Love ‘em or hate ‘em, the tiny Pandora beads changed the Australian jewellery industry.
Karin and Brook Adcock launched their new jewellery business in 2004 from their garage in Sydney. Little did she know that in only a few short years the business would have grown to 200 staff with sales revenue in the tens of millions.
Nor would she have known that the Australian arm of the Danish designed brand would go on to become the model for all of Pandora’s other international markets.
Karin Adcock has remained the ‘face’ of Pandora Australia from day one, guiding the business through exponential sales growth, enormous expansion into more than 700 outlets across Australia and New Zealand and a buy-back from the Danish company as part of a listing on the Danish stock exchange in 2009.
While the company has rationalised (closed) many stockists over the last two years, Pandora’s success can only be described as phenomenal, at one point achieving more than $130 million in annual sales revenue (wholesale) which industry experts say represented at least $300 million at retail.
All that in only eight years! However, such success takes it’s toll and after eight years at the helm, Adcock announced last week she would be stepping down as president of Pandora Australia and would hand the day-to-day management to David Allen, the company’s vice president, sales.
Allen will take over as president when Adcock departs on July 1.
Adcock took time-out for a candid interview with Jeweller editor, COLEBY NCHOLSON, who asked what it was like being a ‘tall poppy’ of the Australian and New Zealand jewellery industries and would she have done things differently?
Nicholson - You announced that you would be stepping down from day-to-day operations last week but when did you start thinking it was time for a change?
Adcock - I started seriously thinking about it a year ago. When we sold the business we had a two-year binding agreement to stay and when that finished in August 2011, I started to think ‘what now?’ and ‘what would I do?” It’s been a very difficult decision because I’ve loved every minute of the business and I am very close to the staff here, and I also have great relationships with the retailers and that’s very hard to let go.
Was there any one thing that indicated that it was time for a change?
It’s been combination of many things. I’ve managed the company for eight years and we have built it into a great company that has gone great places but I would now like to spend more time with my family. The position involves lots of travel and I’d like to have more personal time. I will maintain an involvement in Pandora Australia but I won’t be involved in the daily running of the business.
You have effectively been the ‘face’ of Pandora for eight years. How have the staff taken the news and what was the reaction from your stockists?
That was a hard one. I have represented the heart and soul of the business; there were a few tears. I think it will take a little while before the staff comes to terms with it.
We have a very low staff turnover, once they join us they become part of the team and we’ve built this business on a very strong sense of values and mutual respect for each other and that has got us to where we are today and people love working here. We have enjoyed working together. I told the staff I wouldn’t hand over the reins to anyone who I was not 100 per cent confident in taking Pandora forward.
The announcement was made late on Tuesday [last week] and I’ve received over 60 emails from stockists. I’ve had a very close relationship, especially with the first stockists and the majority understand my decision and have wished me the best of luck.
You step down on July 1 but will continue to hold positions on the Pandora Australia Advisory Board and the Franchise Advisory Council. What does that involve?
The Advisory Board meets monthly and the Franchise Advisory Council meets quarterly. By maintaining this involvement it will allow me to help David [Allen, new president] and other people with important decisions.
What will you do with your extra spare time given the long work days you are used to?
I’m never going to sit back and do nothing. I have lots of ideas about things I’d like to do, but I’ll take a few months off but there’s lots of things I want to do.
With annual revenue of more than $120 million, did you ever expect such success when pounding the streets in 2004 looking for stockists?
The reported $128 million annual revenue figure for Australia and New Zealand is what we call consolidated revenue so it is a mix of wholesale and the concept [franchise] stores, and obviously the value of Pandora’s sales at retail would be much higher than that.
But no, I never imaged it would ever get to anything like that! For example, when I was preparing the business plan to present to Pandora Denmark in 2004 to convince them to let me distribute in Australia, when I did the sales forecast and included the expenses which included staff, I thought, “Gee, these numbers are starting to get really big!”
I got worried so I stopped the budget at seven staff and $200,000 of annual sales.
What do you believe made Pandora so successful in Australia?
The first thing has to be the product. It was a jewellery collection that appealed to women who wanted to create their own individual style. Pandora is jewellery that can encapsulate special moments in life and moments shared between friends and family and loved ones, that was such a unique concept at the time.
But I think that’s also true of Pandora’s success all around the world. If we look at why it has been so successful in Australia, then I think that it was because it was an advantage that I did not come from the industry. I had no previous experience in the jewellery industry but I was so in love with the product myself and I would not take no for an answer, so that passion flowed through to the stores.
Humble beginnings: Karin Adcock on the Pandora stand at the 2005 Sydney Jewellery Fair
You believe that your lack of jewellery industry experience was beneficial to the success of the brand?
It was a huge advantage not coming from the industry because I didn’t know the ‘rules’, I didn’t know all the things that you were supposed to not be able to do. My fundamental view was that I needed to build relationships.
I tried many, many different avenues, and some would work and others wouldn’t. But by trying many different things half of them did work as opposed to, “you can only do this or that”, or “this is how we normally do it”.
I think that has been a tremendous help in getting us to where we are today.
And the other thing is using common sense. That has been a huge part of the success as well, don’t make things complicated; KISS - keep it simple, stupid.
It was all about the customer. Nothing got in the way of that, in terms of how the industry was meant to work. It was all about, “how can I get the customer to fall in love with the Pandora as much as I do?”
Looking back, is there anything you would do differently?
I don’t think so and the reason for that is we constantly re-assessed our operations. For example, three years ago I sent a Christmas present to all our retailers. It was a book called Who moved my cheese?. The aim was to try to explain to retailers why we [Pandora] constantly had to change because the environment around us was changing.
Change is something we, internally, have also struggled enormously with because everybody would just get settled and things would have to change again. Staff would ask, “Karin, why do we have to change again?”
I’d explain we need to change and adapt to the environment or we will become stale and irrelevant.
So no, I don’t think I would have done anything differently, I think we did what we had to do to keep looking at different avenues to push the brand forward and some of those have come at a cost.
I know the store closures we’ve had to do twice have been very difficult and heart wrenching. I know a lot of the stores [owners] we had to close and I know what Pandora meant to them but we had to do it to keep pushing the brand forward.
Australia’s retail industry is doing it tough right now, especially discretionary categories like jewellery, how tough is Pandora finding the market in Australia?
We are coming from an extraordinarily high base and when we look at our actual performance in our market we are still doing very well. Our concept stores are performing to expectations.
However, we are very aware that two years ago we didn’t have to push sales but now we are very aware we have to work hard to get a sale, but I think all clever retailers do that.
We think we are in a relatively good state compared the industry out there. The sales are not coming to us magically now, that’s one of the biggest challenges now because retailers have been used to Pandora selling by itself, they have to ‘sell’ it now.
We have to work harder and we all knew the peak [of a few years ago] was not going to last.
Pandora has been seen as a ‘tall poppy’ in the Australian jewellery industry, with constant predictions of the demise of the brand? How did you deal with that and was it the same overseas?
To some degree Pandora has experienced the tall poppy syndrome overseas. And while it did happen a little here I have experienced more of the other side.
I mean there were [competing] wholesalers who might have been disappointed that they were not the one who had Pandora but most competitors realised what the brand did for the industry.
Most people recognised that often Pandora brought customers into a store which generated more general sales in local jewellery stores. So new customers that came into a store to look at Pandora jewellery were then exposed to other high value products like diamond rings.
For example, I think more diamond rings were bought in local stores as opposed to city stores because the customer now had a relationship with the local jeweller. Customers started using their local jewellery store to a much higher degree than perhaps they had before they bought Pandora.
The negativity [tall poppy syndrome] is always out there but I have chosen to focus on our colleagues that applauded what we achieved.
Someone once told me the first time you walked into their store in 2004 to show Pandora, it was presented in an ugly polystyrene box. Do you still have that box or is it in the Pandora ‘museum’?
No I don’t! (Laughing) I remember that, and I can’t believe I don’t have it. We have kept a lot of the ‘old’ things and I will have to find out where that is!