Jewellery giant’s sales collapse
Pandora – once considered the driver of change in the jewellery category – is on the brink.
In a shock announcement the Denmark-based giant which has rapidly rolled out stores across the Us, the UK, Asia and Australia in recent years has reported a 30 per cent slump in sales. Its Australian sales have slumped almost 15 per cent.
Despite increasing prices, Pandora’s revenue increased by just 3.6 per cent and its pre-tax earnings fell 6.2 per cent in the second quarter of the year.
Pandora’s CEO Mikkel Vendelin Olesen quit Tuesday with immediate effect.
The stockmarket reacted by devaluing its share price by a massive 70 per cent.
This is the company that listed just last October, raising US$2.1 billion. This week it announced July revenues were down 30 per cent year on year.
Current board member Marcello Bottoli will become interim CEO and the company will start searching for a permanent replacement. It has also announced an 18 month turnaround program – a timeframe that will do little to appease investors who have seen their asset shrunk so dramatically in just a few days.
In a statement, the company said its growth has been impacted by “the cumulative effect of substantial price increases in the light of soaring commodity price increases”.
“In addition our sales, marketing and operational execution has been poor in many cases and is as big a contributory factor.”
“The re-set of our affordable luxury positioning, improved operational execution and restoring growth trajectory is now the focus of our company,” it said, indicating it would take 18 months to complete.
Allan Leighton, chairman, confessed: “Although our price increases combined with some destocking are significant contributors to our slowdown in sales and profitability, our own inadequate operational sales, and marketing execution is as big a factor.”
Inside Retail will carry more commentary on Pandora’s predicament in our weekly digital newsletter edition tomorrow, Friday.