Pandora planning no permanent store closures
Jewellery giant Pandora won't be closing any of its thousands of stores permanently as a result of the business downturn due to the pandemic.
In an interview, CEO Alexander Lacik, also said that staff would continue to receive the their salaries and that the business was able to "withstand a big drop in sales" before even needing to think about any shop closures.
Lacik told the BBC that of the 2,700 stores the company operates, 80% of them were closed at the height of the pandemic and staff continued to be paid by the firm during that period, including the 28,000 that were unable to work.
At present, he estimated that 18% of Pandora shops are closed due to the Covid second wave in Europe and that sales in the important Christmas shopping season would be hurt as a result.
That said, the company is continuing its festive marketing campaign and is currently advertising on TV. In the UK for instance, its shops in England are shut, but its TV ads will be driving customers to its webstore.
Pandora’s web sales have surged this year with an 89% increase in Q3, the three months to the end of September. That meant they accounted for 21% of the total sales figure.
But Lacik insists that physical retail will "continue being an important part of the industry at large", because consumers want a "seamless" way to shop whether they want to do so physically or digitally.
The company’s shops are "incredibly profitable", the CEO told the BBC, that statement following heavy investment in improving the in-store experience.
And Lacik added that in areas where the company has closed down any physical shops, it has also seen a reduction in online sales. “A combination of the two. That seems to be the sweet spot” for now, he said.
The interview came a week after the company announced Q3 results in which it reported that e-tail surge but said it overall sales fell 2%. This was better than the -20% for the first nine months, however. Sales fell 5% on an organic basis in Q3 as revenue dipped to DKK4.07 billion (€546m/£492m/$649m), while the gross margin dropped to 78.1% from 78.6%.
It said Q4 has started in line with the trends from the second half of Q3, with October sales growth of 8%.
But the company was unable to issue updated guidance because of current store closures and the ongoing uncertainty around the pandemic situation.
It said the performance in Q3 “is a solid indication of the continued brand turnaround with five out of the seven key markets generating positive sell-out growth despite Covid-19. The performance demonstrates that the Programme NOW initiatives are driving traffic and engagement with the brand. The new organisational structure, including a global merchandising structure and best-practice sharing, supported a material conversion rate improvement, both online and offline”.
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