Danish mass-market jewellery brand Pandora, which recently appointed Alexander Lacik, the current CEO of Britax Ltd., the British manufacturer of childcare products including car seats, strollers, and high chairs, as its new CEO, has determined that the major reason for the poor performance that led to the departure of CEO Anders Colding Friis is internal.
Lacik may only join by September but Pandora has already launched a two-year turnaround plan aimed at correcting those internal issues under the joint caretaker leadership of CFO Anders Boyer and COO Jeremy Schwartz, who had been brought in from The Body Shop. Pandora shares, which had dropped almost 90 percent after a profit warning that led to the former CEO’s exit, surged 18 percent in a single day after the announcement of the plan.
The company, which does a significant amount of business online, also has 2,700 brick-and-mortar stores around the world and these were identified as being the prime source of the problem. The problem was identified as store clutter, with old designs and product lines clogging their shelves, thus leaving no room for new and exiting products to entice customers — especially younger ones — to come in and browse for what they might want.
Compounding the problem was the decentralised stocking decision-making by many individual stores — mostly franchises — decide what product they would offer their customers. These stores were clearly not in tune with global trends and consumer preferences that would have let them offer products that would have enticed customers.
The turnaround plan, essentially will have the company revamp its stores and buy back old jewellery. Additionally, a centralised merchandising system headed by merchandising head Jason Morgan, who has just joined the company, will undertake product distribution strategies.
Analysts are upbeat about the plan. As CFO Boyer noted, the charm bracelet, which is the company’s backbone product line, has been around for centuries and consumers are not likely to suddenly take an aversion to them. Whether the charm bracelets being offered speak to their fashion sensibilities is what will determine the company’s future success.