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Investors have shown renewed confidence in Pandora Jewelry. Pictured: Hollywood star Millie Bobby Brown in a recent Pandora campaign.
Investors have shown renewed confidence in Pandora Jewelry. Pictured: Hollywood star Millie Bobby Brown in a recent Pandora campaign.

Pandora on a high after years in the doldrums

As reported last month, Pandora’s fortunes may have turned, with further good news following CEO Alexander Lacik’s purchase of more than 57,000 shares in the company.

The share purchase represents a financial investment of DKK23.5 million into the company by its leader, with Lacik now controlling a total of 161,628 shares. 

“At a time when peers generally have a firm grip of the purse strings, Pandora says that continued advertising spend has enabled it to better catch consumer attention”
Frans Hoyer, Svenska Handelsbanken

The past few years have not been kind to the Danish jewellery behemoth, with a number of poor management decisions and a seemingly never-ending change of senior management. However, on 8 October the company issued a positive trading update for the third quarter of 2020.

Its statement read: “The underlying brand momentum continued to develop strongly as Pandora experienced a further improvement in the majority of the main markets. In markets where the physical store network is open, a high conversion rate and continued strong performance in the online channel largely offset reduced traffic into physical stores compared to the same quarter last year.”

Shares soared 16 per cent the following day, increasing from DKK487 to DKK571 on Friday 9 October. It is a particularly impressive result, considering that the share price was only DKK289 in late August 2019 when the brand underwent a major relaunch due to flagging sales, poor designs and sell-through performance.

Pandora management now expects 2020 EBIT margin to reach more than 17 per cent – compared with 16 per cent previously – and that is after online ‘organic growth’ (sales increase) of 89 per cent in the third quarter.

» Background reading: Pandora past the peak?

Frans Hoyer, an analyst at Sweden’s Handelsbanken, told US-based financial publication Bloomberg that Pandora seems to be getting “more bang for the buck” from its advertising, and is “catching consumer attention as peers hold back” on spending.

“At a time when peers generally have a firm grip of the purse strings, Pandora says that continued advertising spend has enabled it to better catch consumer attention,” Hoyer explained. 

In other related news, the company announced that BlackRock, the US-based global investment management firm, controls the voting rights to approximately 6.9 million Pandora shares – which corresponds to 6.91 per cent of the entire share capital and voting rights.

Additionally, BlackRock controls the voting rights to a further 2.52 per cent through indirect financial structures.

The renewed investor confidence in the company is timely, given that Pandora recently launched a limited-edition range of Star Wars-themed jewellery, designed in partnership with production company Lucasfilm.

The pieces include charms and a bracelet, and feature characters such as Darth Vader, R2D2, Princess Leia, and The Child – also known as ‘Baby Yoda’ – from The Mandalorian series, as well as light sabers and the iconic Star Wars logo.

 

More reading:
No surprise, Pandora got it wrong
Pandora: The beginning of the end?
For Pandora, arrogance is a two-edged sword
Pandora - the charm before the storm? 
 











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