Pandora nixed 125 mostly-U.S. retailers from its network in its second quarter and plans to walk away from more “unbranded” accounts in the future.
“Across all the markets and in the U.S., we will continue to close the unbranded [non-Pandora] stores,” Pandora Group executive vice president and chief financial officer Peter Vekslund said during a conference call following the release of its financial results. “Expect us to continue to close unbranded stores and keep opening concept stores. That is really our focus.”
The Danish charm manufacturer’s decision to nix 125 unbranded stores, mostly in the United States, comes after it dropped 105 “underperforming” mostly-U.S. retailers earlier in the year.
Pandora’s chief sales officer Darren Chen tells JCK in an emailed statement the company “continues to focus on the development of our branded stores in the United States. We continually evaluate all of our points of sale including the review and examination of our unbranded network. This assessment helps us to identify opportunities for growth as well as reductions in store counts.”
Despite this, the company’s U.S. business thrived in its second quarter (ended June 30), with sales rising 14 percent in dollar terms, to 1.17 billion Danish krone ($172 million). Comps at its branded stores increased 8.1 percent over last year. The jump was fueled mostly by the expansion of its network, including the opening of its eStore, as well as the continued strength of its Disney line, a statement said.
The eStore has already delivered “meaningful revenue,” said CEO Anders Colding Friis during the conference call but declined to provide further figures. “It will be very interesting to follow this over the year. What we’ve seen in other markets over the year is that when we go into the gifting season, by the end of the year, men tend to be more interested in e-commerce, with the guidance we get from our wives and girlfriends, and we see a pickup of traffic.”
Sales of rings have also grown in the United States, the company said, so they now approach 10 percent of U.S. revenue.
Overall, the company’s second-quarter sales increased 41 percent to 3.59 billion Danish krone ($531 million), a 25.8 percent jump in local dollar terms. Net profit for the quarter was 910 million Danish krone ($134 million), a 37 percent increase from last year.
The company is also taking over the product distribution in the Singapore, Macau, and the Philippines regions.
That is “in line with what we’ve been doing over the years,” said Friis. “When we see our distributors doing well and we are getting to a position that we are well-established in the market, and it comes up for renewal of the agreement, we have a look at it, and if we find that it is beneficial for us to take over, we do that.”