The closing of 700 North American points of sale will bring down its fourth quarter revenue, the company says
Pandora’s U.S. sales jumped 8 percent in its third quarter, but the company saw a slowdown in sales from its signature charms.
Overall U.S. revenue totaled DKK 1.1 billion (about $160 million). In dollar terms, sales rose 9 percent. Comps at its concept stores rose 3 percent.
The “single digit negative growth” of charm sales in the United States was primarily driven by lower revenue from its Disney collection, it said. Excluding Disney, charm revenue would have risen 10 percent. The company saw good results in the U.S. from its eStore and Save More Spend More campaign. It has also opened 31 new concept stores in the United States in the last year, for a total of 340.
The brand’s decision to close around 700 unbranded points of sale—500 in the United States, 200 in Canada, somewhat more than previously announced—could “bring down the full year and [will] have an impact on the full year revenue,” CEO Anders Colding Friis told analysts in a conference call following the release of the financial results, according to a SeekingAlpha transcript.
The expected revenue impact from taking back inventory from closing multi-brand stores is DKK 150 million (about $22 million), he said. In addition, the closing stores did DKK 150 million in revenue last year.
“We might lose some [of that revenue],” Friis admitted. “But we do believe that we have some great loyalty [that] will make some of the customers come to one of our concept stores or maybe back online.”
Still, Friis called the store closings an “important step forward.”
“We want to have a good branded network also in North America,” he said. “And what we’ve been aiming at is taking out the stores which are either unbranded or not branded to the level that we wanted to be.
“What we’ve seen across the world is that the stronger we stand with our branded representation in retail, the stronger development we see for the brand,” he continued.
Added executive vice president and chief financial officer Peter Vekslund: “In some markets, we will have gold stores, which is also a branded environment because there’s basically not enough people in a given city to hold a concept store. But the silver and white accounts, those we are closing in all markets.”
The company’s overall revenue for its third quarter was DKK 4.61 billion (about $688 million), an 18 percent increase or 21 percent in local currency.