Wednesday, 8 August 2012

Pandora Slipping

It’s not exactly news to anyone that Pandora is on the downside of a slippery slope.  Most faithful Pandora dealers I’ve spoken with are optimistic that the slide may be slow and gradual.  Few expect resurgence.  The recent IDEX Online: Pandora’s Q2 sales down 9.5% article allowed me to try my hand at reading between the lines:

IDEX: “Europe … drop of 17 percent.  The America’s saw a decline of 5 percent and Asia Pacific fell 8.1 percent.”  

Toddwaz: As we tend to lag international trends, Canada will see decreases rise to 8 and then 15% over the next year or so.

IDEX: “The company said it expects to open approximately 200 new concept stores in 2012”

Toddwaz: Jewellers are abandoning us left, right and center, but what do they know?  We’ll show them.  We’ll open up our own stores in a desperate attempt to prolong the gravy-train.

IDEX: (quoting CEO Bjorn Gulden) “our offering is now again competitive with the right commercial price points for our jewelry”

Toddwaz: Now that our business is declining, we can’t gouge our retailers any more.

IDEX: “Pandora is conducting a one-off, time-limited stock balancing campaign… and the part of the campaign run so far has achieved a high participation rate from retailers”

Toddwaz: We still have some liquidity, so we’ll take this hit in a desperate attempt to swap-out beads that are no longer turning-over for jewellery which has never turned well; and those suckers are falling for it in droves; ‘cause what choice do they have.

Does The Toddwaz have it in for Pandora?  Well, kind of.  It has deflected attention away from gold and diamonds.  It has driven down the average ticket of jewellery shoppers.  During the growth-phase it sucked cash-flow out of jewellery stores with their pre-pay terms and swelling inventories.  Some pretty sharp jewellers who have made major commitments to Pandora are now effectively fighting for sales against jewellers who continue to focus on traditional jewellery.

Is there anything good about Pandora?  Sure.  Some of my retailers have been strengthened financially and have reinvested proceeds into developing their fine jewellery business.  It has forced retailers into a greater awareness of “turns” and “ROI.”  It has caused fine jewellery marketers to step-up their game and defend their turf.

If Toddwaz was in retail would he include Pandora in his inventory?  Five years ago – I hope I would have.

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