Suzanne Rosenberg – Vice President Corporation Communication Efraim Grinberg - President, Chief Executive Officer, Director Sallie A. DeMarsilis - Chief Financial Officer, Principal Accounting Officer Richard J. Cote - Chief Operating Officer, Executive Vice President, Director

Jeff Blaeser - Morgan Joseph & Co., Inc. Kristine Koerber - JMP Securities Jody Kane - Sidoti & Company [David Peterno - David Peterno Company] [William Witcher] - Private Investor

Welcome to Movado Group’s second quarter conference call. (Operator Instructions) I would now like to introduce Suzanne Rosenberg of Movado Group.

With me on the call is Efraim Grinberg, President and Chief Executive Officer, Rick Cote, Chief Operating Officer and Sallie DeMarsilis, Chief Financial Officer. Before we begin I would like to note that this conference call contains forward-looking statements which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors which could cause actual results to be materially different from any future results expressed or implied are discussed in our filings with the SEC. Such forward-looking statements include statements regarding Movado Group’s performance for fiscal 2009 and beyond. We currently expect to update estimates; however the failure to update this information should not be taken as Movado Group’s acceptance of these estimates on a continuing basis. The company may also choose to discontinue presenting future estimates at any time. During the course of today’s conference call management will present certain non-GAAP figures. For a reconciliation of these figures along with information required under SEC Regulation G, please view our earnings press release which has been posted on our website at www.movadogroup.com. Let me now outline the order of speakers and topics for today’s conference cal. Efraim will begin with the highlights of our second quarter, Sallie will then review the financial details, and Rick will provide you with an update on our operating in initiatives along with our financial outlook. We will then be glad to answer any questions you might have. I would now like to turn the call over to Efraim.

Before we discuss our second quarter results, I would like to call your attention to a separate press release we issued this morning which announced that our Chairman will retire at the end of this year and become Chairman Emeritus. In the 47 years since starting our company in 1961 he has been our leader in developing a brand-building reputation with distinctive imaging across a powerful portfolio of brands and geographic markets. Since that time we’ve grown our business from $175,000 in sales to over $500 million in sales last year. Over the course of building our company the Chairman has deeply cared about the employees and shareholders that have supported Movado Group. I have been fortunate to learn the watch business from the ground floor up under the tutelage of a great visionary and business man. As we build on the solid foundation of the mission and the values that he established, we look forward to continuing to grow Movado Group and further strengthening its position as a leading company in the watch industry. Now let me turn to our second quarter results. Given the very strong performance that we are comparing against last year and the further deterioration that has taken place in domestic economy, we are pleased with our performance for the quarter and year-to-date period. In addition, the decisive actions we’ve taken to reduce our expenses and improve productivity will strongly position our company to capitalize in the future growth prospects that much more quickly as the economy recovers. Our expense reduction program is expected to generate $25 million in annualized cost savings and is designed to accelerate our ability to achieve our mid-teen operating margin target. We continue to manage through the strong macroeconomic headwinds in the US which has been somewhat offset by the diversification of our business model and the strength of our growing international presence. We continue to gain market share with a combination of strong product innovation, a powerful presence at the point of sale, and consistent marketing support and advertising investment across our spectrum of brands. In the second quarter our licensed brands delivered a very strong performance with a 28% increase in sales over last year with strong gains recorded both internationally and domestically. These results reflect gains in each of our licensed brands: Coach, Tommy Hilfiger, HUGO BOSS, Juicy Couture, and Lacoste. In addition to the cache of these powerhouse brands our license portfolio is geographically diverse as we develop our businesses in all regions and countries where the parent brand has demonstrated success. While we have seen some slowdown on a macroeconomic level in Europe, our trends at retail remain strong. We continue to introduce a great amount of product units with compelling price value propositions while capitalizing on the power of each parent brand with the European consumer. Our luxury category, Concord and Ebel, recorded a low single-digit sales decline reflecting the challenging domestic environment partially offset by international sales gains. Concord’s C1 Tourbillion Gravity which was previewed to retailers in the first quarter and which retails for over $300,000 has received a tremendous amount of press coverage and allows the brand to position itself in the ultra high-end of the edgy and modern watch arena. There is strong retailer and consumer demand for the C1 family and the worldwide buzz particularly for watch aficionados has been terrific. The high end of the men’s mechanical watch market remains overheated and this does continue to impact our lead times and deliveries. Nevertheless demand for the C1 collection is very strong and is outpacing production. Ebel was challenged in the US given the current economic environment as retailers focused on reducing inventory and limiting replenishment. This was partially offset by international sales gains with most of the growth coming from Europe, the Middle East and Russia. During the second quarter we introduced three major branding initiatives in Ebel: A new luxury display system for the point of sale, a beautifully redesigned image building website, and a new consumer brochure. Together these three important communication tools comprise a global approach to build on the prestige of Ebel following the recent introduction of the brand’s new global advertising campaign featuring Giselle. Our accessible luxury segment comprised of Movado and ESQ has been impacted the most by the slowdown in the domestic economy as this category has the greatest exposure to the North American market. Our retail partners are working within shorter ordering windows to better manage inventory levels ahead of the fall season which will likely shift some of our sales from the first half to the second half of the year. Nevertheless Movado has maintained a leadership position in its category and we are continuing to outperform others in the space. We are taking the proper actions to drive this business in the important second half with a steady flow of new products and strong marketing support. Our unified brand strategy which leverages the power of Movado across wholesale and retail strongly positions Movado as we increase productivity and tailor our assortment to our retail partners’ respective shoppers. As you know, during the second half of last year we reviewed our US wholesale distribution and saw an opportunity to establish a more selective distribution network. We’ve since completed our targeted 35% reduction of wholesale doors and we are very pleased with retailers’ reactions to our strategy. In addition to eliminating the tail-end of our distribution, we had also reduced our exposure to several retailers who’ve since declared bankruptcy and/or been faced with financial difficulties. Obviously these closures impacted our first half sales results; however we’re already beginning to see the benefits of a more selective distribution through increases in productivity per door. With this strategy Movado is gaining and even larger presence in the major retailers in the United States. In accordance with our strategy we’ve begun implementing segmentation initiatives that will roll out through our new fall product collections. We’ve tiered our distribution and merchandise to allow consumers to see Movado product that is relevant to them and where they choose to shop. This fall we are introducing Harmony which carries a more moderate entry level price beginning at $495 while also delivering the new Visio Chronograph that retails for $3,000. Additionally, in China and in our Movado boutiques we are introducing Movado Red Label, a collection of mechanical watches that retail from $1,250 to $2,000 with limited edition pieces retailing at significantly higher prices. The same level of prestige and luxury seen in our product and point of sale presence has been translated into beautiful new advertising campaigns for the Movado brand which recently launched in major fall fashion publications. The Movado campaign celebrates our sponsorship of the arts with brand ambassadors such as Kerry Washington and Mikhail Baryshnikov and a new Series 800 advertising has been updated with bold powerful photographs of Tom Brady and Derek Jeeter. Our retail environment is very promotional with department stores faring better than the middle of the mall and shoppers looking for bargains. We saw this in our retail segment as our outlet business more than offset declines in our Movado boutiques. We are committed to delivering a distinctly branded luxury experience and properly positioning our boutiques for long-term success. Fiscal 2009 is a transition year for this business as we tailor our Movado watch assortment to the boutique shopper with the newest and most exclusive watch styles and refocus our jewelry collections. We are also very pleased to announce that we have appointed [Diane Fox] as President of Movado Boutiques. Diane brings more than 20 years of branded specialty retail experience to her new role, most recently at Liz Claiborne where she was the Vice President of the Specialty Retail Division. We look forward to benefiting from her strong merchandising skills and retail insights as we execute our strategy of delivering a luxury-branded shopping experience in our boutiques that is distinctly Movado. ESQ continues to be effected by the domestic economic slowdown further exacerbated by bankruptcies and financial challenges faced by certain retailers in this channel. Importantly, we have taken the appropriate precautions designed to mitigate any business credit risks. Even with these pressures there continues to be growing opportunity in the $300 to $800 price category. Products introduced at [Boswell] earlier this year have been shipping including Fusion on a rubber strap and the new ladies Fusion with diamonds. We’ve also appropriately introduced sharp entry-level price points such as Harrison retailing for $295. Focused branding efforts include compelling visuals which are very strong and centralized at the point of sale to excite shoppers. We continue to manage through the difficult operating environment in the US while benefiting from the strength of our international business. In the second quarter international markets generated 45% of our total sales. We are entering the second half of the year on track to achieve our financial objectives. Initiatives taken to enhance productivity are beginning to take hold and as we head into the fall season our inventories at our retail customers are in excellent shape. We maintain our focus on the long-term success of our brands and are business around the world. This commitment combined with our financial strength and flexibility strongly positions Movado Group for the future. I would now like to turn the call over to Sallie for a review of our financial results. Sallie A. DeMarsilis: Sales for the second quarter were $129.7 million or 7% below prior year. Net sales for last year included $8.3 million of excess discontinued inventory. Excluding the sales of discontinued products, net sales decline by 1.1%. Sales were favorably impacted by the effect of foreign currency. On a constant exchange rate basis sales decreased by 6.2%. The balance of my remarks as they relate to sales will exclude the excess discontinued product sales recorded last year. Sales in the wholesale segment decreased by $1.4 million or 1.3% to $107 million. The net decrease was the result of lower sales in the luxury and accessible luxury categories somewhat offset by growth in our licensed brand category. The luxury category was below last year by $700,000 or 3.3%. The accessible luxury category was below prior year by $9.3 million or 18.2%. The decline in the accessible luxury category is primarily in the US where the retail environment has been challenging. Our retail partners are managing their inventories and placing their orders closer to the selling season which will likely shift purchases from the first half of the year to the second. Additionally, we have reduced the number of doors in connection with our Movado brand strategy. All licensed brands were above prior year with growth in both the US and the international markets. As a category licensed brands grew 28.5% from last year. The US wholesale business was below prior year by 13.7% and the international wholesale segment was above prior year by 11.8% Net sales in the retail segment were $22.7 million or flat to last year. As of July 31 the company operated 29 Movado boutiques and 31 outlet stores. Gross margin was 64.7%. Excluding the liquidation of discontinued product last year gross margin in the year ago period was 63.6%. The increase of over 100 basis points was driven by higher margins in the accessible luxury and licensed brand categories. Second quarter results include a $2.2 million charge related to severance associated with our previously announced expense reduction program. The balance of my comments as they relate to the quarter will exclude this charge for comparative purposes. Operating expenses were $70.6 million or 5.3% above last year. The increase of $3.6 million includes a $2.1 million negative impact from foreign exchange and higher accounts receivable related expenses of $800,000 resulting from favorable settlements in the prior period. Income taxes were provided at a 24.6% effective tax rate versus a 24.9% rate in the prior year. Net income was $9.8 million versus $12.3 million last year. Earnings per share were $0.39 as compared to $0.45 last year. Earnings benefited from a decrease in the number of diluted shares outstanding due to our share repurchase program. Looking now at our year-to-date results. Sales for the six month period were $231 million. Net sales for last year included $11 million of excess discontinued inventory. Excluding the sales of discontinued products, net sales increased by 0.5%. On a constant dollar basis and excluding the sales of discontinued products last year, net sales decreased by 4.7%. Once again let me remind you that the balance of my remarks as they relate to sales will exclude the excess discontinued product sales reported last year. Sales in the wholesale segment increased by $2.8 million or 1.5% to $192.3 million. The increase was driven by higher sales in the licensed brand category somewhat offset by lower sales in the luxury and accessible luxury brand categories. The US wholesale business was below prior year by 12.4% and the international wholesale segment was above prior year by 16.1%. Net sales in the retail segment were $38.8 million or below prior year by 3.9%. Gross margin was 64.5%. Excluding the liquidation previously mentioned gross margin was 63.3% for last year. The increase of over 120 basis points was primarily driven by the same category as discussed for the quarter. Year-to-date results include the $2.2 million charge related to severance associated with our previously-announced expense reduction program. The balance of my comments for the six month period will exclude this charge for comparative purposes. Operating expenses were $134 million or 6.4% above last year. The increase of $8.1 million includes a $4.3 million negative impact of foreign exchange. Additionally there were higher payroll and related expenses of $1.8 million primarily to support international and licensed brand growth. Income taxes were provided at a 25.4% effective tax rate versus a 24.2% rate for last year. Net income was $11 million versus $14.7 million last year and earnings per diluted share were $0.42 compared to $0.54 last year. Now taking a quick look at our balance sheet, cash as of July 31, 2008 was $85 million compared with $113 million last year. During the six month period the company utilized approximately $39 million to repurchase shares of common stock. Accounts receivable of $96 million is below prior year by $4 million. In constant dollars our accounts receivable are below prior year by 7.2%. Inventories of $239 million increased from $216 million last year. In constant dollars the inventory increased over last year by 3.4%. The inventory level also reflects a plan to build in core products for the upcoming holiday season. Additionally, as I mentioned earlier, our major retail partners are managing their inventories and placing their orders closer to the selling season. Total debt was $60 million versus $68 million last year. Capital expenditures for the year were $11 million and depreciation expense was $8.6 million. We expect our capital expenditures for the full year to be approximately $29 million which includes spending associated with our ERP system. Finally, cash used in operations was $34 million primarily the result of inventory build for the upcoming holiday season and longer manufacturing lead time. Last year we reported a positive cash flow from operations of $7 million resulting from improvements in accounts receivable and sales of our excess discontinued products. In summary, we are pleased with our overall financial performance delivering a very solid P&L and maintaining a sound balance sheet. Now let me turn the call over to Rick. Richard J. Cote: To lay a strong foundation for future growth we continue to take important actions to improve efficiency and effectiveness to our organization. As previously announced our expense reduction plan is expected to generate $25 million in annualized cost savings. This action together with continued gross margin improvement will position us to achieve our mid-teen operation margin objective on a more accelerated basis. I will provide some more details on our outlook later in my comments. Importantly, our balance sheet remains strong and we will continue to leverage our solid financial flexibility to invest in the future growth of our business. As you know we have been focused on three key operating initiatives for fiscal 2009. Our expense reduction plan is now a fourth key initiative that we are focused on implementing over the remainder of this year. I would like to take a moment to review these four initiatives and the progress we are making on each. First, we are executing our Movado brand strategy across our wholesale and retail channels. We have been working closely with our retail partners and have completed the closing of 1,400 wholesale doors. These door closings obviously impacted the sales of Movado during the first half of the year. Nonetheless we are already seeing productivity per door improving and we would expect this to continue over the near term and beyond. Our actions have received a very positive response from our retail partners particularly as we head into the important holiday selling season. Second, we are focused on maximizing growth opportunities in our existing businesses particularly in our licensed brand portfolio. During the quarter licensed brands continued to fuel our overall sales growth. We would expect this to continue throughout fiscal 2009 not only as these brands increase in scale but also because their strong international presence provides a counter-balance to the slowdown taking place in the domestic economy. Third, the multi-year rollout of a worldwide enterprise resource planning system. The intent is to go live with our ERP implementation early next year. This is an important undertaking for our company and will ultimately provide us with globalized standard processes and a fully integrated end-to-end view of our multiple businesses. Fourth is our most recently launched initiative is our expense reduction plan. While the current economic climate certainly provided us with an opportunity to accelerate our timing on these types of cost initiatives, this was a necessary action to better align our cost structure and enhance profitability in a sustainable manner. Our actions will create a stronger and leaner organization that will operate more efficiently. The components of the program included a 10% payroll reduction which as we discussed in our August 7 press release was focused on our corporate and shared service departments predominantly in our North American and European operations. This includes the consolidation of certain geographical functions such as distribution, finance, administration and procurement. Other aspects of the plan include the active review, management and deduction of all discretionary expenses and controllable costs. As you know, in April of this year we completed a 1 million share repurchase program that was initiated in fiscal 2008. Then during the first quarter of fiscal 2009 we initiated a new repurchase program to buy back up to 1 million additional shares of our company’s common stock. To date, with both programs, we have repurchased a total of 1.9 million shares at a total cost of approximately $39 million at a weighted average price of $20.08 per share. Now I’d like to turn to our financial outlook. As I mentioned earlier, our expense reduction plan is expected to result in annualized pre-tax cost savings of approximately $25 million or 8% of the company’s operating expenses. Approximately half of these savings will come from payroll deductions and half will come from other expense reductions. We expect to realize approximately $6 million of these savings this year fiscal 2009. This year’s savings will be offset by a total pre-tax charge of approximately $9 million related to the completion of this program which will be recorded throughout fiscal 2009. Included in this charge are the costs of a benefit program associated with the planned retirement of our company’s Chairman which was announced in a separate release this morning. Excluding the charge of approximately $0.24 per diluted share and the cost savings of approximately $0.16 per diluted share associated with the expense reduction plan, we are maintaining fiscal 2009 diluted earnings per share guidance of approximately $1.65 to $1.72 based on a projected tax rate of 24%. Our guidance also continues to reflect a cautious outlook on the US economic environment and favorable foreign exchange rates. As a reminder, in fiscal 2008 our company reported adjusted diluted earnings per share of $1.71 which excluded a net realized tax benefit in an accrual for part returns recorded in the fourth quarter. Beyond our guidance for fiscal 2009 I’d like to provide you with some additional color on the future benefits of our expense reduction plan. For fiscal 2010 we expect to realize the full annualized pre-tax cost savings of approximately $25 million. Keep in mind typical increases we experience in operating expenses each year and in fiscal 2010 we would expect to incur certain expenses related to our ERP implementation which are one time in nature. As a result we believe that our cost savings initiative will enable us to approach an operating margin in the 15% arena in fiscal 2010. With that I would now like to open up the call for your questions.

(Operator Instructions) Our first question comes from Jeff Blaeser - Morgan Joseph & Co., Inc. Jeff Blaeser - Morgan Joseph & Co., Inc.: Can you give us an idea of the timing of the cost reductions second half of this year and next year in terms of like $6 million per quarter, percent of sales? And then are there going to be any other impacts to the business? Does this allow you to increase R&D, advertising or is it as simple as taking $25 million out of our expectations next year? Richard J. Cote: I think from a standpoint of its $25 million on full year impact. Obviously the payroll related expenses which are about half of the cost certainly would be pro rata each and every quarter. The other expenses would not quite be pro rate each and every quarter because some of those expenses are booked as a percentage of sales and things of that nature. But I think if you use it as a general guideline that pretty much pro rate per quarter that’s probably a safe bet. Number one. Number two is for this year the $6 million will basically be incurred and we will disclose at each of the quarters. Again I think payroll, most of it this year will be certainly some in the third quarter but more in the fourth quarter so a bit more of a 60/40 type of split that may be the case. But again we will disclose that during the rest of the quarter. Clearly from a company, it does give us the opportunity to invest as we have in the past including we would expect that this would drop from a standpoint of reducing our expenses, there are other expenses that we will incur. We talked about those in my comments but this certainly does give us the opportunity of further investing as we need to and obviously taking sales growth to invest. I think the best measurement is one I’ve outlined that next year we would expect to have our operating profit basically in the arena of 15% range and that’s probably the best guidance of how to look for next year. Jeff Blaeser - Morgan Joseph & Co., Inc.: For the cost reduction plan, is this part of the longer term plan from the beginning? Because I remember I think the old plan was to get to 15% on a longer basis. Now would this expand your long term EBIT margin goals as an additive to that? Richard J. Cote: I think the first thing to deal with is yes, this is on an accelerated timing. As you know we talked about achieving 15% over the next handful of years and we said the second part of that plan would be more driven by expense management. Clearly we’ve accelerated that but let’s focus in on the first piece. And like I said next year we’ll be in the arena of the 15%. Our goal is over the next couple of years to get to that level and then obviously achieve that and then we’ll clearly talk about our next level of goals.

I’d like to add to Rick’s comments, and I think we’ve highlighted it in our earlier press release and then as well as Rick’s comments, that we took the impotence of a more challenging economic environment to accelerate our cost reduction efforts. So it certainly we believe will accelerate our performance going forward.

Our next question comes from Kristine Koerber - JMP Securities. Kristine Koerber - JMP Securities: As far as the shortened lead time by retailers, what are we talking as far as how close they’re buying to need and does this shift more sales into the fourth quarter?

I think it’s a little too early to tell that whether it shifts sales into the fourth quarter, but we believe certainly and we know at the retailers are obviously watching their inventory levels very closely and are trying to manage on a closer and more just-in-time operating basis. But obviously they have to begin taking in inventory for the holiday season within the third quarter as well as the fourth quarter which is normal for us. Certainly it’s a well-known fact that retailers are trying to take the inventory closer to the actual selling time rather than in advance. Kristine Koerber - JMP Securities: Looking at international trends, it sounds like your business is good internationally despite the macro slowdown. I’m just trying to clarify. Have you seen any changes internationally from the last quarter?

On the licensed brand side we have certainly seen the economic environment has changed but our sell-through has continued to be strong. But you are seeing some slowdowns economically in markets like the UK and like Spain. But we continue to increase market share in both of those markets and we continue to remain very strong in our international market place.

Our next question comes from Jody Kane - Sidoti & Company. Jody Kane - Sidoti & Company: Just on the market share of the Movado brand, is there a way to quantify or to talk a little bit about the strength of the Movado brand and how it’s doing in light of the change that you made?

In July which is the first month really where we’ve seen our door closures take hold and really be completed, we have seen increased productivity at our points of sale taken as a whole. Movado has a significant market share in this market place of watches priced between $500 and $1,500 and it has maintained and grown that market share in most cases. Very strong in the department store channel and extremely strong in the chain jewelry channel as well. Jody Kane - Sidoti & Company: Are there any new products coming along the Movado line? And how much of an impact is that going to help to offsetting door closures and moving into the new doors, and how well are people interested in these new Movado products?

There’s certainly a significant amount of new products coming this fall and even a greater level next year. Product innovation is one of the things that continues to drive the Movado brand and it certainly becomes even more important in more challenging economic times. So we are very focused on product innovation and continuing to innovate along the product lines. I mentioned several of the new products that are being introduced for this fall as well as our focus on product segmentation as part of the unified branding strategy for the Movado brand. So we’re introducing both more accessible price points for our distribution that deals with the more price point minded consumer as well as more luxurious price points for the Chinese market place as well as our boutiques and our higher end distribution. I think that’s one of the very positive things that came out of our very in-depth analysis and to our unified brand strategy both for our boutiques and our wholesale business for the Movado brand. We’re also working for next year on some exciting products in Series 800 at more accessible price points as well. Jody Kane - Sidoti & Company: So we’re looking at less doors, better productivity and more product introductions or a wider assortment of products now than ever before?

I think that you just summarized the message very clearly. Jody Kane - Sidoti & Company: And finally, on the Chinese market. How many quarters have you been in there or have you been expanding into China? How much more is there to expand into?

We started in China about three years ago. We have been working with a distributor in the market place. I think we announced earlier this year that this year would be a transition year for us in China. We’ve had our own operation but next year we will become the official importer of our watches into China which will give us a greater direct control over the market place as well as a great opportunity to really accelerate the growth of our brand in China. And this is really the culmination of a several-year effort in that direction.

Our next question comes from [David Peterno - David Peterno Company]. [David Peterno - David Peterno Company]: Before I ask my question I’d like to congratulate Gerry if he’s on the line on your retirement. It’s been a long and very profitable association for me.

I will communicate that message to him. Thank you David. [David Peterno - David Peterno Company]: He’s not listening?

I’m sure he’s listening. [David Peterno - David Peterno Company]: My question revolves around the cost savings program. You touched on it Efraim in the answer to somebody else’s question. You’ve been talking about reducing overhead as a percent of sales for a long time. Five, six, seven years, something like that. So now you’ve bitten the bullet and instead of taking a multi-year plan, you’ve done it all bang in one bunch. And I think that’s fine but why now?

I think that as I said earlier we took the impotence of a more challenging economic environment and at a time when it becomes more challenging to accelerate your top line to say that if our top line is not going to accelerate as quickly as we would like and cover and reduce our overhead as a percentage of sales, then we had to take an aggressive action to do that. And that’s why we decided to do that. We believe it’s the right thing for both the short term and the long term. We’ve flattened our organizational structure so we’ll have less layers of reporting and we’ve taken some decisions that we now have the capability to do. For example we now have a duty-free operation in our distribution center in New Jersey so we’re able to consolidate our Canadian operations into New Jersey from a distribution and an accounts receivable point of view. And that will promote a significant amount of cost savings. We just felt that we weren’t going to be able to grow our way into a lower percent sales although we still obviously plan on continuing to grow the business and we are, but to get to the right level or a more efficient level we had to take a severe, aggressive direction in terms of our expense management and expense control. [David Peterno - David Peterno Company]: I applaud the action. Part B of this question. What’s the appropriate tax rate for those of us outside the company in their models to use on this $25 million? I believe it’s largely domestic rather than international so I suspect that the tax rate is a higher number than the 24% or 25% number the company’s using overall. Is that correct? Richard J. Cote: Yes, and if you look at the numbers, if you look at the $9 million and $6 million and then you translate that to the I believe it’s the $0.24 and the $0.16 we’ve outlined in there, you’ll basically see that that’s a tax rate in the 30% to 32% arena because you’re right. When you’re done, that is a blended rate from a standpoint of North America as well as European. They are different tax rates. So it is higher than the company average of 24% and again more in that 30% to 32%. That’s why I tried to give you the impact on EPS standpoint so that you could calculate that.

Our next question comes from [William Witcher] - Private Investor. [William Witcher] - Private Investor: Efraim, I’d also like to echo what David said and pay tribute to your dad. I haven’t been a shareholder quite as long as David but have certainly been around for the formidable years and I understand the struggles and challenges and how far you’ve come. So I wish your dad very well in his retirement.

Thank you very much Bill. [William Witcher] - Private Investor: It seems to me you’ve really struggled over the years with the boutiques and now you’ve put in someone new to head that whole division. What are your goals for that division in terms of profitability, in terms of stores? I’m sure there’s been some redefinition with a new chief in that operation.

Basically we believe that the boutiques are vital to the overall strength of the Movado brand. We’ve done a tremendous amount of research on that and it’s actually been proven that the Movado performed significantly better to our competitors and has a larger market share in markets where we have boutiques. But we do want them to be profitable and we are very focused on making that a profitable venture. It is obviously too early with a new head of the boutiques on board but we are optimistic that with our strategy that we just really implemented at the very beginning of this year, we are headed in the right direction of focusing on product segmentation, focusing on watches, and reinvigorating our jewelry design. But we will really see that all take hold next year. I have to remind you that the boutiques are profitable on a four-wall basis and it’s really the investment that we make on the marketing front as well as the general overhead that we apply to the boutiques. But we do believe that they are a vital and important part of the future of the Movado brand especially with a more limited distribution in our wholesale business. I think that if the economy turns around as well as our strategy takes hold, we’re going to see a greater improvement in that area. [William Witcher] - Private Investor: Can you give us some tangible evidence in your thinking that foreign sales may actually come through in the second half to balance out what we’ve seen as reductions in the first half or is it just sort of a hope that these things will come through, especially with the UK and Spain being [inaudible]?

We have a highly diversified international market, and again you’ve got to remember that we have nine brands. We don’t really on the international side have any major markets like the United States for example. So it’s diversified throughout Europe; it’s diversified throughout the Middle East which is one of our strongest markets; Latin America, Caribbean, Canada, as well as Asia. Are we expecting to see some slowdowns in certain markets? Yes. That is built into our expectations. I also have to tell you that on the domestic front we believe that as you look at the fourth quarter of this coming year we’re obviously comparing ourselves to a weaker fourth quarter last year. The first half of last year was extremely strong. So we think there are opportunities domestically as well in the second half of the year. So I wouldn’t just count on the international side of the business. I think we have to have a well balanced approach to our business we generally have had. We’ve always had a diversified business model from a branding point of view and I think the thing that’s happened over the last year is it’s become even more diversified on a geographic point of view and I think that’s been very good for the company.

Our final question comes from Kristine Koerber - JMP Securities. Kristine Koerber - JMP Securities: Regarding your Movado brand and bringing down the price points, how do you manage that without tarnishing the long-term image and will it have any impact on ESQ?

I want to clarify something. We’re not bringing down the price points. What we’re doing is bringing new product innovation to some of the entry level price points of the Movado brand. So the Movado brand has had women’s watches for example like the Harmony at $395, $495, $595 and all we’re doing is making sure that we’re able to segment the distribution for those products properly and then continue to innovate in those product categories. So as I said earlier, Movado it’s sweet spot is $500 to $1,500. That doesn’t mean that we won’t have several watches at $395 and $495, which I guess is $500, as well as watches between $1,500 and $5,000 that maintain the prestige and image of the brand. The boutiques also do a significant effort in enhancing and continuing to build upon the Movado brand image with better product and higher end product. On the ESQ side I think one of the things that you also see is that we are expanding again our price points a little bit at the lower end of that spectrum, $295 and $250, and just slightly again with new innovation and very successfully as well.

That concludes our question and answer session for today. I’ll now turn the call over to management for any closing comments they may have.

I would like to thank all of you for participating today. We remain focused on what we have to do in the current operating environment but we also remain focused on the long term, ensuring that our brands remain strong and that we continue to invest behind new product introductions, innovation and compelling marketing programs. I’d like to thank all of you for your support and thank you for participating today.