Movado Group (NYSE: MOV), maker of watches, reported numbers for the fourth quarter. Really bad numbers. Net sales dropped over 32%. For the bottom line, there was a net loss of $0.42 per share on an adjusted basis. In last year's Q4, Movado generated adjusted income of $0.40 per share. That is one hell of a drop. Furthermore, the market wasn't even close to anticipating this ugly performance. According to this source, analysts thought that the company would only bleed about $0.02 per share.

You know, I haven't worn a watch in a long time. Maybe a lot of people are thinking like me, that they don't really need watches since we have so much access to clocks via cell phones and other devices (I don't own a cell phone, but I'm content to simply seek out a clock if I'm out and about). Of course, I'm being a little facetious here. Movado is merely suffering through a bad economy. And it's perhaps in need of some better management. The company sells timepieces based on licensed brands such as Coach (NYSE: COH) and Tommy Hilfiger. Consumers are apparently satisfied with purchasing cheap, non-branded watches. Can't blame them.

Apax Partners, which took clothier Tommy Hilfiger private in 2006 and had planned to take the company public again soon, has shelved (subscription) those IPO plans in light of the weakened capital markets.

The company said that, "Considering recent volatile market conditions, management and shareholders decided to postpone an IPO process until such time that market conditions have stabilized".

Regardless of when the IPO takes place, the $1.6 billion buyout of the company is a shining example of the value-adding changes that buyout shops can make. After Apax took it private, the company moved its headquarters to Amsterdam, and let its U.S. sales plummet by 50% in one-year, focusing instead on the European market where the label is trendier and able to sell at higher price-points.

As recently as October, it was expected that Apax would be able to book a $1.7 billion profit on the company. As strong as the performance has been of late, I can't help wondering whether Hilfiger would do best remaining private. Even with improved financial statements, Hilfiger is best-known as a brand that was iconic during the 1990's, and Apax might have a hard time getting investors to pay up for that.

MAJOR PAPERS:

• A former Royal Bank of Canada (NYSE: RY) trader alleged that some employees "miss-marked" bonds to increase profits at the New York office's investment banking unit, the Wall Street Journal reported.
• The WSJ also reported that private-equity firm J.C. Flowers & Co is in talks with UK lender Northern Rock, but has not confirmed it will launch a bid for the troubled firm wrapped up in the subprime meltdown.

OTHER PAPERS:

• The New York Times reported Merrill Lynch & Co Inc (NYSE: MER) CEO Stanley O'Neal contacted Wachovia Corporation (NYSE: WB) CEO G. Kennedy Thompson last week to discuss the possibility of a merger between the companies, according to inside sources; Merrill's board has reportedly started considering candidates to replace him.
• The Times also reported that designer Tommy Hilfiger agreed to sell his biggest clothing line exclusively at Macy's Inc (NYSE: M). Under the agreement, Mr. Hilfiger would remove his clothing lines from stores like The Bon-Ton Stores Inc (NASDAQ: BONT) and Dillard's Inc (NYSE: DDS).

Less than three years after taking Tommy Hilfiger private, Apax Partners is looking to cash out -- and book a cool $1.7 billion in profit. The company is reportedly exploring an IPO for the fashion label.

When I first saw that Hilfiger had appreciated so much in the past couple years, I was surprised. Tommy isn't part of the U.S. fashion industry in any meaningful way anymore, but according to (subscription) The Wall Street Journal, that is by design. The company moved its headquarters to Amsterdam, and let its U.S. sales plummet by 50% in one-year, focusing instead on the European market, where the label is trendier and able to sell at higher price-points.

As The Journal says, "So it may makes sense for Apax to reap some of its gains; the fashion business is fickle, as Hilfiger's boom-to-bust cycle in the 1990s shows. But new outlets and a greater focus on wider European profit margins should keep driving profit growth. This turnaround could yet turn into a growth story."

But you have to wonder. Is letting the U.S. market go in favor of greater international expansion something that would have been impossible to do as a public company? Did Hilfiger's board of directors leave a ton of money on the table by letting the company be taken private, rather than making these changes as a public company?

You have to admire the courage of senior management teams who agree to present at financial conferences, especially when the president of the company is unloading stock, and the best spin the CFO can put on the numbers is that they aren't as bad as they used to be. Such is the case with G-III Apparel Group, Ltd. (Nasdaq: GIII), which manufactures and distributes higher end coats and jackets under label for Calvin Klein, Guess?, Tommy Hilfiger and others, as well as licensed sportswear. G-III licenses jackets for the NHL, NBA, MLB, and dozens of major colleges and universities. They control a brand portfolio to envy. So why is it that the best the company can do is not lose as much money as quickly?

To its credit, G-III has narrowed its losses in 3Q 2007 by almost 60%, down to about $0.05 per share, compared with $0.14 per share a year ago. Net sales for the recent quarter were up 21% to $84 million. CEO Morris Goldfarb was so pleased with the posted loss that was well below what was expected that he has raised FY2007 guidance to $0.90-$0.95 per diluted share based on a $10 million increase in sales to $510 million.

This positive spin does not at all address the problems facing G-III. Are its costs not yet under control? Are its licensing deals structured in such a way that it is difficult to turn a profit? It manufactures team jackets for most major American sports leagues. Surely some of them must be widely popular with sports fans. Yet even CEO Goldfarb admits that sportswear is not yet a "meaningful" contributor to the bottom line. Investors should hope he accelerates his search for meaning and soon.