Pandora Australia managing director Mikael Kruse Jensen announced in June it would “close a number of wholesale accounts to continue with [its] strategy.”
Jeweller contacted Jensen regarding the exact number of closures, but received no response. It is believed to be as many as 100, which would be in line with previous rounds of accounts closures in 2011 and another 100 accounts closed in 2012.
In an email to stores Jensen stated, “We appreciate that this decision may be difficult to understand for some of you, however we have made this decision to strengthen the experience we provide consumers.”
Jeweller is also aware that many of the accounts affected by Pandora’s decision have subsequently been dumping stock and, as one industry person explained, “flogging it off now to rake in the dollars. All stock is being liquidated.”
Another retailer whose account was closed said the most disappointing thing is that all back orders, including specific customer orders, were immediately cancelled which meant the store’s customers who had been waiting for Pandora to supply would now not receive their Pandora product, some of which were ordered as gifts.
Jensen's email said the company was looking to introduce more concept stores to the region, with the belief its 'flagship' stores provided customer service more in line with the company than retailers stocking multiple brands.
“Concept stores are an important part of our journey towards branded retail excellence. With concept stores, we are able to deliver personalised service by trained Pandora staff members, showcase our full jewellery universe, while also giving us the ability to implement commercial decisions faster,” he said.
The shift comes after the company announced in May that it would be taking over distribution of its product in Ireland, buying back its Pandora concept stores (franchisees). That announcement followed the company’s decision last year to take control of 23 franchises in England.
During 2016, Pandora closed 450 US and 130 Canadian accounts. At the same time, it had been expanding its international retail network of company owned and operated concept stores.
Pandora’s international sales have been in decline with Bloomberg reporting in May, “The Danish jewellery maker, which became a favourite target of hedge funds last year, sank 16 per cent after revealing weaker numbers than investors and analysts were expecting. Pandora’s dramatic slowdown in sales to China, spelled out in its first-quarter results on Tuesday, was a particular disappointment.”
It is widely believed that the recent international decisions are part of an ongoing move towards eventually closing all independent accounts with the aim of Pandora operating as a vertical-integration business model.
The news has impacted other areas of the industry, though not negatively. Ken Abbott, managing director of supplier Timesupply said he first became aware of Pandora’s decision when he suddenly started receiving calls about his branded jewellery range, Nomination.
“We have received a substantial increase in enquiries from retailers about Nomination’s composable bracelet and links which coincided with Pandora’s recent announcement.”
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