Jewellery retailer Pandora has unveiled an initiative that it hopes will reignite sustainable revenue growth, Programme Now, after group revenue dropped 3 per cent in the third quarter of 2018.
Under the program, Pandora will significantly reduce its franchise acquisitions and scale back new store openings. For the stores it does open, it will concentrate on growth markets, such as China, India and Latin America. It hopes the move will grow like-for-like sales, if not total sales.
In order to achieve this, the business plans to enhance its marketing, personalisation, digital and e-commerce capabilities, as well as the in-store customer experience.
Pandora also noted that part of its success moving forward lies in execution in all parts of the value chain, as well as more closely coordinating parts of the business to work in tandem, to reduce costs.
The implementation of the program, as well as the weak Q3 results, however, have led the company to revise its expected FY18 financial guidance.
Pandora has cut its annual revenue forecast from between 4 and 7 per cent to between 2 and 4 per cent, or DKK 1.4 billion to DKK 1.2 billion ($296 million to $253.9 million).
“The third quarter results were unsatisfactory and we adjust our full year guidance,” Pandora chief financial officer Anders Boyer said.
“We have taken the first major step in the programme today by changing our network expansion plan. We have confidence in a strong future for Pandora and will use 2018 and 2019 to reset the business.”
Pandora expects revenue and total like-for-like growth to be impacted through to 2020 by the planned reduction of mark-downs, though this is likely to cause a margin neutral result on the group level.
This article first appeared in Inside Retail, a sibling publication to Inside Franchise Business.
