While Pandora’s worldwide revenue decreased in fiscal 2011, its U.S. sales have mostly held steady, interim CEO Marcello V. Bottoli tells JCK in an exclusive interview.
“We are seeing some very positive trends in the U.S.,” Bottoli says. “The U.S. is holding up better than other markets. The macro economic environment is better than Western Europe. We feel very positive about the U.S.”
The company’s 2011 group revenue evidenced a slight drop in 2011, to DKK 6.658 billion, from DKK 6,666 billion in 2010. Yet while revenue in Europe and Asia Pacific dropped, revenue in the Americas increased by 7.9 percent in 2011, or 12.4 percent in local currency.
U.S. results in the fourth quarter were not as healthy. U.S. revenue dropped 14.5 percent in the year’s final quarter, the company says, but the company blames this on a shift in its delivery schedule, since many of its releases were shifted to the third quarter. Adjusting for that, the company calculates U.S. revenue rose 1.6 percent in the fourth quarter.
It also notes that comp sales at its U.S. concept stores increased 16 percent in the fourth quarter.
Bottoli says that while the company plans to expand the number of co-owned concept outlets, it is still committed to “multi-brand retailers” in the American market.
Bottoli also sees a lot of “opportunities for growth” in the U.S.
“There are pockets where we have significant untapped potential,” Botolli says, citing the West Coast and Manhattan, where the company just opened its first concept store in Soho.
Pandora is planning a new U.S. advertising campaign, Botolli notes, as well as a “new marketing plot” for this year’s holiday.
Botolli says the company will continue its forays into other categories like jewelry—but will do so slower than in the past.
“More than ever, rings are a primary category for us,” he says. “We are going to continue to support those categories but we are going to take them one at a time.”
The company also announced it was decreasing prices on select items, and that it is doing a one-off, time-limited global stock balancing campaign, which will allow retailers to exchange non-turning stock for the company’s best-sellers.
A new CEO will take over Pandora on March 1. Botolli believes he will continue the company’s new strategy.
“For six months, we have reviewed everything in our business,” he says. “The strategy is solid. The execution is where we haven’t been performing where we should have.”
He notes the new CEO has experience as head of two U.S. footwear chains.
“He clearly will focus on making the execution spotless and better than it has been done before,” Botolli says.
When asked the age-old question of whether Pandora is a fad, Botolli pointed to a recent JCK article, quoting a survey calling it the number two name among luxury consumers. He also notes the company has one million Facebook fans.
Other highlights of Pandora’s financial statement:
- The company expects 2012 revenue to grow in the mid-single digits.
- It expects numbers to be impacted by its stock balancing campaign.
- Reported net profit for 2011 increased by 8.9 percent to DKK 2.037 billion, compared to 2010’s DKK 1.871 billion.
- The Board of Directors proposes a dividend of DKK 5.50 per share in 2011, 10 percent above the dividend paid for the financial year 2010.
- Total revenue in the fourth quarter of 2011 decreased by 15 percent to DKK 1.952 billion, from DKK 2.297 billion in the fourth quarter of 2010.