Pandora shines as sales in bracelets and rings rise

Published: Wednesday 28 December, 2016
Pandora shines as sales in bracelets and rings rise

Pandora, the Danish jeweller, has raised its sales guidance for the second time this year as it reaps the benefits of strong demand for its charm bracelets and rings.

The group upgraded its revenue forecast for 2015 from DKr15bn to DKr16bn ($2.4bn), as it announced second-quarter results on Tuesday. At the start of this year it had expected DKr14bn.

Pandora has experienced a remarkable turnround in investors’ affections. Just four years ago, it saw more than two-thirds of its market capitalisation wiped out in one day following a disastrous profit warning shortly after listing on Copenhagen’s stock exchange.

But more recently the jeweller has recorded rapid growth. It has opened hundreds of new stores and is releasing new products more frequently, including as part as a recent tie-up with Disney in the US.

Its second-quarter results confirmed the trend as Pandora posted a rise in revenues to DKr3.6bn, up 41 per cent compared with a year earlier. The sales figures were flattered by fluctuations in the Danish krone, with the rise in local currencies being 26 per cent. Operating profit also increased sharply, up 47 per cent to DKr1.24bn.

“What I find encouraging is that we see a very strong development in all regions and all products . . . It’s a good team effort,” Anders Colding Friis, the new chief executive, told the Financial Times.

Sales increased more than 35 per cent in all three main regions — Americas, Europe and Asia — as well as its three main product categories of charms, bracelets and rings.

Shares were up 4 per cent to DKr811 on Tuesday, taking the stock’s gains for the year to 112 per cent. Pandora’s shares had fallen more than 80 per cent in 2011 after the profit warning but have since increased 20-fold.

Pandora also raised its forecast for new store openings this year, from 325 to 375, as it opens a large number of concept shops in Germany.

The Danish jeweller also said it would take over the distribution of its products in Singapore, Macau and the Philippines, pursuing a strategy of buying out local distributors in promising emerging markets, as it had done in Brazil and Turkey.

Mr Colding Friis took over as chief executive in March from Allan Leighton, the UK retail turnround specialist who is still vice-chairman of the jeweller, as well as the chairman of the Co-operative Group.