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                                                                   Exhibit 10.39

(JPMORGAN CHASE BANK LOGO)

                                 PROMISSORY NOTE

$37,000,000                                                    December 13, 2005

     For value received, the undersigned unconditionally promises to pay to the
order of JPMORGAN CHASE BANK, N.A. (hereinafter the "Bank") at its offices at
695 Route 46 West, Fairfield, New Jersey 07004, or to such other address as the
Bank may notify the undersigned in writing, the principal sum of Thirty-Seven
Million Dollars ($37,000,000) (the "Note Amount") or, if less, such unpaid
principal amount of each loan (a "Loan") (as recorded on the grid attached
hereto or on any additional pages thereof) made by the Bank to the undersigned
and outstanding under this note on July 31, 2006 (the "Maturity Date"). The
aggregate principal amount of all Loans made by the Bank to the undersigned and
outstanding on this note (the "Outstanding Loans") shall not exceed at any time
the Note Amount; provided, however, during the period commencing on January 31,
2006 and ending on the Maturity Date (the "Post Season Period"), the maximum
principal amount of Outstanding Loans hereunder shall not exceed Two Million
Dollars ($2,000,000) (the "Reduced Note Amount"). In the event that the
aggregate amount of Outstanding Loans exceeds the Reduced Note Amount during the
Post Season Period (the "Post Season Excess"), the undersigned shall immediately
pay to the Bank, without notice or demand, the amount of the Post Season Excess,
plus accrued interest on such Post Season Excess and any other amounts due to
the Bank in accordance with the terms of this note, including any prepayment
pursuant to Paragraph 2 hereof. Failure to pay the Post Season Excess shall be
an Event of Default under this note.

     The undersigned promises to pay interest on the unpaid balance of the
principal amount of each such Loan from and including the date of such Loan to
the last day of the Interest Period thereof at either (i) a floating rate per
annum equal to the Prime Rate (a "Prime Loan"); (ii) a fixed rate per annum
equal to the Adjusted LIBO Rate applicable to such Loan plus 0.625% (a
"Eurodollar Loan"); or (iii) a fixed rate per annum equal to the Money Market
Rate applicable to such Loan (a "Money Market Loan"). Any principal not paid
when due shall bear interest from and including the date due until paid in full
at a rate per annum equal to the Default Rate. Interest shall be payable on the
relevant Interest Payment Date and shall be calculated on the basis of a year of
360 days for the actual number of days elapsed. Any extension of time for the
payment of the principal of this note resulting from the due date falling on a
non-Banking Day shall be included in the computation of interest.

     Anything in this note to the contrary notwithstanding, no Loans shall be
made hereunder, no letters of credit shall be issued by the Bank for the account
of the undersigned ("Letters of Credit") and no drafts shall be drawn by the
undersigned and accepted by the Bank ("Acceptances") if, as a result thereof,
the aggregate unpaid principal balance of all Loans made by the Bank to the
undersigned hereunder plus the aggregate undrawn face amount of all Letters of
Credit, the aggregate unreimbursed amount of all drafts drawn under Letters of
Credit and the aggregate outstanding face amount of Acceptances would exceed the
Note Amount or Reduced Note Amount as applicable for the relevant period.

     The date, amount, rate of interest and maturity date of each Loan and
payment(s) (if any) of principal, the Loan(s) to which such payment(s) will be
applied (which shall be at the discretion of the Bank) and the outstanding
principal balance of Loans shall be recorded by the Bank on its books and

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records (which may be electronic in nature) and at any time and from time to
time may be, and shall be prior to any transfer and delivery of this note,
entered by the Bank on the schedule attached or any continuation of the schedule
attached hereto by the Bank (at the discretion of the Bank, any such entries may
aggregate Loans (and payments thereon) with the same interest rate and tenor
and, if made on a given date, may show only the Loans outstanding on such date).
Any such entries shall be conclusive in the absence of manifest error. The
failure by the Bank to make any or all such entries shall not relieve the
undersigned from its obligation to pay any and all amounts due hereunder.

     1. DEFINITIONS. The terms listed below shall be defined as follows:

     "Adjusted LIBO Rate" means the LIBO Rate for such Loan divided by one minus
the Reserve Requirement.

     "Banking Day" means any day on which commercial banks are not authorized or
required to close in New York City and whenever such day relates to a Eurodollar
Loan or notice with respect to any Eurodollar Loan, a day on which dealings in
U.S. dollar deposits are also carried out in the London interbank market.

     "Code" means the Uniform Commercial Code of the State of New York.

     "Default Rate" means, in respect of any amount not paid when demanded, a
rate per annum during the period commencing on the date of demand until such
amount is paid in full equal to: (a) if a Prime Loan, a floating rate of 2%
above the rate of interest thereon; (b) if a Eurodollar Loan or Money Market
Loan, a fixed rate of 2% above the rate of interest in effect thereon at the
time of demand until the last day of the Interest Period thereof and,
thereafter, a floating rate of 2% above the rate of interest for a Prime Loan.

     "Event of Default" means each of the events stated in Section 7.

     "Facility Documents" means this note or any document executed by the
undersigned or by any Third Party granting support for this note and all other
agreements, instruments or other documents executed by the undersigned or a
Third Party or otherwise executed in connection with this note, whether by
guaranty, subordination or any other credit support, or which is contained in
any certificate, document, opinion, financial or other statement furnished at
the time under or in connection with any Facility Document.

     "Interest Payment Date" means (a) with respect to any Prime Loan, the last
day of each month, or (b) with respect to any Eurodollar Loan or Money Market
Loan, the last day of the Interest Period applicable to which such Loan is a
part and, in the case of a Eurodollar Loan or a Money Market Loan with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.

     "Interest Period" means (a) with respect to any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months thereafter, as
the undersigned may elect or (b) with respect to any Money Market Loan, the
period commencing on the date of such Loan and ending on the last day of the
period for which such Loan is offered, as recorded by the Bank on the grid
hereto; provided, that (i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Loan only, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Loan that commences on the last Business Day of a
calendar


                                       2

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month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Loan initially shall be the date on which such Loan is made and, in
the case of the continuation of a Loan, thereafter shall be the effective date
of the most recent conversion or continuation of such Loan.

     "Liabilities" means all obligations and liabilities of the undersigned to
the Bank or its affiliates of whatever nature, including payment of this note,
whether now existing or hereafter incurred or acquired, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, primary or secondary, sole, joint, several or joint and several,
secured or unsecured.

     "LIBO Rate" means, with respect to any Eurodollar Loan for any Interest
Period, the rate quoted by the principal London branch of the Bank at
approximately 11:00 a.m. London time two (2) Business Days' prior to the first
day of such Interest Period for the offering to leading banks in the London
interbank market of dollar deposits in immediately available funds, for a period
and in an amount, comparable to such Interest Period and the principal amount of
such Eurodollar Loan, as it appears on Page 3756 of the Moneyline Telerate
Markets.

     "Money Market Rate" means, if offered, a rate of interest per year as
offered by the Bank from time to time on any single commercial borrowing during
the period offered on such Loan. The Money Market Rate of interest available for
any subsequent borrowings may differ since Money Market Rates may fluctuate on a
daily basis.

     "Prime Rate" means that floating rate of interest from time to time
announced publicly by the Bank in New York, New York as its prime rate. The
Prime Rate shall be automatically adjusted on the date of any change thereto.

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System.

     "Regulatory Change" means any change after the date of this note in United
States federal, state or municipal laws or any foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks, including
the Bank, of or under any United States federal, state or municipal laws or any
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

     "Reserve Requirement" means, for any Eurodollar Loan, the average maximum
rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during the term of such Loan under
Regulation D by member banks of the Federal Reserve System in New York City with
deposits exceeding one billion U.S. dollars, or as otherwise established by the
Board of Governors of the Federal Reserve System and any other banking authority
to which the Bank is subject, against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against (x) any category
of liabilities which includes deposits by reference to which the LIBO Rate is to
be determined or (y) any category of extensions of credit or other assets which
include Eurodollar Loans. The Reserve Requirement shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.


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     "Third Party" means any third party who supports or is liable with respect
to this note due to the execution of any document granting support or security
for this note, whether by guaranty, subordination or any other credit support.

     2. BORROWINGS AND PREPAYMENTS. The undersigned shall give the Bank notice
of each borrowing request by 12:00 noon, New York City time three (3) Banking
Days prior to each requested borrowing of a Eurodollar Loan and by 12:00 noon
New York City time on the date of each requested borrowing of a Prime Loan or a
Money Market Loan; provided that no Eurodollar Loan shall be in a minimum amount
equal to less than $100,000. The undersigned shall have the right to make
prepayments of principal at any time or from time to time; provided that: (a)
the undersigned shall give the Bank irrevocable notice of each prepayment by
12:00 noon New York City time three (3) Banking Days prior to prepayment of a
Eurodollar Loan, one (1) Banking Day prior to prepayment of a Money Market Loan
and by 12:00 noon New York City time on the date of prepayment of a Prime Loan;
(b) Eurodollar Loans and Money Market Loans may be prepaid prior to the last day
of the Interest Period thereof only if accompanied by payment of the additional
payments calculated in accordance with paragraph 5 below; and (c) all
prepayments shall be in a minimum amount equal to the lesser of $100,000 or the
unpaid principal amount of this note. If the undersigned fails to notify the
Bank, in accordance with the terms hereof, prior to the maturity date of any
Eurodollar Loan or Money Market Loan to continue such Loan as a Eurodollar Loan
or Money Market Loan, such Loan shall be converted to a Prime Loan on its
maturity date.

     3. ADDITIONAL COSTS. (a) If as a result of any Regulatory Change which (i)
changes the basis of taxation of any amounts payable to the Bank under this note
(other than taxes imposed on the overall net income of the Bank or the lending
office by the jurisdictions in which the principal office of the Bank or the
lending office are located) or (ii) imposes or modifies any reserve, special
deposit, deposit insurance or assessments, minimum capital, capital ratios or
similar requirements relating to any extension of credit or other assets of, or
any deposits with or other liabilities of the Bank, or (iii) imposes any other
condition affecting this note, the Bank determines (which determination shall be
conclusive absent manifest error) that the cost to it of making or maintaining a
Eurodollar Loan or a Money Market Loan is increased or any amount received or
receivable by the Bank under this note is reduced, then the undersigned will pay
to the Bank on demand an additional amount that the Bank determines will
compensate it for the increased cost or reduction in amount.

     (b) Without limiting the effect of the foregoing provisions of this Section
3 (but without duplication), the undersigned shall pay to the Bank from time to
time on request such amounts as the Bank may determine to be necessary to
compensate the Bank for any costs which it determines are attributable to the
maintenance by it or any of its affiliates pursuant to any law or regulation of
any jurisdiction or any interpretation, directive or request (whether or not
having the force of law and whether in effect on the date of this note or
thereafter) of any court or governmental or monetary authority of capital in
respect of the Loans hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
the Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request).

     4. UNAVAILABILITY, INADEQUACY OR ILLEGALITY OF LIBO RATE. Anything herein
to the contrary notwithstanding, if the Bank reasonably determines (which
determination shall be conclusive) that:

     (a) quotations of interest rates for the relevant deposits referred to in
the definition of LIBO Rate are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining the rate of interest for
a Eurodollar Loan; or


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     (b) the definition of LIBO Rate does not adequately cover the cost to the
Bank of making or maintaining a Eurodollar Loan; or

     (c) as a result of any Regulatory Change (or any change in the
interpretation thereof) adopted after the date hereof, the principal office of
the Bank or the lending office is subject to any taxes, reserves, limitations,
or other charges, requirements or restrictions on any claims of such office on
non-United States residents (including, without limitation, claims on non-United
States offices or affiliates of the Bank) or in respect of the excess above a
specified level of such claims; or

     (d) it is unlawful for the Bank or the lending office to maintain any
Eurodollar Loan at the LIBO Rate;

THEN, the Bank shall give the undersigned prompt notice thereof, and so long as
such condition remains in effect, any existing Eurodollar Loan shall bear
interest as a Prime Loan and the Bank shall make no Eurodollar Loans.

     5. BREAK FUNDING PAYMENTS. In the event of (a) the payment of any principal
of any Eurodollar Loan or Money Market Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan or Money Market Loan other
than on the last day of the Interest Period applicable thereto, or (c) the
failure to borrow, convert, continue on the date specified in any notice
delivered pursuant hereto, then, in any such event, the undersigned shall
compensate the Bank for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan or Money Market Loan, such loss, cost or
expense to the Bank shall be deemed to include an amount determined by the Bank
to be the excess, if any, of (i) the amount of interest which would have accrued
on the principal amount of such Eurodollar Loan or Money Market Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Eurodollar Loan or the Money Market Rate that would have been applicable to
such Money Market Loan, as the case may be, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Eurodollar Loan or Money Market Loan), over
(ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which the Bank would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of the Bank
setting forth any amount or amounts that the Bank is entitled to receive
pursuant to this Section shall be delivered to the Bank and shall be conclusive
absent manifest error. The undersigned shall pay the Bank the amount shown as
due on any such certificate within 10 days after receipt thereof.

     6. BANK'S RIGHT OF SETOFF. The Bank retains all rights of setoff that it
may have under applicable law or contract, including, without limitation, at its
option, to setoff balances (general or special, time or demand, provisional or
final) held by it for the account of the undersigned at any of Bank's offices,
in dollars or in any other currency, against any amount payable under this Note
which is not paid when due (regardless of whether such balances are then due to
the undersigned).

     7. EVENTS OF DEFAULT. If any of the following events of default shall occur
with respect to any of the undersigned or any Third Party:

     (a) the undersigned shall fail to pay any principal, interest or any other
amount payable under this note, or any other Liability, as and when due and
payable; or


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     (b) the undersigned or any Third Party shall fail to perform or observe any
covenant or agreement contained in any Facility Document, and such failure shall
continue for 30 consecutive days; or

     (c) the undersigned or any Third Party shall fail to pay when due any
indebtedness in excess of $5,000,000 or more (including but not limited to
indebtedness for borrowed money) or if any such indebtedness shall become due
and payable, or be capable of being due and payable at the option of the holder
thereof, prior to the scheduled maturity thereof; or

     (d) the undersigned or any Third Party: (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; (ii) shall make an assignment for the benefit of creditors;
(iii) shall commence any proceeding or file a petition seeking relief under any
bankruptcy, insolvency, reorganization, receivership, dissolution, liquidation
or other similar Federal, state or foreign law or seeking the appointment of a
receiver, trustee, custodian, conservator or similar official for all or a
substantial part of its property or (iv) shall have any such proceeding
commenced or petition filed against it and the same shall remain undismissed for
a period of 30 days or shall consent or acquiesce thereto; or

     (e) the undersigned or any Third Party shall merge or consolidate with or
into, or convert into, any other legal entity; or

     (f) any Facility Document shall at any time and for any reason cease to be
in full force and effect or shall be declared null and void, or the undersigned
or any relevant Third Party shall deny or contest any further liability or
obligation thereunder or the validity or enforceability thereof or of any lien
or security interest created thereby; or

     (g) any lien, mortgage, pledge, security interest or other encumbrance of
any kind shall be created or imposed upon any property or asset of the
undersigned or any Third Party without the Bank's written consent thereto,
except as permitted pursuant to Section 8.3 of the Credit Agreement dated as of
December 15, 2005 among the undersigned (as Borrower), the Lenders signatory
thereto and the Bank (as Administrative Agent, Swingline Bank and Issuing
Agent); or

     (h) any action or proceeding before any court or governmental agency or
authority which involves forfeiture of any property or assets of the undersigned
or a Third Party shall have been commenced or if any such forfeiture or other
seizure or assumption of custody or control over such assets by any court or
governmental agency or authority shall occur; or

     (i) one or more verdicts, judgments, decrees or orders for the payment of
money in excess of $5,000,000 in the aggregate shall be rendered against the
undersigned and shall continue in effect for a period of 60 consecutive days
without being vacated, or stayed pending appeal (or the satisfaction or bonding
of any such verdict, judgment, decree or order shall, in the Bank's reasonable
judgment, constitute a material adverse change), any proceedings to execute any
such verdict, judgment, decree or order shall be commenced, or if any
attachment, distraint, levy or other restraint shall be placed upon any property
or assets of the undersigned or any Third Party;

THEN, in any such case, the unpaid principal amount of this note, together with
accrued interest and all other Liabilities, shall immediately become due and
payable without any notice or other action by the Bank. The undersigned waive(s)
presentment, notice of dishonor, protest and any other notice or formality with
respect to this note. All rights and remedies provided in this note or otherwise
available to the Bank shall be cumulative and not exclusive and each may be
exercised by the Bank from time to time and as often as may be necessary.


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     8. ENFORCEMENT. The Bank may, upon the occurrence and continuation of an
Event of Default, proceed to enforce payment of the same and exercise any of or
all the rights and remedies afforded the Bank by the Code or otherwise possessed
by the Bank. Any requirement of the Code for reasonable notice to the
undersigned shall be deemed to have been complied with if such notice is mailed,
postage prepaid, to the undersigned and such other persons entitled to notice,
at the addresses shown on the records of the Bank at least four (4) Business
Days prior to the time of sale, disposition or other event requiring notice
under the Code.

     9. TRANSFER. Upon any transfer of this note, the undersigned hereby waiving
notice of any such transfer, the Bank may deliver the Assets With Bank or any
part thereof to the transferee who shall thereupon become vested with all the
rights herein or under applicable law given to the Bank with respect thereto and
the Bank shall thereafter forever be relieved and fully discharged from any
liability or responsibility in the matter; but the Bank shall retain all rights
hereby given to it with respect to any Liabilities and Assets With Bank not so
transferred. No modification or waiver of any of the provisions of this note
shall be effective unless in writing, signed by the Bank, and only to the extent
therein set forth; nor shall any such waiver be applicable except in the
specific instance for which given. This agreement sets forth the entire
understanding of the parties, and the undersigned acknowledges that no oral or
other agreements, conditions, promises, understandings, representations or
warranties exist in regard to the obligations hereunder, except those
specifically set forth herein.

     10. JURISDICTION AND WAIVER. The undersigned hereby irrevocably consents to
the in personam jurisdiction of the federal and/or state courts located within
the State of New York over controversies arising from or relating to this note
or the Liabilities AND IRREVOCABLY WAIVES TRIAL BY JURY AND the right to
interpose any counterclaim or offset of any nature in any such litigation. The
undersigned further irrevocably waives presentment, demand, protest, notice of
dishonor and all other notices or demands of any kind in connection with this
note or any Liabilities.

     11. MISCELLANEOUS. Each reference herein to the Bank shall be deemed to
include its successors, endorsees, and assigns, in whose favor the provisions
hereof shall also inure. Each reference herein to the undersigned shall be
deemed to include the successors and assigns of the undersigned, all of whom
shall be bound by the provisions hereof.

     The undersigned agrees to pay to the Bank, as soon as incurred, all costs
and reasonable and documented expenses incidental to the care, preservation,
processing, sale or collection of or realization upon any of or all the Assets
With Bank or incurred in connection with the enforcement or collection of this
note, or in any way relating to the rights of the Bank hereunder, including
reasonable outside counsel fees and expenses. Each and every right and remedy
hereby granted to the Bank or allowed to it by law shall be cumulative and not
exclusive and each may be exercised by the Bank from time to time and as often
as may be necessary. The undersigned shall have the sole responsibility for
notifying the Bank in writing that the undersigned wishes to take advantage of
any redemption, conversion or other similar right with respect to any of the
Assets With Bank. The Bank may release any party (including any partner of any
undersigned) without notice to any of the undersigned, whether as co-makers,
endorsers, guarantors, sureties, assigns or otherwise, without affecting the
liability of any of the undersigned hereof or any partner of any undersigned
hereof.


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<PAGE>

     12. GOVERNING LAW. This note shall be governed by and construed in
accordance with the laws of the State of New York and, as to interest rates,
applicable Federal law.

                                        MOVADO GROUP, INC.


                                        By: /s/ Eugene Karpovich
                                            ------------------------------------
                                        Name: Eugene Karpovich
                                              ----------------------------------
                                        Title: SVP & CFO
                                               ---------------------------------

                                        Address
                                        for
                                        notices: 650 From Road
                                                 Paramus, New Jersey 07652
                                                 Attn: Eugene J. Karpovich,
                                                       Senior Vice President &
                                                       Chief Financial Officer
                                                       Telecopier: 201-267-8240
                                                                   -------------
                                                       Telephone: 201-267-8004
                                                                  --------------


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                                      GRID

<TABLE>
<CAPTION>
             LOANS                            PAYMENTS
-------------------------------   --------------------------------
Date                   Maturity                                       Balance Due   LN Clerk
Made   Amount   Rate     Date     Date Made   Principal   Interest   On Principal   Initials
----   ------   ----   --------   ---------   ---------   --------   ------------   --------
<S>    <C>      <C>    <C>        <C>         <C>         <C>        <C>            <C>

</TABLE>