The exception to the downward trend was China, which recorded stable sales and accounted for 10 per cent of total revenue.
However, the recent outbreak of the coronavirus is predicted to have a significant impact on revenue in the first quarter of 2020.
Pandora has temporarily closed more than 50 Chinese stores as a result of the disease, and locations that have remained open have seen reduced foot traffic.
Anders Boyer, chief financial officer Pandora Jewellery, said, “We have seen empty streets in China. It’s quite dramatic. The situation is highly unpredictable.”
Total revenue fell from DKK22.8 billion ($AU5 billion) in 2018 to DKK21.9 billion ($AU4.8 billion).
Just four years ago, the company’s revenue growth reached 40.2 per cent. It has declined every year since.
However, the 2019 report noted some positive developments.
Following the company’s highly publicised ‘brand re-launch’ in August 2019 – including new marketing materials, advertising campaigns with social media influencers, and redesigned stores – like-for-like sales showed a modest increase.
Additionally, the international Black Friday sale, which fell on 29 November last year, was Pandora’s most successful e-commerce event in its history. The sale took place after the company entered a ‘strategic technology partnership’ with Danish IT firm Tata Consultancy Services to improve its e-commerce business.
Within the same period, Pandora also launched new collection aimed at younger customers, promoted by 15-year-old Stranger Things actress Millie Bobby Brown. Another collection, inspired by Harry Potter, also proved to be popular with customers, accounting for 4.6 per cent of total sales in November and December.
In the annual report, CEO Alexander Lacik – who joined Pandora in April 2019 – noted, “With 2019 behind us, we have completed the first year of our two-year turnaround. We have made significant changes in a very short time, and the results in Q4 give us confidence.
“Consumers are responding positively to our commercial initiatives. Like-for-like is improving, and we have built a healthier foundation for the business.”
In a tele-conference call with investors, Lacik added, “Our decline can be reversed,” but cautioned against raising expectations for the year ahead.
Changes to retail strategy
Over the past five years, Pandora has continued to close retailer accounts in favour of its own franchised stores.
In 2019, revenue from Pandora-owned retail represented 65 per cent of total revenue. Meanwhile, revenue from the wholesale channel decreased by 24 per cent from 2018.
However, during the investor call, CEO Lacik indicated that the company’s strategy may change.
“There hasn’t been an awful lot of attention to multi-brand stores in the last few years. The push has been [company] owned and [franchise] operated stores. We have seen there are some opportunities that we have forgone by reducing the multi-brand [independent stockists] presence so much. A lot of new customers might come through a multi-brand rather than a concept store,” he said.
He also stated that the company would continue to invest in new marketing initiatives under the leadership of chief marketing officer Carla Liuni, who will join Pandora in March.
Liuni was formerly vice-president of global marketing and communications at Italian watch and jewellery brand Bulgari.
The Pandora board of directors has also appointed a new chairman, Peter A Ruzicka, who replaced Peder Tuborgh on 1 January 2020.
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