Pandora Continues to Reduce No. of Multi-Branded Retailers

Copenhagen, Denmark--In the second quarter, Pandora continued to trim its network of multi-branded retailers in the Americas while opening more shop-in-shops and concept stores.

The Copenhagen-based bead and jewelry brand started the quarter with 1,783 multi-branded points of sale (gold-, silver-, white- and travel-level retailers) in the Americas and ended it with 1,679, a reduction of 104.

Since the year began, the number of multi-branded retailers that carry Pandora is down by a count of 159 doors, from 1,838 to 1,679. More than half of those (98) are the Jared the Galleria of Jewelry stores it has upgraded to shop-in-shops so far.

While Pandora did not specify how many of the 159 accounts it closed were gold- vs. silver-, white- and travel-level retailers, the company’s president for the Americas, Scott Burger, said in an interview earlier this year that the company thinks all retailers that carry Pandora should be gold-level or shop-in-shops.

The number of Pandora concept stores in the America, meanwhile, increased from 519 to 540 in the quarter while the number of shop-in-shops grew from 682 to 798.

In terms of revenue, Pandora reported a 5 percent year-over-year increase in sales in the Americas (10 percent in local currency). Sales in the United States rose 8 percent (11 percent in local currency).

Shop-in-shop revenue was down 4 percent in the quarter, due in part to the strong comps related to the Disney collection sell-in in the second quarter of 2015.

U.S. like-for-like concept store sales were up 2 percent, in spite of competition from Pandora’s online store and a “difficult retail environment.”

Product-wise, the company said that rings performed “very well” in the region, while charm sales were flat in local currency.

“All regions,” Pandora CEO Anders Colding Friis said in commenting on the results, “were supported by our continued focus on product diversification into rings and earrings.”

Globally, Pandora saw second quarter sales increase 20 percent (25 percent in local currency) year-over-year to $645.1 million.

The company noted that one-third of the revenue growth was organic, while two-thirds was attributable to the new stores and e-stores that opened in the last 12 months, including concept stores that the company bought back from retailers.

Gross margin increased from 71.5 percent to 75.3 percent.

Net profit for the quarter was $181.8 million, up from $135.6 million in the second quarter of 2015.