late March 2001. This new product introduction, which allows Movado to penetrate the growing fashion segment of the watch industry for the first time, has already been met with great customer enthusiasm.  Last year we embarked on a mission to return to our  long-term trend of profitable growth. With the right people and priorities in place, fiscal 2001 marked a very successful year not just in terms of financial performance, but also  in the strength of our core brands, Movado, Concord,  ESQ and Coach; the development of our new businesses,  the Movado Boutiques and Tommy Hilfiger watch brand; and productivity improvements.  To Our Fellow Shareholders: In addition, we continue to realize excellent success in the retail channel, with our Movado Boutiques delivering comparable store sales growth of 27% for the full year.  Our new jewelry line, Radius, and our new gift accessories business also contributed to our strong sales growth. We are especially excited by our expanded signature store design which is reflected in our two newest mall-based boutiques  at the Town Center in Boca Raton, Florida and Riverside Square in Hackensack, New Jersey, and by our broadened product assortment which was introduced in all of our  seven boutiques this past holiday season. We are pleased to report that during our fiscal year ended January 31, 2001, the Company delivered record sales of $320.8 million, record gross margins both in dollars, $197.4 million, and as a percentage of sales, 61.5%, and record EPS of $1.75. In addition, our quarterly results exceeded analysts’ consensus estimates in each of the four quarters for fiscal 2001.  Our $320.8 million in sales last year represents an  8.7% increase over prior year’s sales of $295.1 million.  On a constant currency basis, our sales grew by 10.7%. Gross margins of $197.4 million or 61.5% of sales increased 17.2% over the prior year’s margin of $168.4 million or 57.1% of sales. The improved gross margin level reflects a greater availability of core range product, higher margins  on new model introductions, reduced product acquisition costs due to the strength of the dollar and reduced levels of liquidation sales as we continue to emphasize sales of  discontinued product through our outlet division.  Our strong financial results were driven by robust sales performance in our base businesses – Movado, Concord,  ESQ and Coach – complemented by our focus on business  fundamentals: delivering solid gross margins, improving  our inventory mix and on-time delivery performance, and implementing cost-reduction initiatives, while better leveraging our operating expense infrastructure and generating positive cash flow from operations. Importantly, we continued to invest in our new business strategic initiatives, including the Tommy Hilfiger watch line and the rollout of our Movado Boutique expansion plan, which will provide our Company with new avenues of profitability and future growth. Operating profit for the year rose to $34.1 million or 10.6% of sales as compared to $15.8 million for the prior year. Net income of $20.8 million or 6.5% of net sales  represented an impressive 51.4% increase over prior fiscal In partnership with Tommy Hilfiger, we produced a new line of watches that was launched across the United States in  Annual Report 2001 25 Financial Results