At Pandora, focus continues to shift inward

Copenhagen, Denmark--Pandora will open a greater number of concept stores than originally planned this year with a particular emphasis on company-owned and -operated stores, it said Tuesday when reporting  third quarter results. 

In August, Pandora announced that it was buying the 27 concept stores owned and operated by Hannoush Jewelers for $28 million. The company said it was “refreshing the network” in the Northeastern U.S. due to slumping sales.

Pandora said Tuesday it now owns 22 of those stores and is remodeling them, as planned, at an estimated cost of $6 million.

It sold the remaining five, all of which are located outside the Northeast, to Ben Bridge Jeweler, Morten Raunholt Eismark, Pandora vice president and head of investor relations and group communications, told National Jeweler Wednesday.

The company said by years’ end, it expects to have opened more than 300 new concept stores, up from its previous prediction of 275. Eismark said while the network is expanding in developed markets like the U.S., there is slightly more of an emphasis on newer markets, such as Russia, Italy, France and countries in the Asia-Pacific region.

The number of these stores opening in the fourth quarter that will be Pandora-owned and -operated--as opposed to being run by an independent jeweler who acts as a franchisee--will be “proportionally higher” when compared with concept stores opened in the same period last year. 

In the third quarter, Pandora reported that sales rose 26 percent globally to $478 million year-over-year. 

U.S. sales increased 15 percent (14 percent in local currency) from $122.3 million to $140.7 million. Revenue from rings increased significantly year-over-year. 

Same-store sales at U.S. concept stores rose 4 percent. Sales in the Northeast remain weak, as previously noted by the company, whereas same-store sales in all other regions of the country are growing in the mid-single digits. 

Also during the quarter, the Copenhagen-based bead company announced that CEO Allan Leighton would resign in March 2015 and be replaced by Anders Colding Friis, the CEO of Scandinavian Tobacco Group, the world’s largest manufacturer of cigars and pipe tobacco. It will be the company’s fifth CEO since going public in 2010. 

In addition, CFO Henrik Holmark is stepping down as chief financial officer on Jan. 1 to join Dr. Martens Airwair Group Ltd. Replacing Holmark will be Peter Vekslund, currently Pandora’s senior vice president and head of finance.