The company also announced a new celebrity face and entertainment partnership, less than two weeks ahead of its highly publicised ‘brand re-launch’ event on 28 August.
Australia was the second-worst performer of Pandora’s top seven markets. On a like-for-like basis, Pandora Australia fell 17 per cent compared with the same period last year, and 18 per cent for the year-to-date. Sales growth was equally poor, falling 17 per cent compared with last year and 21 per cent for the year-to-date.
Reflecting consumers’ shifting shopping patterns, quarterly like-for-like instore sales decreased 8 per cent but increased 22 per cent for online.
Pandora announced a global overhaul of its IT system in July, and is currently piloting mobile-first retail as well as click-and-collect in overseas markets.
Other key details of Pandora International’s marketing strategy and turnaround initiatives, under new CEO Alexander Lacik, were revealed in the report. While estimated costs of the restructuring have now increased to DKK2 billion ($AU440 million), Pandora’s share price rebounded by 6.5 per cent to DKK248.30 after the announcement, indicating market confidence that the strategy can reverse its prolonged sales slump.
Speaking to the Bloomberg Daybreak Europe radio show, Lacik said, “The company has been on a slide for two to three years if you look at underlying performance. We are just heading into the brand re-launch… where we’ve tried to overhaul all the main touchpoints that consumers have with the brand. So I think we have an exciting future ahead of us, instead of looking too much on the history.
“We are on proper turnaround journey, which goes well beyond Christmas. We are trying to get off to a strong start, obviously. But it all boils down to making sure this brand is more relevant than it has been in the last few years,” he added.
As part of efforts to revitalise the Pandora brand, the product line will be refocused on collectable and customisable pieces. The product range will be reduced by 30 per cent in order to cut manufacturing costs and streamline the offering to consumers.
“As an example, we have, I think 150 different variations of a heart on a charm. And when you speak to customers, they clearly don’t see the incremental value,” Lacik told Reuters.
According to the report, the recent inventory buyback program is also likely to be extended and the cost of sell-in packages for retailers reduced.
In an effort to target younger consumers, 15-year-old Stranger Things actress Millie Bobby Brown has signed a two-year contract to promote the Pandora collection, starting with a digital campaign that launches in October. Six other ‘global influencers’ have also been tapped to advertise the brand online.
Additionally, Pandora has created a 12-piece hand-finished Harry Potter-themed collection that will be available in stores and online from 28 November 2019.
Stephen Fairchild, chief creative and brand officer Pandora International, said, “Harry Potter has brought joy and a belief in magic to generations and Pandora fans have asked for this collection for years.”
The Pandora logo and monogram will also be updated.
Lacik, who was formerly CEO of child safety product manufacturer Britax, has a marketing background and is described as a ‘turnaround expert’. Under his leadership, Pandora doubled its marketing spend in Italy and the UK over the past three months and will increase its marketing investment across its other major markets, including Australia, over the rest of 2019.
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