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RAPAPORT... Pandora reported that group revenue was flat in 2012 at $1.17 billion (DKK 6.652 billion), while gross margin as a percentage of sales slipped to 66.6 percent from 73 percent one year ago. Profit plunged 41 percent year on year to $211 million (DKK 1.202 billion). Free cash flow dropped 31 percent to $202 million (DKK 1.151 billion). Sales in local currency fell 2.5 percent in the Americas, dropped 5 percent in Europe and plunged nearly 18 percent in the Asia-Pacific region. However, revenue as measured in Danish krone rose 1.2 percent year on year in the U.S. to $452 million (DK 2.579 billion) and for sales from ''other'' countries, the company reported an increase of 13 percent to $371 million (DKK 2.117 billion). Revenue declined elsewhere with sales in Australia down 6 percent to $108 million (DKK 618 million), 9 percent in the U.K. to $152 million (DKK 869 million) and 26 percent in Germany to $82 million (DKK 469 million). Pandora terminated its arrangement with distributor Verite Co. Ltd. for Japan, and entered into a new deal with Bluebell Japan Ltd. for the region. The jeweler expects to open about 150 new stores globally this year, launch online retail in Europe and achieve global revenue of about $1.4 billion (DKK 7.7 billion). The company's CEO, Bjorn Gulden, described 2012 as the year of ''re-setting the business'' as the foundation for which to grow in 2013. The company realigned its products and prices in the first quarter of 2012, improved quality of stock and replaced slow moving items with better sellers in the second quarter. These initiatives resulted in stronger performance for the third and fourth quarters, according to Gulden. "The new innovative products at commercial prices launched in 2012 have sold in and out very well. The retailers have reacted very positively to our stock balancing program and we can now see that their stock improved, both in terms of quality and value compared to a year ago. "The sales-out has improved in all major markets and we are especially pleased to see the development in Australia and the U.K. The U.S. has continued to perform well. The German market has improved in sales-out but it will take more time and consistent execution until we improve our sales-in. We are continuing to invest in new markets and have in 2012 seen a very positive development in markets like Russia, Italy and France," he said.
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