(IDEX Online News) – Danish jewelry firm Pandora continues to report falling revenue and profit. In the second quarter, group revenue dropped 9.5 percent to DKK 1,260 million ($209.7 million).
CEO Björn Gulden
Europe continues to drag down the company’s bottom line with a revenue drop of 16.6 percent (17.4 percent decrease in local currency). The America’s saw a decline of 5.1 percent (14.6 percent decrease in local currency) with a drop of 8.1 percent (14.1 percent in local currency) in the Asia Pacific region.
Overall, net profit decreased by 89.9 percent to DKK 63 million ($10.5 million) in the quarter.
The company said it expects to open approximately 200 new concept stores in 2012, with a particular focus in new markets. It plans to open at least 135 new concept stores and shop-in-shops in its key new markets Italy, France, Russia and Asia during the year.
CEO Björn Gulden said the company’s operations developed as expected during the quarter, even with a slightly better gross margin helped by a changed product mix.
“Our Spring/Summer 2012 collection launched in mid-March continued to do very well in terms of sales to end-customers, sales-out. In combination with the realignment of the price architecture on the rest of our product portfolio, our offering is now again competitive with the right commercial price points for our jewelry,” he said.
“Feedback from our retailers on our Autumn/Winter 2012 collection has been very encouraging and with an additional 94 new Concept stores opened in H1 2012, we are on track to deliver on what we have promised the market in our financial guidance for the full year.”
In an effort to improve the stock mix at its key retail partners, Pandora is conducting a one-off, time-limited stock balancing campaign. The campaign is planned to continue for the remainder of the year. The company said it anticipates a negative impact on reported numbers across the whole of 2012 due to “cannibalization of future sales.”
It also said, however, that its retailers have welcomed the stock balancing campaign initiative and the part of the campaign run so far has achieved a high participation rate from retailers, both in terms of number of stores and volume.