Pandora Names New CEO

Silver jewelry company Pandora has appointed retail veteran Björn Gulden as its new CEO, effective March 1.

Gulden , 46, is currently managing director of the Deichmann Group and president and CEO of its wholly owned retail chains Rack Room Shoes and Off Broadway Shoes in the U.S. Prior to those positions, Gulden was senior VP of apparel and accessories at Adidas and was part of the management group that took Adidas public in 1995. The Swiss native and Norwegian citizen also played professional soccer in Norway and Germany before a serious injury ended his career.

Gulden replaces Mikkel Vendelin Olesen, who resigned suddenly in early August due to lower-than-expected growth, which the company blamed on commodity price increases and “inadequate” execution.

The Danish company with manufacturing facilities in Thailand is known for its widely popular charm jewelry. The company is also known in the jewelry and financial industries for its extraordinary sales growth and its $2.1 billion IPO, launched in October 2010.

However, in early August, the company released its second quarter financial report two weeks early with less than expected growth as well as declines in major markets. It also drastically downgraded its sales and profits targets for 2011 and reported a drastic decline in July revenues. The result was that its stock fell about 70 percent in a single day.

Marcello Bottoli, who was named interim CEO during the August turmoil, will continue in that position until Gulden arrives and will report Pandora´s 2011 annual results on Feb. 21, 2012.

Pandora also announced that as of March 2012, Marcello will become deputy chairman of its board of directors in order to take advantage of what has has learned as interim CEO. Current deputy chairman, Torben Ballegaard Sørensen, will continue as member of the board.

“Björn is an outstanding executive who has impressed me with his knowledge and hands-on experience from many years in the retail and wholesale business around the world,” said Allan Leighton, Pandora chairman.

There’s an App for Pandora

The Pandora jewelry company, known for its charm bracelets and its $2 billion initial public offering, has launched iphone and Facebook applications designed to create an interactive shopping experience.

The Copenhagen-based jewelry company’s first iPhone app allows consumers to share Pandora fine jewelry pieces via Facebook, e-mail or by adding it to their personalized Pandora “Wish List” page online. Consumers will have instant access to all of Pandora’s collections, including customizable charm bracelets, rings, earrings, necklaces and watches.

Pandora’s “Bracelet Designer” is a bracelet building Facebook app. Its 150,000 Facebook fans can select charms from the company’s “Moments” collection to create a personalized charm bracelet and share their unique bracelet designs with others. This app actually launched in October. Consumers can select from seven different sterling silver or 14K gold bracelet options and more than 800 charms.

The Facebook app tracks the cost of each charm selected along with the total cost of the bracelet. When done designing their personal bracelet, consumers can find the nearest Pandora store locations and print or download a picture of the bracelet with the list of selected charms to take to the store or share with others as a gift idea. They also can post their newly created Pandora bracelet to their Facebook status and Twitter page. Once a bracelet is designed, consumers can share comments and "like" designs of other fans as well as view international and local top ten charts listing the bracelet designs that have received the most "likes" and bracelets with the most comments.

Pandora Q3 Sales Double, Profits Triple

The new darling of the jewelry industry and the investment world, Pandora, said Thursday that sales in the third quarter more than doubled and profit nearly tripled, year-over-year, driven by growth across all regions and jewelry categories, according to media reports.

Total revenues for the Copenhagen-based jewelry company grew by 117 percent year on year to 1.79 billion Danish crowns ($329,100), with 48 percent of total sales from Europe and 41 percent from the U.S. Much of that growth was due to early Christmas orders, the company reportedly said.

Sales of its top product, charms and charms bracelets (which accounted for 79 percent of total sales) increased 94 percent. Despite the high cost of precious metal, sales of silver and gold charms were up 84 percent.

Pandora’s other jewelry sectors, such as its high-end Love Pods collection, has a 345 percent sales increase. The non-charm jewelry lines accounted for 20 percent of revenues in the quarter, up from 10 percent in the same quarter in 2009.

Sales in the U.S. market rose 93 percent, representing 41 percent of total sales. The Asia-Pacific region (which accounts for 11 percent of total sales) grew by 30 percent for the period.

Net profit at Pandora rose 280 percent to 581 million Danish crowns ($106.8 million) in the third quarter. Gross margin at the group in the quarter was 73 percent, up from 66 percent in the third quarter of 2009 when the gross margin was impacted by an unrealized gain on raw materials and a negative one‐off effect from taking over the company’s Australian distributor.

“Our strong performance in the third quarter of 2010 is a result of our continued success in upgrading our existing customers, thereby increasing the share of branded sales as well as roll‐out of new stores around the world—particularly in Italy,” Mikkel Vendelin Olesen, Pandora chief executive, reportedly said. “We have seen continued strong momentum in the revenue development from our charms and silver and gold charm bracelets as well as excellent performance from our other jewelry collections. However, it is important to notice that our Q3 also is positively impacted by early Christmas orders from retailers.”

Pandora had a spectacular debut on the Copenhagen bourse on Oct. 5 with a $2 billion IPO. The company manufactures and distributes mass market jewelry, priced between $50 and $1,500, designed at its Copenhagen headquarters and made in Thailand.

Pandora Produces Charming Q3 Sales and Profit Gains

Danish jewelry company Pandora said Tuesday that third quarter revenue increased 14.3 percent, year-over-year, to DKK 1.79 billion ($308 million) with double-digit gains across all geographical markets. Net profit for the period increased by 11.4 percent to DKK 380 million ($65.2 million).

This is a strong turnaround when compared with second quarter results in which the company—best known for the manufacture, distribution and marketing of silver charm jewelry—said its sales fell by 9.5 percent to 1.26 billion DKK ($210.2 million) with profit during the same period down 89.9 percent to 63 million DKK ($10.5 million).

Pandora also said Tuesday that its stock balancing plan (replacing discontinued stock) is continuing as planned. In the third quarter, the company received returns of discontinued products with a wholesale value of DKK 86 million ($14.7 million), and replaced it with merchandising costing DKK 127 million ($21.8 million). In 2012 Pandora received returns of discontinued products valued at DKK 609 million ($104.6 million), and replaced DKK 599 million ($102.8 million).

Revenue by geographic region is as follows:

• Americas increased by 21.9 percent (9.5 percent in local currency), with U.S. sales up 15.8 percent (2.6 percent in local currency).
• Europe increased by 13.1 percent (11 percent in local currency).
• Asia Pacific decreased by 10.7 percent (17.3 percent in local currency).

Branded revenue as percentage of total revenue increased to 81.3 percent, compared with 73.6 percent in third quarter of 2011. Gross margin was 64.1 percent, compared with 73.6 percent in the third quarter of 2011.

EBITDA margin was 28 percent, compared with 34.2 percent in Q3 2011, a decrease of 6.2 percent to DKK 503 million ($86.3 million). EBIT margin was 25.8 percent compared with 32.2 percent in Q3 2011, an 8.5 percent drop to DKK 463 million ($79.5 million).

The company, which sells its jewelry through retail jewelers and its own branded retail stores, updated its outlook, saying it expects revenue for 2012 to be above DKK 6.3 billion ($1.08 billion), from its previous guidance above DKK 6 billion.

“I am happy to report that we continue to perform in line with our ‘18 months turn-around plan,’” said Björn Gulden, Pandora CEO. “Third quarter developed even a little better than we expected and we have, based on the tailwind from the currency development, decided to slightly upgrade our revenue guidance. One of our major initiatives ‘The stock balancing campaign’ was continued, mainly impacting the U.S. and third-party distribution, during Q3 2012. We have now largely concluded the campaign and it will, as communicated earlier, be finished by end of 2012.”

Gulden added its spring merchandise sold well and its fall merchandise had a strong start for the third quarter.

“The year is not yet finished,” he said. “We have our most important quarter to come, but we feel confident that our improved product, our lower prices and our other operational improvements will put us in the position of achieving our updated financial goals for the full year.”

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Pandora Joins Responsible Jewellery Council

Pandora, the Danish jewelry designer and manufacturer that recently executed a $2 billion initial public offering, is now attempting to make its mark as an ethical, humane and environmentally sensitive company by joining the Responsible Jewellery Council.

“Pandora is committed to promoting responsible practices—from the sourcing of precious metals and gemstones to the crafting and marketing of our jewelry,” said Mikkel Vendelin Olesen, CEO of what is now the world’s third largest jewelry brand. “We strongly believe in setting high common quality standards for the industry, and we look forward to actively working together with the Responsible Jewellery Council and its member organizations in order to encourage responsible practices throughout the jewelry industry.”

Added, Michael Rae, RJC’s CEO. “Pandora’s membership will strengthen RJC’s mission of responsible business practices amongst large and small industry players and will reach the youngest generations through their innovative approach.”

The Responsible Jewellery Council is an international not-for-profit organization with more than 250 member companies that promotes responsible ethical, human rights, social and environmental practices in a transparent and accountable manner throughout the jewelry industry from mine to retail. Their commitment aims to reinforce consumer and stakeholder confidence in diamond, gold and platinum group metals jewelry products.

Pandora Raises 2 Billion in IPO

Danish jeweler Pandora charmed investors with an IPO worth up to $2.1 billion in one of Europe's largest market listings this year, Reuters and other media outlets report.

Pandora shares, priced at 210 Danish crowns in the initial public offering, closed up at 263, giving investors a 25 percent gain and valuing the company at about $6.1 billion, Reuters reports. More than 4 billion crowns ($739 million) of Pandora stock changed hands on the Copenhagen stock exchange—nearly double the normal daily turnover for the whole bourse. The company priced its IPO at the high end of a preliminary range of 175-225 crowns.

Analysts reportedly said Pandora's high growth and strong margins made the share offer attractive to investors hungry for new stock after a period of scant IPO activity, despite its short track record and heavy reliance on a single product.

Pandora's mass-market jewelry, sold mainly in the United States and Europe, is priced in an approximate $50-$1,500 range. The company makes customizable silver and gold charm bracelets, rings, necklaces and earrings at its three factories in Thailand, where it employs 3,300 people out of its total workforce of 4,500, and sells them in 45 countries.

Its big seller is charm bracelets, made of silver or gold, with the charms of stones such as amethyst, onyx or moonstone. It made 86 percent of first-half sales from bracelets and charms.

Pandora, founded in 1982 by husband-and-wife team Per and Winnie Enevoldsen as a Copenhagen shop, has grown rapidly over the past decade, with revenue of about $640.4 million in 2009. Axcel, the Danish private equity group, bought a 60 percent stake in the company from the Enevoldsen family two years ago.

Pandora made 41 percent of its first-half sales in the United States, the company reportedly said.

Report Tracks ‘Dramatic Changes’ in the U.S. Jewelry Market

Pam Danziger

The U.S. jewelry market emerged from the recession to post a 7.5 percent increase in consumer expenditures from 2009 to 2010, after two successive years of negative growth. Yet the jewelry market today is very different than it was in 2006 and 2007 before the recession, according to a recently released report. 

Unity Marketing's Jewelry Report 2011 notes that jewelry makers and retailers who are expecting to pick up where they left off with the same products targeting the same consumers will find themselves in the lurch.

“Since 2006 Unity Marketing has tracked dramatic changes in the jewelry market related to consumers' product and shopping preferences,” said Pam Danziger, president of Unity Marketing.

For one thing, increased demand for men's jewelry accounts for much of the market's growth.

“Among the most profound shifts our research uncovered is the growing demand for men's jewelry,” Danziger said. “While the rising cost of materials accounts for some of the growth, increased demand for men's jewelry also contributed to the rise in the jewelry market from 2008 to 2010.” 

Jewelry marketers must innovate to find growth in the new economy, she added. “Jewelry marketers and retailers must take into account the many changes that their consumers have experienced coming out of the recession. Jewelry marketers have to be willing to challenge the old strategies and create new designs at new price points to be sold in new ways.”

An example of a company that took to innovation is Danish-based silver jewelry designer and manufacturer, Pandora. The company, known for its charm jewelry, posted worldwide growth of 92.6 percent to $1.2 billion in 2010.

Danziger explains each Pandora bracelet is a customizable piece that allows wearers to commemorate life events and interests with the addition of beads. With base bracelets in the $65 to $1,500 range and beads running from $40 to several hundred, this is a product that offers the opportunity for small splurges over time that will be meaningful to the owner.

“Rather than just selling another piece of jewelry, Pandora has transformed their product into an experience that its customers collect to commemorate milestone events and memories,” Danizger says. “Pandora is a game-changing competitor for traditional jewelry marketers. They sell a new type of jewelry item in new types of stores to a new value-conscious consumer eager to create a personal expression of their lives and memories.  Pandora has a built in repeat business that has a loyal following, since nobody can buy just one Pandora charm.”

The example of Pandora also speaks of dramatic change that continue through 2011. The company's spectacular rise since it went public in October 2010 was followed by an equally spectacular fall in August, when its stock fell 70 percent in a day, following a less-than-stellar second quarter report where the company’s outlook was drastically downgraded. The company blamed rising prices for silver and other jewelry making materials and poor execution.

Despite the company’s recent woes, its charms and other jewelry remain popular throughout the world.

Pandora Names Anders Colding Friis as CEO, Peder Tuborgh as Board Chair

Anders Colding Friis 

Danish jewelry company Pandora is going through another round of leadership changes as it plans to appoint a new CEO and board chairman in the coming months. 

The company said Thursday that it will name tobacco company executive Anders Colding Friis as its fifth CEO since the company went public in 2010. He will succeed current CEO Allan Leighton in March 2015. 

Allan Leighton

In addition, Pandora said it plans to make Peder Tuborgh chairman of its board of directors in October. He will replace Marcello Bottoli, who announced previously that he will step down due to other professional commitments. 

The Denmark-based company with manufacturing facilities in Thailand is known for its popular charm jewelry and other affordable jewelry pieces. It is also known for raising approximately $2.1 billion in its IPO in October 2010, for incredible sales growth during its first three quarters as a publicly traded company followed by a sudden approximate 65 percent decline in its stock price based on a company report that dramatically reduced its outlook. 

The company has experienced steady growth in sales and stock value since then but its top executive position continues to be in constant change. 

Peder Tuborgh

In this case it appears Leighton’s turn as CEO was planned as a temporary move. He was already chairman of the jewelry company when he replaced Bjørn Gulden as CEO in July 2013. Gulden accepted a position as CEO of athletic apparel company, Puma. Bottoli also served a stint as CEO during the company’s time of turmoil.

Friis, 51, is a Danish citizen and since 2006 has been the Group CEO of Scandinavian Tobacco Group, the world’s largest manufacturer of cigars and pipe tobacco. He also is chairman of Monberg & Thorsen, deputy chairman of IC Companys, board member of Topdanmark and Confederation of Danish Industry.

Marcello Bottoli

Leighton will step down from his role as CEO after reporting Pandora’s full year results for 2014. At the next annual general meeting, Leighton is expected to be named the company’s co-deputy chairman of the board.

Tuborgh, 51, is a Danish citizen who holds an MBA from Odense University and has held a series of management positions in Arla Foods, an international dairy company, before becoming group CEO in 2005. He is also deputy chairman of Aarhus University and board member of Royal Greenland.

“A managed succession at the top of the company, at a time when its performance and opportunities have never been stronger, has been a key objective for the board,” Bottoli said. “I am delighted with the result and to have been an active part of this.”

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes website

Danish Authorities Investigate Pandora’s IPO

One of the largest IPOs in 2010 is now being investigated by the Danish government.

The Danish Financial Supervisory Authority, the country’s market regulator, said Tuesday they will ask police to investigate Nordea Bank Denmark, a unit of Sweden's Nordea, for failing to report its financial interest in jewelry maker Pandora in an investment analysis prior to the  company’s float in October, Reuters reports.

The FSA said at the time of the analysis, Nordea’s indirect ownership in Pandora was 3.9 percent, the FSA reportedly said. Before the company was listed on the Copenhagen stock exchange, that stake was worth around 1.23 billion Danish crowns ($238.5 million).

“It is the FSA's evaluation that the general disclaimer does not sufficiently live up to the notice requirements regarding the announcement of significant financial interests,” the FSA reportedly said in a statement.

Nordea has reportedly admitted fault and said it will “adjust” its notification policy.

Nordea was one of the arrangers of Pandora’s IPO on the Copenhagen Stock Exchange in October, Reuters reports. That float raised $2.1 billion for the company, known for its popular charm jewelry. It was the fourth largest IPO in Europe in 2010.

The company, which designs its jewelry at its Copenhagen’s headquarters and makes them in cost-friendly Thailand, was flying high following the IPO with earnings reports touting spectacular growth until August 2, when the company released its second quarter report two weeks early with less than expected growth as well as declines in major markets. It drastically downgraded its sales and profits targets for 2011 from a revenue growth of no less than 30 percent to 0; and noted that sales fell 30 percent in July.

The profit warning caused the company’s stock to drop 70 percent in less than a day. Since its IPO, the company has reportedly lost 80 percent of its value.

Pandora Jewelry Q2 Revenue Up 53%

Pandora charm bracelet

Danish jewelry company, Pandora, continues its comeback that began to show promise earlier this year with a year-over-year 53 percent increase in revenue to 1.9 billion kroner ($343 million) for the second quarter of 2013. Net income rose 22 percent for the period to 431 million kroner ($76.5 million).

The company did note that comparable figures for the second quarter of 2012 were impacted by the company’s stock balancing campaign conducted in 2012, where it replaced unwanted products after demand collapsed two years ago.

The international company known for its charm jewelry and silver jewelry posted robust double-digit sales growth in all regions where it operates:

• Americas increased by 52.1 percent (54.3% increase in local currency)
• US increased 53.9 percent (55.6% increase in local currency)
• Europe increased by 59.3 percent (59.8% increase in local currency)
• Asia Pacific increased by 43.5 percent (42.4% increase in local currency)

Gross profit for the quarter increased 49 percent to 1.27 billion Danish kroner ($225 million). This corresponds to a gross margin of 66 percent, compared to 67.9 percent in the second quarter of 2012 and 65.6 percent in the first quarter of 2013. The company said the decrease in gross margin was primarily due to the expiration of the suspension of import duties on goods from Thailand (where the company manufactures its jewelry) into the U.S. “The increase in the gross margin compared to Q1 2013, was due to a decrease in commodity prices,” the company said.

EBITDA for the second quarter increased by 140.9 percent to 530 million Danish kroner ($94.1 million) resulting in an EBITDA margin of 27.4 percent, compared to 17.5 percent in the same period of the prior year. 

Pandora—which designs, manufacturers, markets and sells its jewelry wholesale and retail—said its volumes increased by 40 percent year-over-year and the average sales price increased nearly 9 percent.

On 30 July 2013, Pandora is sticking to an upgrade in its financial guidance, first announced July 30, to 8 billion kroner ($1.42 billion), compared with its previous guidance of 7.2 billion kroner and expects an EBITDA margin of approximately 27 percent, up two points from its previous guidance.

The company also plans to increase the number of its popular “concept stores” that it plans to open for the year, from 150 to 175.

“The solid performance reported for Q1 2013 has continued across all major markets in the second quarter, with strong sales from newly launched products, high replenishment rates and healthy sell-out from the concept stores,” said Allan Leighton, Pandora CEO. “Our strategy of delivering affordable luxury is becoming increasingly relevant, and although there are still many areas in which we can improve we are pleased with our progress.”

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Pandora’s Troubles Continue as Q2 Profit Falls 90% and Revenue Drops 9.5%

Pandora Group, home of the international silver jewelry brand that became famous for its charm jewelry, had another disappointing quarter.

The Danish company with manufacturing facilities in Thailand said that year-over-year sales for its Pandora branded jewelry fell by 9.5 percent to 1.26 billion Danish krone ($210.2 million) in the second quarter of 2012. Profit during the same period fell 89.9 percent to 63 million Danish krone ($10.5 million).

Pandora reported losses in every region it operates. The company noted that a stock rebalancing campaign launched in the first quarter is a major reason for the disappointing results, which the company said are in line with expectations. It said it received returns of discontinued products valued at 183 million krone ($30.5 million) and replaced it with 310 million Danish krone ($51.7 million) worth of new inventory.

Björn Gulden, Pandora CEO, said the company will continue with the stock rebalancing program and will cap it at 800 million krone ($133.5 million).

“The execution on the stock balancing campaign continued into Q2 2012 and was very well received by our retail partners across all our markets,” Gulden said. “Even though the stock balancing campaign, short-term, hurts our revenue, cost ratio and profitability in 2012, the campaign has proven to be the right action to help our retailers improve the quality of their stock.”

By region, revenue results are as follows:

* Americas decreased by 5.1 percent (14.6 percent decrease in local currency)

* Europe decreased by 16.6 percent (17.4 percent decrease in local currency)

* Asia Pacific decreased by 8.1 percent (14.1 percent decrease in local currency)

Branded revenue as percentage of total revenue increased to 75.3 percent in the second quarter of 2012, from 73.4 percent in Q2 2011; and gross margin was 67.9 percent in Q2 2012, compared to a gross margin of 74.4 percent in Q2 2011.

Pandora projects revenue for 2012 to be above 6 billion krone ($1 billion), down from 6.66 billion krone ($1.1 billion) in 2011.

“Feedback from our retailers on our Autumn/Winter 2012 collection has been very encouraging and with an additional 94 new Concept stores opened in H1 2012, we are on track to deliver on what we have promised the market in our financial guidance for the full year,” Gulden said.

Pandora also announced a number of organizational changes. Among them:

* Scott Burger, former COO of Pandora North America, was named president for Pandora North America, succeeding John White, who is taking up a position outside Pandora.

* Sten Daugaard, chief development officer, has been assigned to head Pandora's Asian headquarters in Hong Kong “in order to secure senior management attention to an important future region.”

* David Allen, former VP of Sales of Pandora Australia, has been named president of Pandora Australia with the responsibility for commercial operations in Australia, New Zealand and the Pacific, succeeding Karin Adcock, who retired as planned on July 1.

Please join me on the Jewelry News Network Facebook Page and on Twitter  @JewelryNewsNet. 

Pandora Q2 Sales Down in Key Markets, Downgrades Outlook, CEO Resigns, Company Blames Price Increases and Poor Execution

Has the bubble burst for Pandora? The Danish company known for its charm jewelry announced the sudden resignation of its CEO, Mikkel Vendelin Olesen, effective immediately due to lower-than-expected growth, which the company blames on commodity price increases and “inadequate” execution.

“Although our price increases combined with some destocking are significant contributors to our slowdown in sales and profitability, our own inadequate operational sales, and marketing execution is as big a factor,” said Allan Leighton, Pandora board chairman.

Marcello Bottoli was named the interim CEO as the company, which experienced spectacular growth in recent years and a $2 billion IPO in October, 2010, seeks a permanent replacement.

“The re-set of our affordable luxury positioning, improved operational execution and restoring growth trajectory is now the focus of our company,” Pandora said in the same statement. “This re-set will take up to 18 months to see through. In addition, the company has instigated a strategic review to test or confirm certain elements of the company strategy.”

The announcement came following the early release of a condensed second quarter earnings report Tuesday that contained negative growth rates in its biggest markets and a downgraded outlook. The financial report was scheduled to be released August 16. No reason was given for the early release and the full report will still be issued on the expected date.

The company changed its outlook from expecting a revenue growth of no less than 30 percent for 2011 and an EBITDA margin of minimum 40 percent to 0 revenues and EBITDA margins in the low thirties for the year.

After the release of the financial report, Pandora stock fell a spectacular 65 percent, according to news reports.

Pandora reported that revenue increased 3.6 percent to 1.4 billion Danish kroner ($265.3 million). In the Americas, revenue increased 16.2 percent. However, sales in the U.S., its largest market, fell by 0.7 percent. The U.S. accounted for 39.2 percent of all sales during the period for Pandora.

In Europe it was even worse as sales declined 11.9 percent. The U.K. and Germany, its two largest markets in Europe, fell 13.1 percent and 20.1 percent, respectively. The U.K. accounted for 11.9 percent of all sales, down from 14.2 percent in the second quarter of 2010. Germany accounted for 8.5 percent total group sales, down from 11.1 percent in the second quarter of 2010.

The Asia-Pacific region increased 7.6 percent for the period. However, in Australia (another large market for Pandora), revenue was down 14.6 percent.

The company implemented price increases in all markets during the first quarter except in Australia where it increased prices in April 2011. Price increases in Germany were implemented at the end of first quarter. “Our price increases introduced during H1 2011 have had a significant negative impact on our volumes in the quarter,” the company said.

Other financial highlights include:

• EBITDA decreased by 6.2 percent to 512 million kroner ($97 million) resulting in an EBITDA margin of 36.8 percent compared to an EBITDA margin of 40.7 percent for the second quarter of 2010.

• EBIT decreased by 8.3 percent to 440 million kroner ($84 million) resulting in an EBIT margin of 31.6 percent compared to a EBIT margin of 35.7 percent in Q2 2010

• Reported net profit increased by 56.1 percent to 626 million kroner ($119.3 million), compared to a net profit of DKK 401 million kroner ($76.4 million) in the second quarter of 2010. Adjusted for revaluation of the CWE earn-out provision based on revised outlook for PANDORA CWE, second quarter net profit decreased by 17.7 percent to 330 million kroner ($62.9 million).

Pandora Q1 Sales Up 41%

Danish charm jewelry company Pandora reported a 41 percent increase in sales to 1.74 billion Danish Krones ($333.8 million) in the first quarter. Net profit increased 90.7 percent to 515 million Danish krones ($98.8 million).

“We experienced strong underlying growth in Q1 and implemented price increases in most markets to balance the impact of rising gold and silver prices,” Mikkel Vendelin Olesen, Pandora CEO, said in a statement Thursday. “Our performance was based on a combination of good volume and product mix developments in existing and new stores across markets…. We remain focused on delivering very strong growth by increasing penetration in existing markets, upgrading existing stores as well as developing new markets.”

Pandora recently increased its prices and the reaction to the increase has been mixed, the company said, depending on timing of the price increase, the current consumer environment and the strength of the brand in that market.

Performance in Americas—including the U.S., Pandora’s largest market—and Asia were in line with first quarter performance, the company said, while some European markets were more moderate, particularly Germany, which they said called their results “unsatisfactory.” The company said its market position in Australia remains strong.

“Germany we see as an opportunity market, not a mature market,” the company said in its financial statement. “Our current performance is not satisfactory and we have taken steps managerially and in terms of trade and consumer interface to drive what we believe to be considerable long-term growth.”

Pandora said its outlook for 2011 remains unchanged, expecting a revenue increase of no less than 30 percent.

Pandora Jewelry Returns to Strong Profit And Growth

Pandora—whose short history as a publicly traded company was marked by spectacular growth followed by an even more spectacular fall—is back on track dramatically increasing its sales and profit for the first quarter of 2013.

The Danish company, known for its popular charm bracelets, said Tuesday that group revenue for the period increased 40 percent year-over-year to 2.002 billion Danish krones ($348.6 million). Profits increased 29.6 percent DKK 438 million ($76.3 million).

The international company—which manufactures, distributes, retails and markets its branded jewelry—reported extremely strong increases in all regions of the world where it operates. Its regional breakdown for the first quarter is as follows:

* Americas: Up 38 percent (38.6 percent in local currency);
* Europe: Up 50.4 percent (50.6 percent in local currency); and
* Asia Pacific: Up 26.1 percent (27.7 percent in local currency).

The company noted that as it expected, gross margin fell to 65.6 percent for the period, compared to a gross margin of 71.6 percent in the first quarter of 2012. The company did not give a reason for this expected drop. 

“Although it is still early in the year, we have had a strong start,” said Pandora CEO Bjørn Gulden, who will leave the company at the end of the month to join sports brand Puma. “Revenue and earnings increased across all regions, positively impacted by the delivery of the Valentine's Day collection in Q1 2013, instead of, as historically, in the fourth quarter. Even more importantly, our sales-out in ‘Concept’ stores (branded stores owned by the company) has also strengthened with double digit growth in our four major markets. Some of this increase is due to the fact that Easter was in Q1 this year compared to Q2 last year, but we believe most of it is due to better products, improved marketing and better execution in the stores.”

The company’s financial guidance was unchanged from the prior quarter. It expects revenue of to be above DKK 7.2 billion ($1.25 billion) and expects an EBITDA margin above 25 percent.

Other highlights of the first quarter 2013 report

* EBITDA increased by 60.3 percent to DKK 643 million ($112 million), corresponding to an EBITDA margin of 32.1 percent, compared to an EBITDA margin of 28.2 percent in the first quarter of 2012.
 
* Free cash flow was DKK 406 million ($70.6 million), compared to DKK 118 million ($20.5 million) in the first quarter of 2012.
 
* Pandora bought back 398,153 shares corresponding to DKK 61 million ($10.6 million) as part of the on-going DKK 700 million ($121.8 million) share buyback program.
 
* Pandora expects to open approximately 150 Concept stores in 2013.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

Pandora’s Flower-Inspired Spring Jewelry Collections

Jewelry from the Spring Pandora collection.

Danish designer jewelry company, Pandora, launched a collection of jewelry inspired by colors and flowers that will begin to appear in stores in May and be enhanced with new pieces through the early part of summer. Known for its signature charm bracelet, this jewelry launch also includes a rings, bracelets, earrings, necklaces and pendants.

“The vibrant colors and intricate details of flowers provide us with a color and inspiration palette designed by Mother Nature,” said Angel Ilagan, Chief Marketing Officer, Pandora North America.

The Copenhagen-based company’s first 2011 launch in the U.S. offers new charms for its Moments collection in a soft, romantic color palette that adds designs with precious metals, stones and gemstones. It includes birthstones and colored zirconia set in a bloom, as well as a range of new Murano glass beads and charms that represent personal symbols, such as a babushka doll and a four-leaf clover. Also new with this launch is a macrame bracelet ($105 - $235) to wear with, or without, a Pandora clip. Each bracelet takes approximately three hours to produce, making it the most time-intensive piece in the entire Pandora collection.

New rings have been added featuring muted floral details, hand-carved roses and small hearts. Rings come in sterling silver, 14k gold or two-tone and range in price from $35 to $995.

Smokey quartz and chalcedony make an appearance in the company’s Stories jewelry sets. The new launch also includes colorful cabochon bangle bracelets in sterling silver with a variety of gemstones. To meet these different occasions, pricing ranges from $45 to $845.

The Black Crown Diamond watch line offers Swiss-made craftsmanship at affordable prices. Women have more watch bands and bezels to select from in the Imagine and Double Oblong lines. Pandora has also added the Fleur line of watches featuring leather bands and a clean, circular face. Prices for interchangeable straps and bezels start at $30, and watches run from $175 to $1,350.

Pandora Names Allan Leighton as CEO

Allan Leighton

Pandora said Thursday that Allan Leighton, current chairman of the jewelry company, will succeed Bjørn Gulden as CEO on July 1.

Gulden is stepping down to join sports brand, Puma, as its new CEO. Pandora’s board of directors will recommend that Gulden remain part of the company as a board member.

Marcello Bottoli, who is currently deputy chairman, will succeed Leighton as board chairman.

Bjørn Gulden

“Pandora is a great business which is performing well, but the sports industry has always been a major part of my life, and my role at PUMA will also allow my family to remain in Germany,” Gulden, a former professional soccer player said in a statement.

Leighton added: “Bjørn, Marcello, the management team and I have worked very closely on delivering on the company strategy and the board believes that continuity in that execution and understanding of the business is key to our continued success.”

The Danish manufacturer, marketer, distributor and retailer of fine jewelry is still recovering from a very difficult 2011, which saw a sudden 70 percent drop in its stock price following a less than glowing second quarter report that year. Prior to that drop the company, which designs its popular charm bracelets and silver jewelry in Copenhagen and manufacturers them in Thailand, was the darling of jewelry retailers and the investment community as it experienced spectacular growth. The company’s IPO in 2010 raised $2.1 billion.

Gulden began at Pandora in March of 2012 and by November 2012 the company, working off a stock rebalancing program, returned to profitability in the third quarter reporting a revenue increase of 14.3 percent, year-over-year, and net profit increase of 11.4 percent. However, it wasn’t enough to save the year as revenue for 2012 was essentially flat while net profit fell 41 percent.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

Pandora Sales up Nearly 93%

Everyone’s favorite jewelry company, Pandora, reported a 92.6 percent sales increase to 6.67 billion Danish krones ($1.26 billion) for 2010. Net profit rose 86.2 percent to 1.87 billion Danish krones ($355.6 million) for the year.

By region, the Danish company that specializes in affordable charms reported stunningly strong sales growth. Its business in the Americas, its strongest market with 43.7 percent of total sales, grew by 87 percent. Europe, its second largest market with 43 percent of total sales, had the strongest growth for the year at 137 percent. Sales in the Asia Pacific grew by 28.3 percent and constituted 13.4 percent of total sales

Revenue from charms grew by 82.5 percent for the year and silver and gold charm bracelets revenue grew 50.3 percent. This past year the company was trying to strengthen sales in its rings and other jewelry and it has shown some good results. Ring sales grew by 281.8 percent and other jewelry grew by 185.2 percent. Together these two product groups represented 18.7 percent of revenue in 2010—up from 11.6 percent in 2009.

Gross margin was 70.9 percent, slightly below the gross margin of 71.4 percent in 2009, primarily due to increase in commodity prices not being entirely offset by price increases, the company said.

“2010 was a remarkable year in Pandora’s history, and I am both proud and very satisfied with the achievements we have accomplished together with our partners,” said Mikkel Vendelin Olesen, Pandora’s CEO. “While entering new markets that will contribute to our long-term development, we experienced strong growth in our existing markets and across all product categories. We increased branded sales and strengthened the awareness and perception of the Pandora brand among our target audience. And we successfully integrated new businesses into the group as well as new systems and procedures to prepare our organization for future growth. At the same time we listed the company on the stock exchange without losing momentum in our daily operations.”

For 2011, Pandora said it expects a revenue increase of no less than 25 percent.

At the end of 2010, PANDORA employed 4,985 people worldwide and sold its jewelry and other branded products through 10,618 points of sale in more than 55 countries on six continents.

High Flying Pandora Returns to Earth with No Growth in 2011 Revenue

A tumultuous year for Pandora came to an end after a 10-percent drop in revenue for the fourth quarter, leaving the jewelry manufacturer and designer with a 0.1 percent decrease in group revenue to 6.65 billion Danish kroner ($1.18 billion) in 2011.

This is a far cry from the spectacular results the company, known for its silver charm jewelry, reported from 2009 until the mid-year of 2011. The bottom dropped out for the fast-growing brand—a darling of investors, retailers and consumers—with a second-quarter report released in August where the company changed its outlook from expecting a revenue growth of no less than 30 percent for 2011 and an EBITDA margin of minimum 40 percent with flat revenue and EBITDA margins in the low thirties for the year. This report resulted in the immediate resignation of its CEO, Mikkel Vendelin Olesen, and a one-day 65 percent drop in the value of its stock.

The company also announced Tuesday that it has begun a campaign to buy back unsold stock from retailers for the first two quarters of the fiscal year that will negatively affect 2012 results. The company estimates that the campaign will cost 500 million to 800 million Danish kroner.

“The campaign will encourage Pandora retailers to exchange discontinued, merchandise for appropriately priced best-sellers, on a one-for-one basis,” the company said. “(It) will likely generate a corresponding negative impact, due to cannibalization of forward sales, on reported numbers across the whole of 2012.”

Among Pandora’s results for 2011:

* Sales in Americas increased 7.9 percent (12.4 percent in local currency);

* Sales in Europe fell 8.3 percent (down 7.7 percent in local currency);

* Sales in Asia Pacific decreased by 0.2 percent (down 4.3 percent in local currency);

* Gross margin increased to 73 percent in 2011 compared to 70.9 percent in 2010;

* EBITDA margin was 34.3 percent in 2011 compared to 40.3 percent in 2010;

*EBITDA decreased by 15 percent to 2.28 billion Danish kroner ($406,503 million);

* EBIT margin was 30.9 percent in 2011 compared to 36.2 percent in 2010;

 EBIT decreased by 14.8 percent to DKK 2.05 billion Danish kroner ($366,323 million);

* Reported net profit increased by 8.9 percent to DKK 2.03 billion ($362,684 million) in 2011. Adjusted for a revaluation of the CWE earn-out provision based on a revised outlook for PANDORA CWE, 2011 net profit decreased 18.4 percent to 1.52 billion Danish kroner ($247,228 million).

In its outlook, Pandora it expects 2012 revenue growth to be in mid-single digits; gross margin in the low 60s, driven by the impact of commodities prices and a reduction in our selling prices; and EBITDA margin in the mid 20s.