Jeweller - December 2020

Chains through the decade | STATE OF THE INDUSTRY
ZOOMING IN
PANDORA: PAST THE PEAK?
While the accompanying fine jewellery chain store
analysis does not include Pandora, its store count
has been included in the 2020 Chain Store table.
The company and brand was defined as a ‘brandonly’
chain in the 2010 State of the Industry Report
(SOIR) – rather than a fine jewellery chain.
The distinction is important because Pandora was,
and remains, both a supplier to the wider jewellery
market and a prominent retailer of its own brand.
For this reason, the 2010 SOIR listed Pandora as
a ‘brand-only’ operator, which was defined as
“one, or more, fine or fashion jewellery stores that
sells and markets its own brand of jewellery and/
or watches.
It is usually a vertical-market operation, does not
utilise local suppliers, and stores are often owned
and operated by the proprietor of the brand or
under license via franchise agreements.”
Since 2010 the Pandora ‘Concept’ (brand-only)
stores – many of which are operated by franchisees
– have increased from 41 to 124. However, a
number of the stores have closed in recent times.
Pandora Australia refused to divulge the figure,
but it is rumoured to be approximately five.
Traditional jewellers once frowned upon Pandora
jewellery as a cheap fashion product; however the
line between fashion and fine jewellery is often
subjective and it was blurred when Pandora’s
designs began using gold and diamonds.
Further, the dismissive ‘fashion’ tag flew in the
face of Pandora’s successful distribution model,
and which best demonstrates the evolution of the
brand and the industry. That is, by around 2010
Pandora was sold by more than 700 independent
jewellery stockists.
Following a six-year run of meteoric growth, the
company began closing accounts in Australia and
New Zealand; during 2011 alone, more than 100
stockists had their accounts closed as Pandora
entered a “new business phase in Australasia”.
The news struck the industry hard, but more was
to come.
In 2012, Pandora Australia announced a further
100 stockists would be closed while at the same
time pushing its own franchise model.
Pandora was, and remains, both
a supplier to the wider jewellery
market and a prominent retailer
of its own brand.
The table below shows that from a peak of more
than 700 Australian independent stockists, the
brand was supported by only 124 stores in June
2020. In other words, Pandora maintains only 18
per cent of its independent consumer distribution
points as it did at its peak.
Adding the Pandora franchise stores, that figure
reaches around 35 per cent.
In fairness, much of the decline has been at
the company’s choice; however, the way it has
managed itself over recent years caused many
jewellers to quit the brand – with some making
the decision for Pandora.
Reasons for no longer stocking Pandora have
included what many saw as excessive and unfair
trading terms and conditions, along with being
treated as ‘second-class citizens’ compared to
the franchise operators.
For example, the increased number of forced
deliveries per year gave retailers little choice in
their own stock levels. Combined with minimum
quantities on each item (i.e. pack sizes of three-ofkind),
independent stockists were prevented from
matching stock purchases with sales, resulting in
ever-increasing stock levels.
The over-stocking problem increased to such
an extent that, in August 2019, the company took
the extraordinary step of buying back jewellery
from stockists for smelting. However, even
the buy-back program was saddled with strict
conditions, including that retailers would be
charged a handling fee.
The retailers’ decision to stop stocking Pandora
may have been well-founded, given that over the
past three to four years, Pandora sales have
been declining – to the extent that in 2019, the
company announced an international ‘re-launch’
of the brand.
Less than two years after announcing that it
would focus on its company-owned and franchise
stores, thereby closing thousands more wholesale
accounts from its independent jewellery retailers,
Pandora Jewelry CEO Alexander Lacik declared
in February this year that that may have been a
poor decision.
Lacik, who joined Pandora in April 2019 from
outside the jewellery industry, believes the
company might have lost “a lot of new customers”
and may need to refocus on distribution to
independent jewellery stores – the very
businesses that it once discarded.
2020 Points of Sale NSW VIC QLD WA SA TAS ACT NT Total
Pandora Concept Store 39 29 26 17 6 2 3 1 123
Pandora
Pandora
Pandora Stockist 45 33 31 4 7 1 0 3 124
TOTAL POINTS OF SALE 84 62 57 21 13 3 3 4 247
No. of stockists 2010 700
No. of stockists 2020 124
Decline 576
Points Stockists of Sale 10 v 2020
Percentage decline 82%
No. of stockists 2010 700
Points of Sale in 2020 247
Decline 453
Points of Sale 2020
Percentage decline 65%
800
Stores & Stockists
Stores & Stockists
50
40
30
20
10
NSW VIC QLD WA SA TAS ACT NT
ABOVE Table and 0 chart compares the number of Pandora Concept (brand-only) stores
and Pandora independent stockists by state. Pandora has an additional 18 Concept Stores in
New Zealand. Australia and New Zealand are grouped within the Pandora Pacific division.
NSW VIC QLD WA SA TAS ACT NT
Number of Stockists
600
400
200
0
Number of Stockists
2010 2020 2010 2020
ABOVE Shows how the number of Pandora stockists has reduced since
2010 compared to the increase in Pandora Concept (brand-only) stores,
noting that the number of independent stockists has declined by 82%
December 2020 | 43