MOV
#We're doing this across all of our licensed brands.
This is a partnership we did with HP, and we're very happy with the initial feedback we have received.
There's a total of 25 SKUs, and we are very thoughtful in terms of ---+ it's design and brands first, plus the functionality.
So when you look at the watches, they represent ---+ whether it's a Tommy Hilfiger watch, it looks like a Tommy Hilfiger watch.
You go to Ferrari, it looks like a Ferrari watch.
We've been very thoughtful.
It's not a cookie-cutter approach.
They are very different.
And we also were very careful in planning the price points so that they mirror the customer that has appeal for these brands.
So we feel very good on how we plan the price points and the functionalities.
Our research indicates these are the top functionalities; it's notifications for these watches; it's step count.
Those, at those price points, we believe are the right things.
And it's a combination, analog watch with ---+ there's a screen that lights up on a dial that is invisible.
When you look at the watch without being lit up, you think it's a traditional watch.
So we think we hit a sweet spot in terms of design and technology functionality.
The short answer to that is yes, we expect our gross margins to hold up.
And our operating expenses ---+ we continue to invest behind our brands from brand awareness and initiatives.
We will obviously take out the variable expenses that are related to the decline in sales, but ---+ and obviously we're very good at managing our expenses.
We have got a really long track record of that.
But we're going to do what is right for the longer-term health of the brand and the Business, and continue to support and build behind our initiatives.
No, I think, as <UNK> mentioned, we're doing very well in the chain jewelry stores specifically, and they are mostly mall-based.
So I think their traffic is less variable, as they have a large jewelry business and bridal business and things like that.
You also have to recall that that's not the distribution for our fashion watch brands.
The fashion watch brands are primarily, in the US, distributed in the department store arena that is more highly challenged today.
So, I think it's both the category and the channel that is challenged.
And so our growth specifically is in the Movado brand, and Movado is outpacing the fashion watch category everywhere ---+ department stores and jewelry stores.
And I think that it was also in <UNK>'s comment is we continue to gain fairly significant market share.
Well, let me speak first about movado.com because that, as you know, last year we revamped, we launched a new platform, and we continue to see major increases in our business there and also in traffic.
And we have been adding a lot of digital initiatives, so we're seeing there's a connection between social media and digital initiatives.
People will go to the website as the first point of entry to learn more about new collections and story telling, and we picked up some of the sales there.
Other sales, we don't pick up, but we believe that the brand website is serving as a platform, a showcase, to tell the story of the brand and the collections.
So we're seeing that, and we're seeing a huge rise, as most people, in terms of people are coming through mobile devices, so that's one big trend.
When you look at other categories, whether it's in a retailer.com or pure plays, we are seeing that we have consumers across all price points and brands that are interested in shopping online for other reasons, which may be convenience, ease of use, price comparison, whatever it may be.
But we're seeing that trend across all price points there as well.
Yes, I would agree, it's going to be somewhat neutral for the remainder.
We don't anticipate anything at this point being significant.
And if you recall, when the big fluxes were now more than 12 months ago.
Hello, <UNK>.
Good morning.
I'm giving you feedback on a quantitative survey over 1,000 respondents in the US.
And what's interesting is almost half of the consumers, when we look at the bottom two boxes ---+ definitely not interested, not interested ---+ this is the second wave of the survey we're doing.
We're tracking this over time because we thought it was important to understand ---+ there's been a lot of competitive activity in the last six months, and we wanted to track what is the impact of that.
Now, consumers ---+ this is a US representative sample.
They've now been exposed to a lot of activity in the smart watch space.
So, what this is revealing is that about half of them, even knowing what they know now, are not interested.
And you still have about another quarter that are undecided.
So there's still a lot of people that are still either on the fence or not interested.
So that's the first thing.
When you double click by age, obviously there's a higher interest in younger consumers in this.
But also for certain functionalities for older consumers, you still see an interest, but the big difference in interest is coming from younger consumers.
That is, we believe, a fashion that is coming in that category.
Okay.
And we've seen in initial products that we have launched and that are in the marketplace, that there's a trend of younger consumers to simplicity and fashion.
A lot of young consumers also spend a great deal of their time on their screen.
Yes.
So they don't necessarily need the connectivity to a watch.
We all see that.
Whether they are watching videos or attending to social media or things like that ---+ much more challenging to do on a watch.
There are multiple trends.
These two we've talked about are two trends.
The other trend which I had mentioned in my prepared remarks are the appeal to this Heritage collection we've launched.
We know that if you follow social media, there's a big appeal for millennial consumers to this vintage look, so we're seeing ---+ so it's not one size fits all.
What is interesting about the times we're living in is that people now have multiple choices, and there's different trends that do emerge.
You are also seeing handbag companies, for example, that are in the, that have a heritage, bringing back products from their archives very successfully.
And we have done that with our new Heritage collection in Movado.
Okay.
And just my last question is: You called out some strength in the Middle East, I think, specifically, which I thought was unusual given what's going on.
Did that surprise you at all.
Well, we've been developing some really important partnerships in the region and, yes, definitely the region is undergoing a difficulty period, but we seem to be doing better than most, gaining market share, and the market is not disappearing.
There's a reduction in the market on the consumption, but people are still buying watches.
And through our partnerships and the quality of the execution, we have been able to convert more and to gain market share, so it's really a function of outperforming in a difficult market our competitors.
With no additional questions in the queue, I would like to turn the conference over for management for any additional or closing comments.
Thank you.
