Pandora Cuts 1,200 Jobs as Sales Drop

RAPAPORT… Pandora will push ahead with a total overhaul of its business, after sales weakened in the first quarter. 


Global sales fell 6% year on year to DKK 4.8 billion ($720.5
million) for the January-to-March period, the Danish charm maker reported
Tuesday. Revenue in the US slipped 12% in local currency to DKK 977 million
($146.5 million), while sales in China rose 15% to DKK 548 million ($82.2
million). Global net profit declined 31% to DKK 797 million ($119.5 million).

The company plans to lay off approximately 1,200 employees at its Thailand manufacturing facility. Those cuts are in addition to the 700 workers it dismissed from the factory in February. It will also reduce some workers’ hours, aiming to save a combined DKK 600 million ($90 million) in 2019. 


Pandora attributed the weak first-quarter performance to its unsuccessful consumer and
marketing strategies. As part of a transformation, the company will offer fewer discount promotions, reduce its
inventory, and minimize the design variations it carries in stores.


Additionally, the retailer plans to increase its marketing
in certain countries, including the UK, Italy and China, to reach consumers
more effectively. The campaigns will be consolidated through one advertising agency,
which will provide Pandora with a clear brand, it said. The company has also recently launched new campaigns featuring celebrities and influencers.


The strategy shift, which began in the first quarter, “is progressing rapidly, and is creating a real
transformation of our business, culture and organization,” said Anders Boyer,
Pandora’s chief financial officer. “As expected, the first quarter was
characterized by continued weak like-for-like [figures], further burdened by our
deliberate commercial reset.”


During the quarter, the company opened a net eight concept
stores, down from 39 in the same period last year. It plans to close 50 stores
that were not making profits. Pandora expects sales to fall 3% to 7% this year, it said. 


Image: Jewelry production at a Pandora charm-making facility. (Pandora)