It’s been just over a year since Brien Winther flew over from Australia to become Pandora UK’s managing director, and already the market has seen a shift in the way the brand does business.
With a background in retail, Winther has been on a mission to transform Pandora’s UK boutiques by first and foremost empowering store managers to take ownership of their branches, and provide a customer experience tailor-made for their clientele.
It’s certainly not been an easy ride for Winther though, who landed in the UK in the middle of Brexit, which has thrown challenges at even the strongest retail players on the high street.
In an exclusive interview with Professional Jeweller editor Stacey Hailes, the managing director admits it’s been a “challenging” 12 months from a revenue perspective, but annual accounts show the jewellery giant still posted 8% growth for 2017 in the UK, something which has been attributed to online orders and concept store acquisitions.
During Winther’s first year at the helm, Pandora increased the number of its owned and operated stores quite considerably in the UK. The brand took back 14 boutiques from franchise partners in October alone, and has revealed it will add another six previously owned stores to its network this month.
Here, Winther shares his plans for the year ahead, which include an Oxford Street expansion, experimenting with railway retail and boosting the online presence.
How would you rate your first 12 months leading Pandora in the UK?
Well I love the UK and I love London. That part of the experience has been fantastic, the team has been fantastic. Obviously it has been a challenging year from a performance and a retail point of view as there were a lot of things going on in the UK, but the job itself has been fantastic. I am very pleased with how that’s gone. I would just have liked a few more sales. It was a challenging year from a revenue point of view, but there were lots of winds along the way which have been good, and we’ve put lots of things in place which will help us going forward. So from a personal point of view I have really enjoyed it, but from a work perspective it’s probably been a six or seven out of ten.
When you accepted the role here, did you expect it to be a difficult year?
I think Pandora, not just in the UK, expected last year to be difficult and challenging. We’ve had so many years of incredible profit, that sooner or later it had to slow down, and we sort of saw it coming at the back end of 2016, and then in 2017, whilst we just missed our guidance the major markets are struggling with growth. So I sort of expected it. The UK particularly threw some challenges at us that we weren’t expecting. You know Brexit, I don’t think it really affected us until the general election. I think people were going on thinking it would be ok, Theresa May’s got this under control, we are all good — and then you had the general election, and for six or eight weeks after that we could see consumers had lost confidence because they thought, ‘What’s going to happen now?’ So it was tough, and challenging, and we’ve got lots to work on.
How have you grown and evolved the UK business?
We’ve grown the number of own and operated stores quite considerably. Pandora is increasing its owned and operated business around the world and we started that last year. We’ve seen our O&O stores grow — we took over 14 stores in October last year, and we will add another three to our network this month, and take over another six in March. That’s quite a considerable shift in the number of stores as a percentage that have become our own. We are still dominant and have a very strong franchise business but we’ve got more O&O’s. So I think that’s been a real achievement for us, to actually put us on a path with the global strategy to be more O&O, and that’s been a real plus for us. Also the focus on our stores and retail. I think if you walked through here 12 months ago and asked people about the stores you wouldn’t have got much of a response, but now you would, and now you get a feel of this as a retail organisation and people understand the importance of stores and store managers, and what we can do to help them. That has been a significant change and we have obviously bought a few people into the business who have helped that. The management team talk about retailing a lot more. We talk about our stores and our store managers, so putting us on a path to become more of a retailer has been a big change. We’ve also just doubled the size of our Oxford Circus store by taking over the unit next door. So that is going to be a massive store for us. We will refit that probably in April, but I think that will be the biggest Pandora store in EMEA. It will be a true flagship store in London in the busiest part of the city.
The bottom line for me is if you make sure you look after your store teams, they will look after your customer.”
What are you doing to position Pandora to withstand hardships?
I think whilst it was tough, we launched Disney last year in EMEA and it’s been amazing, and quite often when you have a difficult year you forget about some of the real winds you’ve had in the business, and Disney has been fantastic for our business. It’s out performed all of our forecasts by quite a lot, so that’s been great. Pandora Rose has been really good for us in the UK. We still sell it better than any other market in the world, and that’s continued to be really strong. Our necklaces and pendants last year were excellent, and earrings as well. So we have certainly broadened the category of products that we sell, so necklaces, pendants and earrings have become a much stronger part of our business – not quite where we want it to be – but those three or four little things that we have done have been really successful. Our online business also continues to be very strong.
What would you say is the secret to surviving difficult high street conditions?
I think probably no different to what anybody else who has been in retail a long time would say — you have to look after your customers and you have to look after your store teams. One of the things we have just done in our own operated stores is we have done a back room audit to make sure all the facilities we provide our staff are up to scratch and that it is a welcoming environment. So you’ve got to look after your store teams and make sure they look after their customers, but they will if you provide a great working environment. So looking after staff is at the top of the list. We have talked about how do we offer industry leading wages to our store managers? How do we offer industry-leading bonuses to our store teams? Should we be paying our store teams working on a Saturday and Sunday more money to make sure we get the best people? And how do we become more flexible across our workforce because unless you’ve got the best people you can’t give great service. So yeah, staff retention and making sure you are at the forefront of looking after people. The bottom line for me is if you look after your store teams, they will look after your customer. Also, we got our pricing architecture a little bit out of whack last year at the start of the year and we missed out on some entry price point product, so I think it is really important you get your pricing architecture right across the board. It’s not to say we won’t sell high priced products, because we can sell those very well, but it’s making sure you get a balance. And we need to make sure we look after those who come for multiple charms but still want to buy Pandora at £25.
What’s the biggest challenge Pandora faces in the UK?
We still have an amazing footfall coming through our stores, it is incredibly high, and the opportunity for us exists in being able to convert more of those people and to show those existing customers we’ve got a broader range of product, and also to try and attract some new customers. Obviously we want to broaden the product assortment. We’ve got our new product coming out [Pandora Shine – a gold-plated range of jewellery], and that will bring a new customer to us. To get a new customer coming into our stores, who can then experience the full Pandora range of product, opens up other revenues for us. So I think that is incredibly important, to keep attracting new customers, not just through new products, but through new ways of marketing. We have done a lot more marketing around the digital space to try and get to people who don’t necessarily shop with us. You know our brand awareness is really high, it is off the charts, but you still have a lot of people who don’t buy with us, or shop with us, because they don’t like Pandora, so we’ve got to show them we’ve got more than charms and bracelets. But the number one challenge is to make sure you’ve got the best people in your stores and then converting more of our customers who come in who at the moment don’t buy from us.
How much of the market share does Pandora have now?
I have no idea. It would be impossible for me to say whether we gained or lost market share. I would be surprised if we lost any market share. When you look at the general market around the high street and retail and what was the general trend, we weren’t that far off the general trend. I know our brand awareness is still really strong.
What areas have you pinpointed for growth for 2018?
If you are talking about products, we still see rose as a growth category, necklaces and pendants as a growth category, and obviously the new product will come through. And continuing to grow Disney. When you’ve got Disney as a percentage of your business, and you’ve got Rose as a percentage of your business, and this new product as a percentage of your business, it starts to spread the load of the products you are selling in your stores, which helps. So I think they are areas of growth. The work that our digital team are doing on getting to customers and talking to customers better is really helping, so I think that is another area of growth for us.
Are you looking to expand your retail footprint any further?
We are probably are. We are looking at some sites for additional stores but not a lot, there’s probably four or five locations we would like to look at —particularly in London. We are opening a store at London Bridge at the new railway station and that’s going to be a real experiment for us because it is quite a small store, and it’s obviously going to be a really strong gifting area, and a really strong fast service. People who shop on their way somewhere else. That’s going to be a really interesting experience for us, just seeing how that works, because obviously there is a lot of retail space in railway stations in London with hundreds of thousands of commuters coming through all the time. So if we can make it work, and a lot of retailers do make it work, that will open up other opportunities for us. But other than that, not a lot of other new retail stores, but like I said we’ve got a number of franchise stores that we are bringing back as O&O over the next couple of months.
Our brand awareness is really high, it is off the charts, but you still have a lot of people who don’t shop with us because they don’t like Pandora, so we’ve got to show them we’ve got more than charms and bracelets.”
How have you been evolving the Pandora experience over the last 12 months?
One of the things that we did last year was we actually stopped doing some things to help the experience. We stopped enforcing the ‘Pandora Way of Selling’, which has been institutionalised, and we said to the store managers — you give the experience that you are comfortable with; so we empowered our store managers. We said, whatever experience you think your customer wants in store, give it to them. So we took away the control, the ‘you must do this step then this step, followed by this one’, and said develop your own niche consumer experience. In the first instance store managers go, ‘What does that mean?’ So we said, ‘What would you like your customers to feel?’ And they tell you. And then you go, ‘just do that’. And I think one of the things that a lot of retailers do is they try and pose their way of selling, or their selling process, and it takes away the individuality of store managers and store teams to develop what they think is right for their customer. And as long as they’ve got the customer at heart, they will give the consumer a good experience. They don’t need steps to follow. So how do you give consumers a good experience? You empower store managers to give the experience they want to give.
What about the online customer experience, how have you been improved this?
I think the first thing is you’ve got to make sure the experience online is the same as in store because some people shop online but buy in store. So you’ve got to make sure the experience is duplicated. So we – the bottom line team, our store’s merchandising team, and our marketing teams – spent a lot of time, certainly in the last 12 months, talking about the combined offer – not online or stores – but together. And as long as you keep those groups together talking about it, then you will get a consistent experience.
How will you be strengthening your voice in the UK market?
I think certainly Pandora’s 2022 strategy talks about digitalisation of the brand experience. You have to use digital to strengthen your voice because you can’t go through traditional methods. It doesn’t work, it’s too fragmented. So we did some stuff last year around the Disney launch, it was phenomenal, the work that went into that to create the digital content and the results of that was phenomenal in terms of views and shares and likes and we’ve got to do more of that. We’ve got to create content that people want to share. Your customers and the people that love your brand have to help you have the voice of your brand. What you’ve got to do is give them the content to do that. So you will see more digitally created content that can be shared by our fans. There is no point producing another television ad because it doesn’t work, and print is diminishing, but our homes our digitally strong. But at the end of the day you need content.