Pandora’s Revenues Sink Because of Stock Balancing

Pandora’s stock rebalancing campaign hurt the Danish charm manufacturer’s financial results for the first quarter of 2012, group CEO Björn Gulden tells JCK.

The results showed that group revenue decreased 18.4 percent in the first quarter to DKK 1.424 million ($248 million)—a decrease that was, nevertheless, below analysts’ expectations. First quarter net profit decreased by 34.4 percent to DKK 338 million ($59 million).

Revenue in the U.S. sank 10 percent—but like-for-like sales at the company’s concept stores were up 6.7 percent.

Gulden says most of the decrease stemmed from the company’s stock rebalancing campaign, which was heavily skewed toward the U.S.

“There is a certain cannibalization, and of course it hurts the company in the short term,” he says.

Still, Gulden thinks that the stock rebalancing, as well as price adjustments towards more affordable price points, had begun to turn the company around.

For the future, Gulden says that the company wants to concentrate on the charm, bracelet, and ring categories.

“People say, Aren’t you too dependent on bracelets and charms?” he says. “I think we should own those categories.”

He notes that, the company opening more concept stores, the company still wants to continue to service independent jewelers.

“We have a solid balance in the U.S.,” he says.

As for e-commerce, Gulden says that will be a big part of the company’s strategy going forward, but is not sure how that will work in the United States.

As a new CEO, with just two months under his belt, Gulden says he is impressed with what he has seen at Pandora.

“If you compare it to my background, which is sports and shoes, the issues are the same,” he says. “Who is the consumer? How do you appeal to them?”

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