Pandora closes 100 more stores

There is an element of déjà vu about the start of the new year for the Australian and New Zealand jewellery industries following Pandora announcing it will close around 100 wholesale accounts by the end of March.

Pandora Australia President Karin Adcock announced the decision via email and letter to all Pandora retailers this morning, saying Pandora was looking to continue to grow its brand and needed to change its distribution strategy to do so.

Sound familiar? It should, because just short of 12 months ago Pandora made a similar announcement, saying it would be closing 100 accounts in an attempt to have greater control over the retail experience of the customers buying their product.

Pandora will allow the accounts it intends to close to sell its product until March 31 and from there will be looking to open more fully branded concept stores, which it intends to become franchise stores.

Last December the company opened its first concept stores in New Zealand. The stores were opened in Albany and Newmarket and are franchisee-owned by jewellers who previously stocked Pandora products.

Adcock said the key reasoning behind the brand’s decision now was to ensure their customers could access Pandora product in the best possible representation, something the company believed was not happening in some retail outlets currently stocking Pandora products.

“We have to make sure that when the customer is considering buying Pandora that we are offering the best possible proposition, both in terms of product and service,” Adcock explained.

“We are doing this to grow sales and ensure that the customers who want Pandora can access Pandora in a strongly branded environment, and we know for a fact that this is currently not happening.”

Adcock has previously denied that stores’ proximity to a Pandora concept store had anything to do with which accounts were being closed.

The Danish headquartered company’s most recent results showed the 2011 third-quarter net profit exceeded analysts’ forecasts, but recorded a significant drop in profits nevertheless. 

Pandora’s annual net profits were down 41 per cent to 341 million Danish kroner (AUD$61 million) compared to 578 million kroner in the previous corresponding period. 

Adcock said Pandora was seeking to continue its growth and it believed if it was being sold in a more strongly controlled environment it could maximise the opportunities currently in the market.

“We know from certain research and our own existing concept stores that there are opportunities out there.

“The key message here is we are doing this initiative to ensure that our brand keeps going in a positive direction and we maximise all of the opportunities that are currently out there in the market.”