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Pandora, best known for its customisable silver
charm bracelets, is struggling to regain its edge as new jewelry
lines have failed to entice shoppers.
The 1,200 new job cuts follow 700 layoffs in February, where a
plan was announced to cut costs by 1.2 billion crowns by
end-2020 and reignite the brand through enhanced marketing
efforts. Pandora employs around 14,000 people in Thailand,
almost half of its 32,000 global workforce.
The firm will double marketing investments in Italy, the United
Kingdom and China and bring in celebrities and digital media
"influencers" in a bid to boost sales.
"The brand as well as the company has reached a point of
maturity and it is not without some serious challenges," said
Chief Executive Alexander Lacik.
Lacik last month took the helm at Pandora, which sold 280,000
pieces of jewelry per day in 2018, after former CEO Anders
Colding Friis was ousted last year in a bid to regain investor
trust after several profit warnings.
The stock is still down around 60 percent over the past year.
The world's largest jewelry maker by production capacity said
like-for-like sales fell 10 percent in the quarter due to a
decline in shopper numbers at its stores as economic growth in
key markets like Italy, Britain and Australia slows.
Like-for-like sales compares sales in stores that have been open
a year or more.
Fewer promotions also hit sales in the quarter, but this is part
of the firm's broader strategy to revive the brand as it has
acknowledged that the level of discounts had been too high.
The firm will start using more "influencers" and celebrities to
entice young shoppers and the use of Colombian pop singer
Shakira to promote jewelries in Latin America had been positive,
Chief Financial Officer Anders Boyer told Reuters.
Earnings before interest, tax, depreciation and amortizations (EBITDA)
fell 12 percent to 1.5 billion Danish crowns ($225 million), but
topped the 1.3 billion expected by analysts in a Reuters poll.
J.P. Morgan analysts said the earnings were "slightly better
than feared" and Pandora shares rose 2.5 percent in early
trading to 276 crowns, still far from its 2016 peak of 1,000
crowns.
(For a graphic on Pandora's sales growth, click https://tmsnrt.rs/2TyiTuq)
(Reporting by Stine Jacobsen; editing by Jacob Gronholt-Pedersen/Jason
Neely and Emelia Sithole-Matarise)
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