It’s probably no surprise given that only two months ago, Pandora International’s chief financial officer, Anders Boyer, said: “The first quarter was characterised by continued weak like-for-like [figures], further burdened by our deliberate commercial reset.”
At the time, he announced that 1,200 Pandora staff at its Thai manufacturing facility would lose their jobs – and that came after 700 workers were dismissed in February.
Pandora’s “reset” (otherwise known as cost-cutting) includes closing 50 ‘concept stores’ over the next year and, perhaps as a sign of Pandora’s woes, only eight concept stores were opened in the first quarter of 2019 – compared to 39 during that period in 2018.
Hence the announcement from Phil McNutt – Pandora Australia’s new CEO – on 17 June that the Sydney distribution centre would be closed in favour of handing over the company’s important customer service department to an external operation.
McNutt, who joined Pandora in January, said the decision came after a six-month review.
He advised independent stockists via email that the services performed by the in-house Pandora distribution centre “will be transferred to alternate suppliers in a phased approach from now until January next year.”
Pandora International has been undergoing a massive restructure after a long period of disappointing financial results. In mid-May Boyer warned, “I see very significant cost-saving opportunities. If revenues continue to decline, then you have to revisit the situation.”
At the time Pandora reported worrying results; global sales fell by six per cent and net profit fell 31 per cent – from DKK1.15 billion to only DKK797 million.
It was only a year ago, in June 2018, when McNutt’s predecessor at the Australian operation, Mikael Kruse Jensen, announced the closure of 100 retail accounts. The company sent emails to the affected stockists and then immediately attempted to allay the fears of remaining stockists.
That episode caused a public relations nightmare, with many retailers telling me that they were making plans to ‘dump the brand before they got dumped’.
Kruse Jensen’s email attempted to explain the reasoning, advising the spared stores: “It is important to note that this announcement does not change the nature of our relation and will have no impact on your account.”
The problem for Pandora was that no-one believed a word of it!
Now, more than 12 months on, I know many stores are continuing to move away from Pandora and their fears will only be heightened with McNutt’s latest staff sackings.
I have written in the past that there are two words that I hear consistently used in conjunction with Pandora: arrogant and conceited. Sadly, McNutt’s handling of the recent “review” of the Australian operation is not likely to change that opinion.
In an insensitive display of ‘corporate speak’, McNutt referred to the staff about to lose their jobs as “family members”; but that didn’t matter, they would be sacked anyway!
Worse, he said, “The Pandora distribution centre and its staff have been a critical and extremely successful member of the Pandora family and value chain, and we will be disappointed to see them and their contribution leave the business.”
I am not sure I have seen a better example of ‘corporate speak’ and nonsensical jargon – words and phrases used to avoid being forthright, or said to make someone believe something that is not true.
Firstly, the staff are not “leaving” – they are being sacked. And if they are “critical and extremely successful” and are part of your “family”, then why is the centre being closed?
It’s corporate speak gone mad – apparently, your critical and extremely successful staff should be sacked!
If this is how “family members” are treated, then one wonders what Pandora has planned for its remaining retail “partners”?
More reading
Pandora moves to buyback jewellery from retailers for smelting
Pandora Australia closes more accounts
Pandora: the beginning of the end
For Pandora, arrogance is a two-edged sword
Background reading
The Pandora Phenomenon
Birth of brand Pandora