With the news that around 100 Pandora accounts would soon be closed as the brand realigns itself for a new growth phase, Pandora Jewelry managing director Karin Adcock told Jeweller that the brand had a clear criteria for closures and explained which types of stores will be affected.
She reassured the jewellery industry by revealing that many of the closures will be non-jewellery stores.
There is no doubt that it has been stressful times for Adcock, as she has had to close some accounts that may have been with the brand since she first began promoting Pandora in Australia.
But Adcock revealed that around 50 per cent of the accounts slated for closure are gift and/or accessory stores.
While it might be good news for the jewellery industry that Pandora is exiting gifts stores – a category channel it has been criticised for maintaining for so long – for Adcock there was not necessarily a distinction between the categories because they are all Pandora accounts.
“A lot of the jewellery stores didn’t want to know us when we first started Pandora,” she explained. It is well known that many jewellers only took on the brand after witnessing success at gift-style outlets.
Adcock explained that to decide which accounts Pandora would close, the company established a set of criteria based on the environment that the brand is sold in. “We had a long list of criteria; from branded environment to embracing the other product lines, general relationship to after-sales service, and with that we then looked at how each store ‘scored’ individually and that’s basically how we arrived at the list [for closure],” she said.
Adcock denied that stores’ proximity to a Pandora Concept store had anything to do with which accounts were being closed. ”What we have very much been looking at is the environment Pandora’s been sold in so there are some examples where there are in fact Concept stores and then 15km away from that concept store is a gift store which is really not an environment where Pandora is presentable, and I’m actually not saying that this is across the board for all gift stores but there are some of the gift stores we have been stocking which really are not the environment we can justify to be in.”
“We do not close stores simply because they are close by to a Concept Store, it’s all about presentation [of the product].
“It comes back to out retail concept: we launched the retail concept in 2007 and we’ve been trying to work with retailers to embrace the concept since then but for some retailers it’s just not viable, and with those retailers we’ve just now had to say, ‘Well look it’s obvious that this is not going to work so we have to part ways’.”
A small number of accounts were closed last year in accordance with the rationalisation strategy but it was quickly decided that a widespread assessment was needed. “Yes, we did close a small number of stores last year but we thought rather than keep going and closing a store here and a store there over a long period of time, we thought we’d be better off going out and in one big way address the stores we need to close so we don’t have more retailers over the next three to four months thinking ‘What is my future with Pandora, am I in, am I not in, what’s going on?’.”
She said that as hard as it is, it was decided it would be better to execute the strategy fairly swiftly. “And this is also something we are doing face-to-face,” Adcock said. “We will not just be sending a letter, this [email] is really an attempt to avoid rumours going around. There is an individual consultation with the stores this week.”
Adcock said the rationalisation was part of Pandora’s long-term strategy to ensure the longevity of the brand. “It’s a long-term strategy that we want to be a jewellery brand which is here in 20, 30, 50, 100 years and that our core product range is the charms and bracelets, but we have a very large offering of other products that we want the end customer to have access to as well.”
It has been reported that Pandora’s annual Australasian retail sales are more than $400 million and that the company has an advertising and marketing budget of $6 million. This massive exposure of the brand is unlikely to diminish overnight and both Adcock and the company’s marketing director Jeff Burnes believe Pandora will go through a new growth phase after the rationalisation of store numbers.
Adcock agreed that there will be some degree of nervousness with existing Pandora stockists, but she explained that there were a number of initiatives in place to quell retailers’ fears.
“We are going to do a road show travelling around the country at the end of March and beginning of April, mixing with all our retailers out where they are, where we want to present our long-term strategy and some new and very exciting initiatives which will very much benefit the multi-branded [independent] retailers and I don’t really want to say what they are right now because some are significant, great initiatives which will enhance the way they are trading,” Adcock explained.
The road show will visit every state in a seminar-type format that is designed to be both educational and new product based. “We can’t physically visit every store one on one, so we will have a road show in all the states where key staff members and I will travel around and share the strategy going forward and some great new initiatives on how we are moving the brand forward.”
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Pandora to close accounts