Will retailers rally to support troubled Pandora?

Pandora CEO’s failure to deliver the goods may cost the brand dear.

Pandora may be about to discover that the enemies you make on the way up will be quick to stick the boot in when you are on the way down. Friends can be fickle too.

In December, 2010, an online forum was established that attempted to stir a balanced debate about the way Pandora worked with its network of retailers. The forum’s opening statement was magnanimous: “Pandora has been possibly the best thing to happen to our businesses. We could all agree that the Pandora product has become very important to us.”

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However, it went on to point out that, because of Pandora’s success, its partners are treated “without courtesy or respect”. Specific grievances from the forum’s creator were listed as:

• Forcing stock which the store owner does neither want to carry or require.
• Introducing new brands and making them compulsory.
• Charging us in the UK 35 percent more than other countries i.e. USA and Denmark.
• Failing to have sufficient stock of the lines we do require.

News of the forum, which was kept private at the time, spread like wildfire among the jewellery trade. Within days, vitriolic comments from the site filled 19 A4 pages.

Eventually, even UK’s managing director, Peter Andersen, was drawn into the debate, and wrote an open letter to the forum. He conceded that the company had been caught out by the speed of its growth, but hit back with: “I will also state that many of issues [sic] are fabricated, untrue or at least oversaturated.”

Pandora in the UK has been a victim of its own success, and most retailers would have remained patient as it dealt with supply issues.

However, it has been strong arm tactics, such as retailers being asked to buy expensive Pandora-branded shop-in-shop furniture bundled with hard to sell jewellery lines that will count as its biggest mistake in this country.

Plus, this was being done at a time when the company was creating a chain of Pandora shops up and down the country. Independent jewellers that had created the Pandora phenomenon felt they were being given the brush off.

Today’s financial news from Pandora is a story for the business pages of newspapers, and specialist trade titles, and is unlikely to dramatically effect consumer demand for the company’s jewellery. The quality of Pandora’s designs, manufacturing and marketing will be more significant.

But jewellers investing in stock for the crucial Christmas period will now feel they have a much stronger hand to play as they negotiate allocations from Pandora. If they don’t feel they are being treated a good deal better than they were in the run up to Christmas 2010, they have been given many reasons to take their business elsewhere.

Let us know how you feel about Pandora today. Post your comments below.

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