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Pandora Predicts Slowdown Amid China Weakness
Feb 5, 2020 10:08 AM
By Rapaport News
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RAPAPORT... Danish jeweler Pandora expects revenue to fall 3% to 6% in 2020 following a drop in consumer sentiment in China.
“The performance in the Chinese market is not satisfactory, and continued to deteriorate in [the fourth quarter],” the company noted. “Traffic into physical stores declined by double-digit rates, only partly offset by increased traffic online.”
The forecast does not take into account the impact of the recent coronavirus outbreak. This could further hit Pandora’s sales in 2020, the jeweler warned.
“In recent weeks, the coronavirus has led to an unprecedented decline in consumer traffic in China and Hong Kong,” the retailer explained. “Due to the unpredictable nature of the situation, the full-year impact cannot be reasonably estimated at this point in time.”
Revenue fell 4% to DKK 21.87 billion ($3.23 billion) in 2019, while profit plunged 42% to DKK 2.95 billion ($434.4 million), the company reported.
Pandora recently completed the first year of its Programme Now transformation strategy, which centeres on improving key elements of the customer experience, including its store concept, products and marketing. During the year, the jeweler launched a new store image and several new jewelry items, including a Harry Potter collection that has become its fastest-selling collection ever.
The retailer also embarked on a wider program to lower costs, which included reducing its over-promotion of merchandise. During the year, Pandora decreased the number of promotional discounting days by around 35%, primarily in October and November, in the lead-up to the holiday season. Although this had an effect on the company’s sales for the year, Pandora believes it will help the business in the long run.
“During 2020, a further reduction of promotional discounting activity will be implemented,” it noted. “This will complete the commercial reset initiative that creates a healthier foundation for the company.”
Image: Pieces from the Harry Potter collection.(Pandora)
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Tags:
Coronavirus, Harry Potter, Pandora, Programme Now, Rapaport News
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