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Restructuring Efforts Boost Pandora

Shares up 10% after results despite profit drop.
Aug 20, 2019 10:21 AM   By Rapaport News
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RAPAPORT... Shares in Pandora rose 10% in early trading Tuesday as sales declines narrowed in key markets and restructuring efforts led to signs of recovery.

Global sales fell 2.6% year on year to DKK 4.69 billion ($697.2 million) in the second quarter, the Danish charm maker reported Tuesday. Same-store sales — at locations open for more than a year — fell 6% in the US, while sales in China slipped 4%. Sales dropped 10% in Italy and slid 8% in the UK, two important markets that saw sharper declines in the previous quarter.

In the three months ending June 30, Pandora saved approximately DKK 125 million ($18.6 million) through cost-cutting initiatives, which included decreasing its workforce by a net 2,200 employees, as well as reducing the number of days on which it offered promotional sales by 32%, it said.

As part of the revamp, the company also plans to adopt pink as its new main color across all points of contact with customers. It will also introduce several new jewelry collections targeted primarily at young women, and will offer charms based on characters and items from Harry Potter and Frozen II.

Additionally, the jeweler will cooperate with six global influencers who have significant reach on social media, including Nathalie Emmanuel, an English actress and Instagram influencer with more than 5.5 million followers.

“In the quarter, we have progressed rapidly on a number of important commercial initiatives which we can soon reveal and showcase to our consumers as part of our brand relaunch on August 29,” said Pandora CEO Alexander Lacik. “Our preparations and marketing pilots spur confidence in our direction. By improving execution with focus on Pandora’s core proposition, we can improve our relevance for consumers around the world. This is the first important step in our journey towards positive growth.”

Global net profit for the quarter fell 50% to DKK 526 million ($78.1 million). The company is on track to reach its guidance of a sales decline ranging from 3% to 7% for the full year, it said.

Image: A Pandora store in Manhattan, NY. (Shutterstock)
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Tags: Alexander Lacik, Frozen II, Harry Potter, Nathalie Emmanuel, Pandora, Programme Now, Rapaport News
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