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Pandora to cut 1,200 jobs as Q1 profit, sales fall
[COPENHAGEN] Pandora will lay off another 1,200 workers in Thailand and speed up marketing spending as its new CEO looks to turn around the struggling jewellery maker after another fall in like-for-like quarterly sales.
Pandora, best known for its customisable silver charm bracelets, is struggling to regain its edge as new jewellery 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(S$245.1 million) 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.
Mr Lacik last month took the helm at Pandora, which sold 280,000 pieces of jewellery 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 per cent over the past year.
The world's largest jewellery maker by production capacity said like-for-like sales fell 10 per cent 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 jewelleries in Latin America had been positive, Chief Financial Officer Anders Boyer told Reuters.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 12 per cent to 1.5 billion Danish crowns, but topped the 1.3 billion expected by analysts in a Reuters poll.
JP Morgan analysts said the earnings were "slightly better than feared" and Pandora shares rose 2.5 per cent in early trading to 276 crowns, still far from its 2016 peak of 1,000 crowns.