curable not cured within [***], unless such indebtedness is repaid in full within [***] of such accelerated due date, unless timely cured as evidenced to CKI, within [***] following written notice;

(n)

Any failure by the Licensee to maintain a net worth of at least [***] or a debt to equity ratio of not more than [***] to 1.0 under US generally accepted accounting principles (“GAAP”) for any quarterly period, or any Annual Period during the Term, commencing with the quarterly period ending 31 March 2021; or

(o)	Deliberately omitted.

(p)	The Licensee fails to perform any of its material or substantive obligations hereunder, which failure may adversely affect the Licensed Mark (e.g. validity, enforceability or reputation thereof) [***];

(q)	Deliberately omitted.

(r)

The Licensee shall (i) use a contractor, subcontractor or supplier that does not comply with the Standards under §6.15 or materially breaches the Third Party Manufacturing Agreement or that Licensee knows, or should reasonably know, has materially breached a similar agreement with CKI or its Affiliates or any licensee of CKI or any of its Affiliates; (ii) uses or authorizes the use of a contractor, subcontractor or supplier that is a Prohibited Entity or Individual; (iii) uses an unapproved facility for the production of Licensed Products or the components thereof, (iv) does not timely conduct requisite audits (including re-audits) of facilities used for the production of Licensed Products or the components thereof, (v) fails, within a reasonable period of time, to terminate use of a contractor, subcontractor or supplier that Licensee knows, or reasonably should know, uses false employment, health, safety or salary records, (vi) uses a contractor that violates Anti-Bribery Laws or offers any of CKI’s or its Affiliates’ associates or auditors/assessors of money, gifts, travel or entertainment or other consideration that is intended to or may be construed as an inducement to act (whether by commission or omission) in any manner; (vii) uses a contractor, subcontractor or supplier that makes physical or verbal threats to CKI or its Affiliates or their auditors or other representatives, refuses entry to the manufacturing site, denies access to documents, or denies permission to interview workers; (viii) does not provide CKI or its parent PVH with an accurate listing of facilities used for the production of Licensed Products within [***] after CKI’s request therefor; (ix) fails, within a reasonable period of time to terminate use of a facility that Licensee knows, or reasonably should know fails to comply with any material standard contained in the Standards or repeatedly fails to comply with the Standards; (x) fails, within a reasonable period of time to terminate use of a facility that Licensee knows, or reasonably should know sells Licensed Products to unauthorized entities; (xi) fails, within a reasonable period of time, to terminate use of a facility to

produce Licensed Products that Licensee knows, or reasonably should know fails to take remediation efforts requested in writing to bring such manufacturer, contractor or supplier into compliance with the Standards; (xii) uses a facility to produce Licensed Products but fails to conduct and complete certain training of such facility requested by CKI or its parent PVH or fails to reimburse CKI in connection with training of such facility; (xiii) fails, within a reasonable period of time, to terminate use of a facility to produce Licensed Products that Licensee knows, or reasonably should know Produces or uses counterfeit products or components or (xiv) fails, within a reasonable period of time, to terminate its use of a facility to produce Licensed Products that Licensee knows, or reasonably should know fails to produce Licensed Products of the requisite quality and is not able to demonstrate to CKI’s reasonable satisfaction that (A) it is diligently and in good faith taking measures to ensure that that the facility produces Licensed Products of the requisite quality and (B) Licensed Products that are not of the requisite quality are not being sold or distributed; in each case unless timely cured as evidenced to CKI, within [***] following written notice; or

(s)

The repeated violation by the Licensee of any term or covenant or agreement contained in this Agreement, other than those specified above in this §8.3, or individual violations of various terms or covenants (or individual failures of a number or requirements or obligations, other than those specified above in this §8.3), that is on a recurring and persistent basis as to indicate a careless or willful or reckless disregard for compliance with Licensee’s obligations this Agreement, unless timely cured as evidenced to CKI, within [***] following written notice.

8.4Termination With Notice and Right to Cure. In the event of the failure by the Licensee to perform or observe any material term or covenant or agreement contained in this Agreement or in the event of the breach of or default in any responsibility or obligation of License hereunder, other than those specified in § 8.3, CKI may terminate the License and the other rights granted to the Licensee under this Agreement by giving notice of termination to the Licensee (a “Notice of Termination”), which termination shall become effective automatically unless the Licensee cures the breach within [***] of the giving of the Notice of Termination unless such cure cannot be completed within [***], in which case termination will not become effective so long as the Licensee is in good faith diligently and expeditiously attempting to cure such breach, throughout such period, and cures the breach within [***]. In the event of notice of termination due to quality defect which specifies no further shipment of the applicable Licensed Products, Licensee will promptly cease shipment (taking all efforts to stop, and cause all employees to stop, such shipments). If the Licensee does ship Licensed Products in contravention to the immediately preceding sentence, [***]. Licensee hereby waives any and all rights relating to claims for wrongful termination, loss of goodwill and consequential (or other than direct) damages in connection with any termination of this Agreement and agrees not to allege any such claim.

8.5Effect of Termination. Upon the expiration or termination of the License and the License Period for any reason whatsoever, all of the rights of the Licensee under this Agreement shall forthwith terminate and immediately revert to CKI; all royalties on sales theretofore made, as well as any and all amounts payable or incurred by CKI applicable to this Agreement including services or work performed or in process as to advertising, public relations, visual display and other activities shall become immediately due and payable; the Licensee shall forthwith discontinue all use of the Licensed Mark, except that the Licensee may, on a non-exclusive basis, during the period (i) commencing on the date of the expiration of the License Period pursuant to § 2.1 or §2.2 or termination of the License and ending [***] thereafter (the “Disposal Period”), consummate all sales of Licensed Products which were firm on the date of such expiration or termination and sell the balance of the inventory not purchased by CKI within [***] following date of expiration or termination, to be sold within the applicable Disposal Period as provided in §8.6; provided, however, that any advertising used during the Disposal Period shall be subject to CKI’s prior written approval (which approval right shall be exercised by CKI consistently with its exercise of such approval rights prior to the Disposal Period) and such disposition of the Licensed Products shall continue to be subject to the Licensee’s obligations hereunder, including, but not limited to, payments to be made to CKI, and royalties with respect thereto shall be due on the last day of the Disposal Period. Without limiting the generality of the first clause of this §8.5, the Licensee acknowledges that activities, including sales during the Disposal Period, are on a non-exclusive basis. Furthermore, in the event of breach of any of Licensee’s obligations during the Disposal Period, upon [***] notice by CKI (without any right to cure) the Disposal Period shall terminate. Subsequent to the Disposal Period or, if none, subsequent to such termination, the Licensee shall no longer use the Licensed Mark, any variation, imitation or simulation thereof, or any trademark similar thereto; and if applicable, the Licensee will promptly transfer to CKTT and, where applicable, to CKI, free of charge, all registrations, filings and rights including for example short form recordations as “licensee” in jurisdictions outside the U.S., which may apply with regard to the Licensed Mark which it may have possessed at any time; and the Licensee shall thereupon deliver to CKI, free of charge, all Licensed Products and all Designs in its possession or control, designed or approved by CKI, and all Labels supplied by CKI in the Licensee’s possession or control, and any additional design data and information (e.g. to include sources, such as for fabric,

trim and actual production) “in development” or “in process” for Collections which have been expected to be shown or shipped following termination of this Agreement (for example if termination is earlier than expiration due to breach or default). CKI shall have the option, exercisable upon notice to the Licensee within [***] of such expiration or termination, to negotiate the purchase of Labels which have not been supplied by CKI. If such negotiations do not result in the purchase of such Labels or any part of W-I-P, the Licensee shall destroy the unused Labels and W-I-P (except for piece goods or other unidentifiable generic materials otherwise useable by Licensee) at the end of the Disposal Period or, if none, upon such termination, under the supervision of CKI, and the Licensee shall supply to CKI a certificate of destruction thereof signed by a duly authorized officer of the Licensee or a professionally recognized third party/outside service.

8.6Inventory Upon Termination. Upon the expiration or termination of the License and the License Period for any reason whatsoever, the Licensee shall immediately deliver to CKI a complete and accurate schedule of inventory of Licensed Products (i.e., inventory constituting finished Licensed Products on hand at termination only (no work-in-process, a/k/a “W-I-P,” piece goods or other materials)) as of the close of business on the date of such expiration or termination (the “Inventory Schedule”). CKI thereupon shall have the option, exercisable by written notice to the Licensee within [***] after its receipt of the Inventory Schedule, to purchase (or to have its designee purchase) any or all of the inventory (other than inventory required to consummate sales of Licensed Products which were firm on the date of such expiration or termination) for an amount equal to [***]. Percentage Royalties shall not be payable with respect to the purchase of the inventory by CKI. In the event such notice is sent by CKI, CKI (or its designee) may collect the inventory referred to therein within 9[***] after CKI’s notice. CKI (or its designee) will pay for the inventory upon collection. In the event such notice is not sent, the Licensee may dispose of the Licensed Products during any Disposal Period pursuant to § 8.5; provided, however, that such disposition shall continue to be subject to the Licensee’s obligations hereunder, including, without limitation, with respect to the payment of royalties and the approval of customers and advertising. At the end of the Disposal Period, or if none, upon such termination, any Licensed Products remaining in the Licensee’s possession or control, including, without limitation, in any stores of the Licensee, shall be destroyed; and any and all design Data, specifications, CAD’s or other Design Materials, to include any and all piece goods and components bearing the Licensed Mark or other “CK” or derivative indicia including packaging materials and/or components of Licensed Products, shall be delivered to CKI free of charge, or at the request of CKI, shall be destroyed. Notwithstanding the foregoing, Licensee will continue to comply with the terms of the product warranty supplied with Licensed Products and will maintain operations and a supply of components to repair, replace or otherwise comply with terms of such warranties, for a two (2) year period (or such longer period consistent with the procedures of Licensee) following the last date of the Disposal Period referred to herein. To the extent the Licensee completely removes the Licensed Mark from such Licensed Products, and all Labels attached to such Licensed Products, and other Design Materials, and such Licensed Products are not recognizable as a Licensed Product and cannot be distinguished from similar generic products generally available in the marketplace, such Products shall no longer be Licensed Products. CKI shall have the right at any time after termination of this Agreement, and at its expense, to conduct a single physical inventory of the Licensed Products then in the Licensee’s possession or control.

8.7Freedom to License. CKI shall be free to license to others the use of the Licensed Mark in connection with the manufacture, sale, distribution and promotion of Licensed Products in the Territory upon termination or expiration of this Agreement, and at any time to enter into discussions and negotiations and agreements applicable thereto, provided only that no shipment of Licensed Products to retail accounts doors (for sale to consumers) (except to warehouses prior to door delivery is permitted) and no publication of institutional or consumer advertising of the Licensed Products pursuant to any such new license will be permitted prior to [***].

8.8Rights Personal. The License and rights granted hereunder are personal to the Licensee. No assignee for the benefit of creditors, receiver, trustee in bankruptcy, sheriff or any other officer or court charged with taking over custody of the Licensee’s assets or business, shall have any right to continue performance of this Agreement or to exploit or in any way use the Licensed Mark if this Agreement is terminated pursuant to §§ 8.3, 8.4 or 11.8, except as may be required by law.

8.9Trustee in Bankruptcy. Notwithstanding the provisions of § 8.8, in the event that, pursuant to the applicable bankruptcy law (the “Code”), a trustee in bankruptcy, receiver or other comparable person, of the Licensee, or the Licensee, as debtor, is permitted to assume this Agreement and does so and, thereafter, desires to assign this Agreement to a third party, which assignment satisfies the requirements of the Code, the trustee or the Licensee, as the case may be, shall notify CKI of same in writing. Said notice shall set forth the name and address of the proposed assignee, the proposed consideration for the assignment and all other relevant details thereof. The giving of such notice shall be deemed to constitute an offer to CKI to have this Agreement assigned to it or its designee for such consideration, or its equivalent in money, and upon such terms as are specified in the notice. The aforesaid offer may be accepted by CKI only by written notice given to the trustee or the Licensee, as the case may be, within [***] after CKI’s receipt of the notice to such party. If CKI fails to deliver such notice within said [***],

such party may complete the assignment referred to in its notice, but only if such assignment is to the entity named in said notice and for the consideration and upon the terms specified therein. Nothing contained herein shall be deemed to preclude or impair any rights which CKI may have as a creditor in any bankruptcy proceeding.

8.10Effect of CKI Bankruptcy. All rights and licenses granted by CKI hereunder are and shall be deemed intellectual property, as such term is used in and interpreted under section 365(n) of the United States Bankruptcy Code (the “Code”). Each of Licensee and CKI shall have all rights, elections, and protections under the Code and all other applicable bankruptcy, insolvency, and similar laws with respect to this Agreement.

8.11Compensation. Without limiting any right or remedy of CKI including its right to seek damages for breach without (or prior to) termination, if CKI terminates this Agreement pursuant to § 8.3, CKI shall have the right to receive, and the Licensee shall immediately pay to CKI, [***].

ARTICLE IX INDEMNIFICATION AND INSURANCE

9.1Indemnification by the Licensee. The Licensee does hereby indemnify and hold harmless CKI, its Affiliates, including, without limitation, PVH, CKTT, and its and their current and former respective directors, officers, employees, agents, trustees, and representatives, as well as Mr. Calvin Klein, his heirs, his estate and their respective legal representatives (each, an “Indemnified Party”) from and against any and all losses, liabilities, damages and expenses (including reasonable attorneys’ fees and expenses (including allocable costs of in-house counsel)), whether incurred in any action or proceeding between the parties hereto or otherwise which an Indemnified Party may incur or be obligated to pay in any action, claim or proceeding, for or by reason of any acts, whether of omission or commission, that may be committed by the Licensee in connection with the Licensee’s actions or performance under or related in any way to this Agreement, including but not limited to:

(a)to the extent permitted by law, any alleged defect in any Licensed Product, regardless of whether the action is based upon negligence or strict liability, and regardless of whether the alleged negligence is characterized as “passive” or “active”;

(b)the development, manufacture, labeling, sale, distribution, marketing on advertisement or promotions of any Licensed Product by the Licensee or any other operations under this Agreement;

(c)any violation of any warranty, representation or agreement made by the Licensee pertaining to a Licensed Product; or

(d)the claim of any broker, finder or agent used by the Licensee in connection with the making of this Agreement or any transactions contemplated by this Agreement.

9.2Notice of Suit or Claim. The Licensee shall promptly inform CKI by written notice of any suit or claim against the Licensee relating to the Licensee’s performance under this Agreement, whether such suit or claim is for personal injury, involves alleged defects in the Licensed Products manufactured, sold or distributed hereunder, or otherwise.

9.3Indemnification by CKI. CKI does hereby indemnify and hold harmless the Licensee and its Affiliates, and their respective managers, directors, members, shareholders, employees and agents from and against any and all actual out of pocket costs, losses, and liabilities (including reasonable attorney’s fees (not in-house), but excluding any consequential damages, incidental damages and/or lost profits which might be claimed by Licensee itself) which any of them may incur or for which it may become liable or compelled to pay in any third party action or claim alleging: (i) CKI’s breach of any representation or warranty of CKI hereunder; or (ii) that the Licensee’s use of the Licensed Mark in accordance with the terms of this Agreement violates the bona fide trademark ownership rights of a third party in [***]; or (iii) that any advertising or advertising materials originally created by CKI and used strictly in accordance with the provisions hereof and within any limitation to usage applicable thereto, violates the copyright of a third party, or limitation or usage rights as to any model depicted therein. The Licensee will promptly notify CKI of any action or claim brought to its attention; provided, however, that the failure to promptly notify CKI shall not relieve CKI of its obligation hereunder, except to the extent (if any) that CKI actually prejudiced thereby. The provisions of this § 9.3 and the obligations of CKI set forth herein shall survive the expiration or other termination of this Agreement.

9.4Insurance.

9.4.1.Requirement. Without limiting the Licensee’s liability pursuant to the indemnity provisions of this Agreement, the Licensee shall maintain (throughout the term and Disposal Period and for one (1) year thereafter) comprehensive general liability insurance in the amount of at least [***] (combined single limit per occurrence and in the aggregate) with a broad form property damage liability endorsement. This insurance shall include broad form blanket contractual liability, personal injury liability, advertising liability, products and completed operations liability. Each coverage shall be written on an “occurrence” form.

9.4.2Theft and Destruction Coverage. The Licensee shall purchase insurance against theft and destruction of the Licensed Products which shall (i) be written on an “all risk” basis, including, without limitation, employee dishonesty, flood and earthquake coverage; (ii) provide that the Licensee shall be reimbursed for loss in an amount equal to the manufacturer’s selling price for the Products (either by a selling price endorsement or business interruption insurance); (iii) be in effect while goods are on premises owned, rented or controlled by the Licensee and while in transit or storage; and (iv) [***].

9.4.3General Provision. The insurance described in § 9.4.1 shall include, to the extent commercially available: (i) a cross-liability endorsement naming each of CKI, its parent PVH, CKTT, and Mr. Calvin Klein; (ii) an endorsement stating that CKI shall receive at least [***] written notice prior to cancellation or non-renewal of coverage; (iii) an endorsement naming each of CKI, PVH, CKTT, and Mr. Calvin Klein as additional insureds; (iv) an endorsement stating that the insurance required by this Agreement is primary and that any insurance purchased by CKI, PVH, CKTT, or Mr. Calvin Klein shall only apply in excess of the insurance purchased by the Licensee; and (v) a waiver of subrogation in favor of each of CKI, PVH, CKTT, and Mr. Calvin Klein; and (vi) an endorsement stating that each of CKI, PVH, CKTT, and Mr. Calvin Klein may recover for any loss caused CKI, its agents or employees, whether caused by the negligence (including active, passive and gross negligence) of the Licensee, or otherwise.

9.4.4 Approved Carrier/Policy Changes. All insurance shall be obtained from an insurance company rated “[***]” or better by A.M. Best or otherwise approved by CKI. The Licensee shall give at least [***] prior written notice to CKI of the cancellation or any modification of such insurance policy that would affect any of CKI’s, PVH’s, CKTT’s, or Mr. Calvin Klein’s status or benefits thereunder. This insurance may be obtained for CKI, PVH, CKTT, or Mr. Calvin Klein by the Licensee in conjunction with a policy which covers products other than the Licensed Products.

9.4.5 Evidence of Coverage. No later than 180 days from the date hereof, the Licensee shall furnish to CKI evidence, in form and substance satisfactory to CKI, of the maintenance and renewal of the required insurance copies of policies with applicable riders and endorsements) and certificates of insurance.

9.4.6Territory. The insurance set forth in this section must cover the entire Territory.

ARTICLE X COMPLIANCE WITH LAWS

10.1Compliance with Laws. The Licensee shall comply with all laws, rules, regulations and requirements of any governmental body which may be applicable to the operations of the Licensee contemplated hereby, including, without limitation, as they relate to the manufacture, distribution, sale or promotion of Licensed Products, or the business conducted under this Agreement as may be applicable, notwithstanding the fact that CKI may have approved any such item or conduct. Furthermore, PVH policy currently prohibits Licensee (and any sublicensee, distributor and subcontractor) from manufacturing, importing, selling, or distributing, any goods hereunder (whether Licensed Products or components) in or into [***] (collectively, the “Restricted Countries”) Licensee shall not conduct business that in any way relates to this Agreement or authorize third parties (e.g. no contractors, subcontractors, manufacturers, suppliers or agents) to conduct such business with any entity or individual (i) who is a Prohibited Entity or Individual; (ii) that would otherwise cause a violation of United States law and regulations or cause PVH to be in violation of any United States law or regulation; or (iii) that is invested in the cotton sector in Uzbekistan or Turkmenistan or to Licensee’s knowledge using cotton sourced from Uzbekistan or Turkmenistan. Licensee agrees that it will not conduct business directly or indirectly under this Agreement in any Restricted Country. As to certain Restricted Countries (e.g. [***]) where activity is not proscribed by US Law or regulation but is proscribed by PVH, Licensee may submit requests for waivers or special permissions, under PVH’s then standard policies and procedures.

Without limiting the generality of anything set forth in this Agreement, Licensee acknowledges that CKI’s parent PVH has a strict policy regarding ethics, and specifically with respect to payments and gifts to its associates. Any offer to, and acceptance by, any of PVH’s or its Affiliates’ (which includes CKI) associates of money, gifts, travel or entertainment or other consideration that is intended as an inducement to act (whether by commission or omission) in any manner is strictly prohibited. In this regard, Licensee understands that if it makes a prohibited gift or otherwise corruptly seeks to influence or induce an associate of PVH or its Affiliates, this Agreement and all other business with Licensee may be terminated immediately. Furthermore, Licensee acknowledges that CKI and its parent PVH (and affiliated entities) are global companies based in the U.S. subject to the U.S. Foreign Corrupt Practices Act of 1977, 15 USC 78-dd-1, et seq. as amended, and Licensee agrees to comply therewith and with the UK Bribery Act 2010, the PRC Anti-Unfair Competition Law and Article 164 of PRC Criminal Law, and other relevant multilateral measures such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the UN Convention Against Corruption and relevant local laws (collectively “Anti-Bribery Laws”), and agrees not to engage in any conduct which would cause CKI or PVH to violate any of such Anti-Bribery Laws. Accordingly, in connection with this Agreement, Licensee agrees that it has not and shall not offer, promise or give anything of value (including political contributions or Licensed Products), whether directly or indirectly, to any Government Official (defined below) in order to obtain or retain business or otherwise secure an improper advantage. “Government Officials” include (1) any officer or employee of any government agency or entity, including elected officials, (2) any candidate, employee or official of a political party, (3) any legislative, administrative or judicial official, (4) any employee of a public international organization, (5) any employee of an entity that the government owns or controls through investment, management, oversight or subsidies, that performs a government function (e.g., banking, health, public safety, or media services, tax administration, utilities), and (6) any person otherwise categorized as a government official under local law. Examples of Government Officials include customs officials, government inspectors, tax auditors and employees of state-owned companies. Licensee acknowledges it is aware of the penalties and legal consequences involved in participating in corrupt activities. In addition, Licensee acknowledges that CKI and PVH has a strict policy regarding ethics, and specifically with respect to payments and gifts to its associates. Any offer to, and acceptance by, any of CKI’s, PVH’s or their Affiliates’ associates of money, gifts, travel or entertainment or other consideration that is intended to or may be construed as an inducement to act (whether by commission or omission) in any manner is strictly prohibited.

Without limiting the generality of anything set forth in this Agreement, in the manufacture of Licensed Products, Licensee shall abide by all limitations on restricted substances (e.g., dyes, metals, etc.) attached hereto as Exhibit 10.1B Restricted Substances Limitation, as the same may be reasonably revised by CKI’s parent PVH from time to time upon reasonable notice to Licensee and CKI’s other licensees, and any reasonable “manufacturing restricted substance limitation” requirements as provided and promulgated from PVH from time to time; provided, however, that in the event there are additional or stricter restrictions imposed by any revised limitations, Licensee shall have a reasonable time period (the “RSL Sell Off Period”) to phase out manufacture of and to sell off any Licensed Products that do not meet such additional or stricter restrictions, including through the fulfillment of any firm orders for Licensed Products placed or received prior to notice from CKI. Notwithstanding the foregoing, the RSL Sell Off Period shall be no longer than the time frame in which CKI and its Affiliates are required to be in compliance with any restrictions imposed by any governmental authority, settlement agreement, judgement, or other legally binding agreement, law, or order.

Without limiting the generality of anything set forth in this Agreement including as contained on Exhibit 10.1B Restricted Substances Limitation, Licensee shall not knowingly allow Licensed Products to contain “conflict minerals” (as defined in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) from the Democratic Republic of Congo or any adjoining country (the “Restricted Territory”), and such “conflict minerals” shall not knowingly be used by Licensee in the production of Licensed Products. The conflict minerals include the following metals or their ores: cassiterite (tin), Columbite-tantalite (tantalum), wolframite (tungsten) and gold. Upon request by CKI, Licensee will provide CKI with complete and accurate country of origin information for Licensed Products and their components to the extent known to Licensee.

Licensed Products shall not incorporate cotton or any other material or product sourced from Uzbekistan or Turkmenistan or textiles produced using cotton sourced by Uzbekistan or Turkmenistan. In addition, Licensee may not conduct business that in any way relates to this Agreement or authorize third parties to conduct such business with any entity or individual that is invested in the cotton sector in Uzbekistan or Turkmenistan or using cotton sourced in Uzbekistan or Turkmenistan.

Without limiting the generality of anything set forth in this Agreement, Licensee agrees, in accordance with all applicable laws, rules and regulations in force from time to time, to maintain diligent and strict policies and procedures, to

safeguard personal data and information of any end consumer (“Private Data”), if applicable, whether constituting EU residents’ personal data (as defined in EU Regulation 2016/679 General Data Protection Regulation or GDPR and its local implementation legislation), as to the U.S. the FTC Disposal of Consumer Report Information and Records Rule, 16 C.F.R. § 682 (2005) as well as the California Consumer Protection Act (“CCPA”); security breach notification laws (such as Cal. Civ. Code §§ 1798.29, 1798.82 - 1798.84); laws imposing minimum data security requirements (such as Cal. Civ. Code § 1798.81.5 and 201 Mass. Code Reg. 17.00), laws requiring the secure disposal of records containing certain Personal Data (such as N.Y. Gen. Bus. Law § 399-H), or as to Private Data under any other jurisdictional authority in the Territory, as to operations under this Agreement (collectively, “Privacy Regulations”); and to enter into a separate data processing agreement or other agreement, if and to the extent required by any Privacy Regulations. In case Private Data is obtained, disclosed or processed in the future, Licensee agrees that it shall (i) comply in all material respects with all the Privacy Regulations in force from time to time and applicable to this Agreement; (ii) collect, store, transmit, process and destroy any such personally identifiable information or data in accordance with all the Privacy Regulations; and (iii) not do, or cause or permit to be done, anything which may cause or otherwise result in a breach by CKI (or its parent PVH) of the same, and (iv) in the event consumers’ Private Data is obtained by Licensee under or in relation to this Agreement, notify CKI (or its parent PVH) promptly and otherwise ensure such data is handled in compliance with Exhibit 10.1A E-Commerce Guidelines attached hereto and incorporated herein. For purposes of this Agreement, “Private Data” includes any information collected by or provided to Licensee under this or in connection with this Agreement that, alone or in combination with other information, identifies or could reasonably identify a particular person or household, as provided under any Privacy Regulations. Private Data may include, but is not limited to, identifiers (e.g., name, Social Security Number), or other tax identification number, biometric information, network activity information (e.g., IP address), geolocation data, audio and visual information, employment information and education information.

10.2Equitable Relief. CKI shall be entitled to equitable relief by way of temporary and permanent injunction and such other and further relief at law or in equity as any court with jurisdiction may deem just and proper. The Licensee waives the requirement of the posting of a bond in connection with any application by CKI for equitable relief.

ARTICLE XI MISCELLANEOUS

11.1Warranties and Representations of the Parties. Each of the parties hereby represents and warrants to the other party that: it is a corporation (or limited liability company, as applicable) duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; it has the full right, power and authority to enter into, and perform its obligations under, this Agreement; and all necessary corporate acts have been effected by it to render this Agreement valid and binding upon it.

11.2Definitions. Defined terms used herein have the meaning ascribed thereto in the applicable section in which set forth.

11.3Notices. All reports, approvals and notices required or permitted to be given under this Agreement shall be in writing and shall, unless specifically provided otherwise in this Agreement, be deemed to have been given if personally delivered or faxed (on the date sent), or if mailed, three business days from the date of mailing (by certified or registered mail, return receipt requested and postage prepaid), or if by overnight air courier, one business day from the date of overnight air courier handling as follows:

	If to CKI, to:	Calvin Klein, Inc.
		205 West 39^th Street
		New York, New York 10018
		Attention: Chief Executive Officer
		Telephone: (212) 292-9298
		Facsimile: (212) 292-9724


	With a copy to:	Calvin Klein, Inc.
		205 West 39^th Street
		New York, New York 10018
		Attention: General Counsel

		Telephone: (212) 292-9652
		Facsimile: (212) 764-6784


	If to the Licensee, to:	Movado Group, Inc.
		650 From Road, Ste 375
		Paramus, New Jersey 07652
		Attention: Calvin Klein Brand President
		Telephone: (201) 267-8000
		Facsimile: 201 (267)-8050


	With a copy to:	Movado Group, Inc.
		650 From Road, Ste 375
		Paramus, New Jersey 07652
		Attention: General Counsel
		Telephone: (201) 267-8105
		Facsimile: (201) 267-8050

A party may change its address for receipt of notices at any time upon notice to the other party.

11.4No Assignment without Consent. The License and all rights granted to the Licensee hereunder are personal in nature, and the Licensee shall not Transfer the License as referenced in §8.3, this Agreement or its rights and interest hereunder, or any part hereof, without the prior written consent of CKI, which consent may be withheld by CKI in its sole and absolute discretion. In the event CKI consents to a change-in-control Transfer, such consent may be based on financial considerations, “competitor” relationships (including “competitor” relationships as to any of CKI’s parent PVH or PVH’s Affiliates), and/or other considerations and contingencies, and subject to payment to CKI of a consent fee to be set by CKI.

11.5No Sublicense; No Distribution Agreement without Consent. The Licensee is prohibited from granting any sublicenses under this Agreement. The Licensee is prohibited from entering into any distribution agreements with respect to Licensed Products under this Agreement, without the prior written consent of CKI to both the potential distributor as well as to the form of agreement, which consent may be withheld by CKI in its reasonable discretion; provided that no approval shall be required for the terms and conditions of a distribution agreement that is substantially identical to a template previously approved by CKI. No distributor shall reduce, diminish, curtail or modify any of Licensee’s obligations and responsibilities or provisions hereof including but not limited to payments of expenditures, and Licensee will ensure and guarantee compliance by such parties.

11.6Assignment by CKI. CKI shall have a complete and unrestricted right to Transfer any or all of its rights and interests in this Agreement, provided that such transferee is bound by all of the terms hereof, and subject to the Licensee’s right to continue to exercise its rights hereunder.

11.7No Agency. This Agreement will not constitute the parties as partners or as joint venturers, or either as agent of the other and the Licensee shall not represent itself as the agent or legal representative of CKI or its Affiliates for any purpose whatsoever and shall have no right to create or assume any obligation of any kind, express or implied, for or on behalf of them in any way whatsoever. CKI shall similarly not represent itself as the agent or legal representative of the Licensee or its Affiliates. CKI shall have not responsibility for any of Licensee’s operations or production, or of Licensee’s manufacturing, distribution or sales or marketing facilities or for any decisions that may be made in connection therewith regardless of whether CKI approves, recommends, requires or suggests any of the same.

11.8Suspension of Obligations. If the Licensee shall be prevented from performing any of its obligations because of governmental regulation or martial order, or by war, declared or undeclared, or other major and material calamities such as fire, earthquake, pandemic or similar Acts of God (collectively, “Force Majeure Events”), the Licensee’s obligations so affected shall be suspended during the period of such conditions for up to [***] only (“Force Majeure Period”) except for Licensee’s obligations to pay any and all Percentage Royalties or Fees, Advertising Expenditures, and Sole and Absolute Contributions, in each case based on Net Sales earned amounts (but not minimum dollar amounts) and all such earned fees and amounts, and any and all other amounts or payments including, for example interest, under the Agreement and provided

the Licensee promptly commences and proceeds diligently to ameliorate the effect. If such condition continues for a period of more than [***], CKI shall have the right to terminate this Agreement.

11.9Benefit. This Agreement shall inure to the benefit of and be binding upon the parties hereto, and, subject to §§ 11.4 and 11.6, their successors and assigns. PVH, CKTT and Mr. Calvin Klein (with respect to the indemnification and insurance coverage provisions contained in §9) shall be third-party beneficiaries of this Agreement and, whether or not expressly set forth herein, shall have the right (a) to exercise, and enforce against the Licensee, the rights of CKI hereunder if CKI fails to exercise such rights, and (b) to exercise, and enforce against the Licensee, the same rights as CKI hereunder in addition to (and not in lieu of) any rights CKI has hereunder. Nothing herein shall be deemed to give the Licensee any rights to make any claim against PVH, CKTT and/or Mr. Calvin Klein.

11.10Entire Agreement; Amendment. This Agreement, including the exhibits hereto, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and all prior agreements, contracts, promises, representations and statements between them, if any, whether written or oral, with respect thereto are merged into this Agreement. This Agreement may not be amended or modified, except in a writing signed by both parties hereto.

11.11Non-Waiver. No waiver by either party of any breach hereof or default hereunder will constitute a continuing wavier of such provision or of any other provision of this Agreement. Acceptance of payment by CKI will not be deemed a waiver by CKI of any violation of or default under any of the provisions of this Agreement by the Licensee or an election of remedies as to which any and all rights (and all remedies) are expressly reserved and retained.

11.12Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality and enforceability of such provisions shall not be affected or impaired in any other jurisdiction, nor shall the remaining provisions contained herein in any way be affected or impaired thereby.

11.13Headings. The headings of the Articles and sections of this Agreement are for convenience only and in no way limit, define or affect the terms or conditions of this Agreement.

11.14Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.15Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAW. (However, disputes regarding the Licensed Mark will be resolved in accordance with the U.S. Federal trademark laws and related laws, statues, rules and regulations of the United States unless there are no U.S. Federal laws, statutes, rules or regulations dispositive of such dispute, in which event such disputes will be resolved in accordance with the previously described laws of the State of New York.)

11.16Jurisdiction. Any legal action or proceeding with respect to this Agreement shall be brought in the federal or state courts seated in the County of New York, State of New York and, by execution and delivery of this Agreement, each party hereby accepts for itself and in respect to its property, and submit to generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. The Licensee hereby irrevocably and unconditionally waives any claim for special, consequential or punitive damages and any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing or maintaining of any such action or proceeding in such respective jurisdictions. Each party irrevocably and unconditionally consents to the service of process of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the other party at its address for notices provided in § 11.3, such service to become effective 30 days after such mailing.

11.17Non-Solicitation.

(a)The Licensee agrees that during the License Period and for a period of [***] following the termination or expiration thereof for any reason, the Licensee shall not hire or solicit to hire, whether on its own behalf or on

behalf of any other person (other than CKI), any management level or executive level employee of CKI or any of its Affiliates or any management level or executive level employee who had left the employ of CKI or any of its Affiliates within [***] of the termination or expiration of the License Period. In addition, during the License Period and such [***] period thereafter, the Licensee shall not, directly or indirectly, encourage or induce any management level or executive level employee of CKI or any of its Affiliates to leave CKI’s or such Affiliate’s employ.

(b)CKI agrees that during the License Period and for a period of [***] following the termination or expiration thereof for any reason, CKI shall not hire or solicit to hire, whether on its own behalf or on behalf of any other person (other than the Licensee), any management level or executive level employee of the Licensee or any of its Affiliates or any management level or executive level employee who had left the employ of the Licensee or any of its Affiliates within [***] of the termination or expiration of the License Period. In addition, during the License Period and such [***] period thereafter, CKI shall not, directly or indirectly, encourage or induce any management level or executive level employee of the Licensee or any of its Affiliates to leave the Licensee’s or such Affiliate’s employ.

11.18Confidentiality. Each of the parties hereto acknowledges that it may receive from the other (the “Disclosing Party”): (a) prints, designs, ideas, sketches, and other materials or information, including, without limitation; (b) financial or business information; (c) a formula, pattern, compilation, program, device, method, technique, or process; or (d) other information that in each case derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use which the Disclosing Party intends to use on or in connection with lines of merchandise other than the Licensed Products and which have not as yet found their way into the channels of distribution. The parties recognize that these materials are valuable property of the Disclosing Party. Each of the parties hereto acknowledges the need to preserve the confidentiality and secrecy of these materials and agrees to take all necessary steps to ensure that use by it, or by its contractors, will in all respects preserve such confidentiality and secrecy, while acknowledging that each of the parties works with others on product development and designs. Furthermore, Licensee acknowledges and agrees that it will keep all CKI (and its parent PVH’s) data, obtained via access to CKI or PVH computer networks or systems, (including for example, confidential information and personally identifiable information/personal data aka “PII/PD”) confidential and secure and maintain operations and procedures (e.g. encryption) to protect against leakage and third party “hackers”, including as applicable security policies and procedures applicable to GDPR EU laws, rules and regulations applicable to PII/PD, including entering into a “standard contractual clause” agreement, in the form prescribed by PVH (for its and its Affiliates, vendors/suppliers and licensees as applicable) as to privacy shield requirements, as reasonably and promptly agreed to by Licensee, and incorporated herein, by amendment by this Agreement. None of the parties shall, at any time during the License Period or any time thereafter, disclose or use for any purpose, other than as contemplated by this Agreement, any confidential information and data relating to the business of the other, except as required or otherwise considered necessary in or to its business, but under its normal and customary confidentiality procedures applicable overall as to such use. Nothing herein shall be deemed to limit CKI’s rights under §§ 6.8 and 6.12.

The provisions of this § 11.18 shall not apply to information that (i) is now or hereafter becomes generally available to the public, other than as a result of a breach hereof, or (ii) is obtained from a third party that, to the knowledge of the party receiving the information, is not under any obligation to keep such information confidential.

Notwithstanding anything in this § 11.18 to the contrary, if any party becomes legally compelled (including by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any of the confidential information, such party shall provide the others with prompt written notice of such requirement so that the party whose information it is may seek a protective order or other appropriate remedy. If such protective order or other remedy is not obtained, the party under compulsion to disclose the information agrees to disclose only that portion of the confidential information, which it is advised by counsel, is legally required to be disclosed, and it agrees to take all reasonable steps to preserve the confidentiality of the confidential information (including by obtaining, at the cost of the owner of the information, an appropriate protective order or other reliable assurance that confidential treatment will be accorded the confidential information). In addition, the party under compulsion to disclose the information shall not oppose any effort (and shall, if and to the extent requested by the owner of the information, cooperate with, assist and join with the owner of the information, at the expense of the owner of the information) in any action by the owner of the information to obtain a protective order or other reliable assurance that confidential treatment will be accorded the confidential information.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

	CALVIN KLEIN, INC.


	By:	/s/ Eugene Gosselin
		Eugene Gosselin, CFO, EVP Ops


	MOVADO GROUP, INC.

	By:	/s/ Mitchell Sussis
		Mitchell Sussis, Senior VP


	SWISSAM PRODUCTS LIMITED

	By:	/s/ Mitchell Sussis
		Mitchell Sussis, Director

EXHIBIT 31.1

CERTIFICATIONS

I, Efraim Grinberg, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Movado Group, Inc.;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 24, 2020

		/s/ Efraim Grinberg
		Efraim Grinberg
		Chairman of the Board of Directors and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Sallie A. DeMarsilis, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Movado Group, Inc.;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 24, 2020

		/s/ Sallie A. DeMarsilis
		Sallie A. DeMarsilis
		Executive Vice President, Chief Operating Officer,
		Chief Financial Officer and
		Principal Accounting Officer

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Movado Group, Inc. (the “Company”) for the quarter ended October 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) the undersigned hereby certifies, in the capacity indicated below and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 24, 2020

/s/ Efraim Grinberg

Efraim Grinberg

Chairman of the Board of Directors and Chief

Executive Officer

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Movado Group, Inc. (the “Company”) for the quarter ended October 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) the undersigned hereby certifies, in the capacity indicated below and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 24, 2020

/s/ Sallie A. DeMarsilis

Sallie A. DeMarsilis

Executive Vice President,

Chief Operating Officer,

Chief Financial Officer and

Principal Accounting Officer