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Revenue from charms grew by 93.6 per cent while revenue from gold and silver charm bracelets grew by 83.6 per cent
Revenue from charms grew by 93.6 per cent while revenue from gold and silver charm bracelets grew by 83.6 per cent

Christmas orders boost Pandora

Danish jewellery and watch brand Pandora almost tripled its 2010 third quarter net profits with a 279.7 per cent increase from the same quarter last year. 
It recorded an increase in revenue of 116.7 per cent to DKK1, 788 million ($330 million). Revenue from charms grew by 93.6 per cent while revenue from silver and gold charm bracelets grew by 83.6 per cent from the third quarter in 2009.  

The two categories now represent 79.4 per cent of total revenue. In a promising sign for those who doubted Pandora’s ability to perform without its charms, non-charm jewellery lines constituted 20.4 per cent of revenue in the third quarter, a 10.5 per cent increase from last year.

Pandora’s EBITDA increased by 161.2 per cent to DKK807 million ($149 million) resulting in an EBITDA margin of 45.1 per cent, a 7.6 per cent increase from the same quarter last year.

On a local front, Asia Pacific’s revenue grew by 30.3 per cent to constitute 11.1 per cent of Pandora’s total sales. Australia’s sales constitute 86.4 per cent of total Asia Pacific sales.

Pandora attributed the increase in Asia Pacific sales to the strengthening of the Australian dollar and the strong growth in Asia, particularly in Hong Kong and Singapore.

Across the globe, the Americas and Europe recorded phenomenal growth, with increases in revenue of 92.8 per cent and 191.2 per cent respectively from the third quarter in 2009.

The number of Pandora’s points of sale grew by 464 stores from the second quarter in 2010 to the third quarter in 2010.

Pandora CEO Mikkel Vendelin Olesen attributed the strong performance in the third quarter of 2010 to a surge in early Christmas orders.

He also attributed the increase in revenue to a range of other varying factors.

“Our strong performance in the third quarter is a result of our continued success in upgrading our existing customers, thereby increasing the share of branded sales as well as the roll-out of new stores around the world – particularly in Italy,” Olesen said.

Pandora’s expansion in Italy in July this year was pivotal to its growth as Italy is largely regarded as Europe’s largest market for fine jewellery.

Pandora will also set up offices in a number of key global markets including Russia, China, Japan and United Arab Emirates.

Olsen also attributed Pandora’s growth to its strong performance in charms, silver and gold charms and its other broad range of jewellery collections.

The future outlook is rosy for Pandora. It predicts its revenue for the second half of 2010 to be higher than the first half of 2010 and is forecasting almost a twofold increase in its full-year 2010 revenue, from DKK3.5 billion ($646 million) in 2009 to DKK6.2 billion ($1.1billion)

Pandora has future plans to increase its branded sales channels and expand into new, developing markets.

“We will focus on branded sales channels to strengthen the perception of our brand in the retail environment and permit an expanded product offering compared with our unbranded points of sale,” the group said in a statement.

“We [also] intend to continue entering into new geographical markets and expanding our presence in existing markets.”

Pandora will seek to build on its global marketing strategies. In the third quarter of 2010, it spent DKK169 million ($31 million), 9.5 per cent of its revenue on marketing.

“To further strengthen our brand, we expect to continue spending a high single digit percentage of our revenues on marketing,” the group said in a statement.

Pandora employs 4,804 people worldwide and sells its jewellery and other branded products through 10,386 points of sale in more than 50 countries. More than 3,500 of its employees are based in Thailand were Pandora manufacturers its jewellery.

More reading:
Pandora's shares rocket
Pandora to launch limited-edition charity range
Pandora IPO to raise $112 million

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