At the end of a turbulent week for Danish jewellery behemoth Pandora, which culminated in the departure of its chief executive yesterday, Ruth Faulkner ponders the fate of the once-unstoppable jewellery brand.
This week Danish jewellery giant Pandora proved that sometimes the best clichés are clichés for a reason, as it made good on the adage that “nothing lasts forever”.
For as long as Pandora has been a runaway success, there have been those who have speculated that “whatever goes up, must come down” and other such related pearls of wisdom.
While at one point, it might have seemed to some, particularly those who were reaping the rewards, that Pandora was a licence to print money, most people were acutely aware that the phenomenon had a shelf life and this week we saw the first real concrete signs that the glory days appear to be over.
On Tuesday we heard that the brand was to make almost 400 staff redundant while simultaneously adjusting its financial guidance for 2018, amid reports of falling charm sales. This news was followed yesterday (August 9) by the announcement that chief executive Anders Colding Friis was to quit the business, causing Pandora’s stock price to plummet by around 20%.
And all of this just a mere six weeks after the announcement that managing director Brein Winther is to leave his role at the helm of the UK business. The official reason given for Winther’s departure was that he wished to return to his native Australia but, many close to the business have speculated that he was made a fall guy for sliding sales here in the UK.
While we may never know the real reason for Winther’s exit, just 18 months after his appointment, there can be no doubt that Pandora’s business, both here and globally, is not doing the numbers it once was.
There have also been inevitable questions raised about Pandora’s business model in the UK, with franchisees complaining that margins were constantly squeezed by head-office-imposed deep discounting and promotions, leading ever-increasing numbers of partners to negotiate the sale of their stores back to Pandora and exit before sales slid further.
Don’t get me wrong, Pandora still sells, and any fall in sales must be taken in context when you bear in mind that in its heyday, the brand generated around £1.7bn in sales globally (FY2015) and enjoyed 50.4% year-on-year sales growth in the UK (FY2015 vs FY2014).
However, sales growth was never going to continue at the same pace and, despite attempts to reinvent its offer and appeal to a new customer with the launches of collections like Pandora Shine and the implementation of its DO Campaign plus strong sales of its stacking rings, the brand famed for its iconic charm bracelet has ultimately found it a challenge to become known for anything but that.
Add to that the fact that sales of branded silver jewellery have been in decline in general in the UK over the past year, plus the well-documented struggles of the UK high street, and it would seem that the writing is on the wall.
A new global chief executive and a new head of the UK business might yet turn things around but, as we have seen from all the brands who have vied in earnest over the past five years to become the “next big thing”, success like that enjoyed by Pandora at its height just doesn’t happen very often, and it is unlikely the jewellery industry will ever see anything like it again and, if it does, it certainly won’t be for a very long time.