As first reported by Jeweller in December 2015, the trouble started when Pandora Australia and New Zealand president Brien Winther advised the brand’s retail stockists against simultaneously stocking US jewellery range Alex and Ani. The newcomer, Alex and Ani, was introduced to the Australian and New Zealand market about one week prior by House of Brands, which is owned by former Pandora Australia and New Zealand president Karin Adcock.
Winther’s email sent to Pandora retail stockists on 14 December stated: “Pandora would not consider allowing you to distribute Alex and Ani products from your store whilst you are an authorised Pandora retailer.”
The email explained that the US brand was a ‘Competing Product’ and reminded stockists about the terms and conditions of the Pandora Authorised Retailer Agreement, which prevents retailers from selling products that “could reasonably be regarded as Competing Products of Pandora Jewelry unless of course Pandora has previously given you written approval to do so.”
The industry dispute went 'mainstream' after Jeweller's exclusive exposure, with The Sydney Morning Herald [SMH] reporting about the fight on 26 December in an article titled, Charm offensive – Pandora warns retailers off former boss’ new brand.
In the report, Adcock said Pandora’s strategy had backfired and had only “heightened” retailer interest for the new Alex and Ani range.
"On the back of that email that went out, we've had an overwhelming response from the industry," Adcock was quoted saying. She later told Jeweller that the Alex and Ani website had a huge increase in visitor numbers since the SMH report, explaining that it piqued the curiosity of consumers who were previously unaware of the jewellery brand.
Adcock said that as a direct result of the newspaper's story, many jewellery stores had contacted her to enquire about stocking the US brand.
The SMH report also quoted Winther, who stated “there was nothing unusual about Pandora's response to the Alex and Ani launch”. He claimed Adcock made "similar decisions" when she was Pandora president.
When approached by Jeweller for further comment, Winther expanded: “During her tenure as President of Pandora, Australia and New Zealand, Karin Adcock made similar decisions when competing product was offered to the multi-branded retailers.
“She identified several competing brands in her time at the company. We respect the decisions that she made at that time for our retailer network, and believe that those decisions were beneficial for our partners.”
Adcock has denied such reports and released an official statement in response via her LinkedIn page.
“Disappointingly the [Fairfax] article quotes that I also stopped other brands from sitting alongside Pandora during my tenure, which is factually inaccurate,” the statement read.
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“The reality is that when it was strongly suggested from Pandora Denmark to stop Thomas Sabo from entering into Pandora stockists, even given their offering was very different to Pandora, I did not believe we could (nor should) stop a potentially strong brand being introduced into the market.
“A couple of times we did elect to pull out of retailers who were selling a direct copy of the Pandora charms and bracelets as they were passing the copy brands off as being Pandora. But in general I strongly believe market forces should dictate the brand offerings to Australians.
“Alex and Ani is a very different concept and offering to Pandora. It seems Pandora is concerned as they are competing for the [consumer] dollar in America against Alex and Ani. From the reaction of stockists and long-standing friends in the marketplace – it looks like this may well be the case in Australia.”
In addition, Adcock confirmed to SMH that she had referred the matter to the Australian Competition and Consumer Commission (ACCC).
As previously reported by Jeweller at least one retailer had also taken the issue to the consumer watchdog for a breach of the Consumer and Competition Act 2010.
The matter could get worse for Pandora given Nationwide Jewellers managing director Colin Pocklington said he was aware that the New Zealand Commerce Commission was now investigating the issue.
Winther said neither the ACCC nor Commerce Commission had been in touch with him, adding that only two Pandora stockists had contacted the company after his email in order to seek clarification on the Pandora Authorised Retailer Agreement.
“I have spoken face to face to both of these retailers and they now have a better understanding of our position and why we took the action that we did,” Winther explained.
“Other than the initial few retailers who asked for clarification, we have not received any negative feedback. Several retailers have expressed that they are happy with our decision.”
Industry reactions
Meanwhile, Carson Webb, general manager of buying group Showcase Jewellers, which represents more than 260 stores, told Jeweller that members stocking Pandora had expressed disappointment about the brand’s actions.
Webb said that the “general comments are one of concern and disappointment to receive such a letter [email].
"Many independent family-owned stores, like our members, have supported and built Pandora into the wonderful success it is within Australia. For any one brand – or supplier – to dictate to any independent retailer who they can or can’t deal with in regards to brands in their business is seriously questionable and one that I’m sure will be challenged accordingly,” he added.
Webb indicated that the decision to carry Alex and Ani was proving difficult for some retailers in lieu of Pandora’s message.
“There are members who are going ahead [with Alex and Ani] and some who are still undecided,” he said, adding, “They are very concerned for obvious reasons; the members want to continue to grow sales and support all brands or suppliers that they choose to do business with for their stores but feel they run the real risk of having the brand pulled out and the reality of those significant dollars no longer coming in. When push comes to shove, it's a very tough decision to make indeed.”
According to Pocklington, four Nationwide members had “jumped the gun” and quickly agreed to become Alex and Ani stockists.
“One of these stores had been searching for over a year to find a very strong brand to replace Pandora (as they are no longer Pandora stockists),” Pocklington explained, adding, “She decided that Alex and Ani was the best brand to try, and contacted Alex and Ani in the USA.
"Some months later, after Karin Adcock was appointed as the local distributor, they arranged for the store to become a stockist. In the first two weeks of trading, the store achieved good sales of Alex and Ani products and excellent feedback from customers."
Adcock stressed there was no similarity between Pandora and Alex and Ani jewellery, and as a result her brand could not be described as competing product regardless of whether Pandora's actions were legal.
She pointed to other jewellery brands such as Endless Jewelry and Thomas Sabo that she believed were more similar to Pandora, and questioned why the Danish company had made no comment or taken action against them.
This led Adcock to draw the conclusion that Pandora was concerned about the success of the brand in the US where it is reported to be one of the fastest growing companies with sales expected to reach US$350 million (AU$511 m) for the 2015 trading year, while Alex and Ani representatives claim it is more popular than Pandora.
More reading
Pandora jewellery in hot water over Alex and Ani
Charm offensive – Pandora warns retailers off former boss’ new brand
Adcock launches Alex and Ani in Australia
Jeweller's Hits & Misses 2015