Pandora is hoping to increase the number of concept stores it has worldwide
Pandora price increases yet to hit Australia
Posted May 24, 2011 | By Sonia Nair
Price increases from Pandora have received mixed responses in the jewellery company’s global markets, but Australian stockists have yet to feel the full impact.
Pandora implemented price increases in all its markets except Australia during its first quarter, a move the brand attributed to the need to offset the impact of escalating gold and silver prices. It only increased its jewellery prices in Australia in April 2011.
”We implemented the prise rise in conjunction with the release of our new collection and new brochures,” Pandora managing director Karin Adcock said.
Pandora chief executive Mikkel Vendelin Olesen conceded that sales in some markets experienced a moderate slowdown in the immediate aftermath of the price increases, but said the general sentiment was one of cautious optimism.
“Reaction to our price increases has varied across markets depending on timing of the price increase, the current consumer environment and the strength of the Pandora brand in that market,” Olesen said.
“In general, there is some impact on volumes in the two to four months following a price increase, after which volumes gradually recover,” he added.
Olesen said it would only be possible to measure the true impact of the price increases in Australia when Pandora posts its second-quarter results.
Pandora faces challenging Australian market
In local currency, Australian revenues declined 6.9 per cent during the three-month period between January and March – however, the increasing value of the Australian dollar meant revenues actually climbed 4.8 per cent, to DKK174 million ($31.3 million).
Australia currently accounts for 10 per cent of Pandora’s global revenue, a 3.4 per cent drop compared with last year.
Pandora attributed challenging market conditions in Australia to low consumer confidence and its high market penetration.
To counter the weak trading conditions, Pandora focused on branded sales that coincided with the closing of approximately 228 non-branded store accounts, 100 of which were in Australia and New Zealand.
Adcock explained that Pandora defines a non-branded store as a multi-branded retailer that does not have Pandora furniture.
“We have many multi-branded retailers in the Australian network who are [defined as] Pandora branded stores as they have Pandora furniture installations within their environment,” Adcock said.
Pandora said it made the decision to close a number of “White” and “Silver”-tiered accounts to improve the long-term positioning of the brand, despite the negative impact on its immediate revenue.
Conversely, Pandora opened 157 new branded store accounts worldwide in the first quarter – 30 of which were Concept stores, 28 shop-in-shops and 99 “Gold”-level accounts.
Pandora will continue to expand the number of branded store accounts it has in 2011 and aims to open more than 250 new Concept stores worldwide by the end of the year.
Revenue in America soared 34.1 per cent and revenue in the UK rocketed 45 per cent against the first quarter of last year.
More reading:
Pandora upbeat despite Australian revenue drop
Pandora concept stores to debut in NZ
Pandora to close accounts
Pandora reveals criteria for account closures