Pandora will lay off another 1,200 workers in Thailand and speed up marketing spending as its new chief executive looks to turn around the struggling jewellery maker and retailer after another fall in like-for-like quarterly sales.
Pandora, best known for its customisable silver charm bracelets, is struggling to regain its edge as new jewellery lines have failed to entice shoppers. It sold 280,000 pieces of jewellery per day in 2018.
Pandora is trying to hit the reset button after two rough years during which investors lost faith in its strategy. The company said its efforts to revive its brand and run its business more efficiently are paying off. The 1,200 new job cuts follow 700 layoffs in February, where a plan was announced to cut costs by 1.2 billion crowns (€160.7m) by end-2020 and reignite the brand through enhanced marketing efforts.
Pandora employs around 14,000 people in Thailand, almost half of its 32,000 global workforce. The firm will double marketing investments in Italy, the UK, and China and bring in celebrities and digital media influencers in a bid to boost sales.
“The brand as well as the company has reached a point of maturity and it is not without some serious challenges,” said chief executive Alexander Lacik.
Mr Lacik last month took the helm at Pandora after former CEO Anders Colding Friis was ousted last year in a bid to regain investor trust after several profit warnings. The stock is down about 60% over the past year.
The world’s largest jewellery maker by production capacity said like-for-like sales fell 10% in the quarter due to a decline in shopper numbers at its stores as economic growth slows in key markets like Italy, Britain, and Australia.
Like-for-like sales compare sales in stores that have been open a year or more. Fewer promotions also hit sales in the quarter. But this is part of the firm’s broader strategy to revive the brand as it has acknowledged that the level of discounts had been too high.
The firm will start using more influencers and celebrities to entice young shoppers and the use of Colombian pop singer Shakira to promote jewelleries in Latin America had been positive, said chief financial officer Anders Boyer.
Earnings before interest, tax, depreciation, and amortisation (Ebitda) fell 12% to 1.5bn Danish crowns, but topped the 1.3bn expected by analysts. JP Morgan analysts said the earnings were “slightly better than feared” and Pandora shares rose 2.5%.
Reuters and Bloomberg