Pandora has released its annual report, which reveals like-for-like sales in the UK slipped by 7% last year.
The UK is Pandora’s second largest market, contributing 13% of group revenue in 2019 with sales of DKK 2,861 million (£327m).
This was an increase of 2% measured in local currency compared with 2018. The growth was among others driven by store network expansion as like-for-like was negative.
The brand relaunch in August drove strong improvement in performance. Q4 became the strongest quarter of the year with -3% like-for-like, taking 2019 like-for-like to a 7% decline.
The Q4 performance was driven by strong double-digit online growth following a successful Black Friday trading period. Furthermore, the media investments focusing on self-expression and collectability strengthened the charms category, which performed materially better than in the three first quarters.
Total revenue for Pandora in 2019 was DKK 21,868 million compared with DKK 22,806 million in 2018. Like-for-like (sell-out of existing stores) was -8% in 2019 following improved performance in Q4 2019. Organic growth was -8%, reflecting the like-for-like development and positively impacted by store openings, but negatively impacted by inventory reduction among wholesale partners.
Revenue for 2019 included a positive contribution of 1% from acquisition of franchise concept stores and distributors (not included in organic growth).
The Q4 performance confirms that Programme NOW has been having a positive impact on the underlying business and the turnaround will continue throughout 2020.
Pandora has reviewed the network strategy and essentially confirms the direction previously communicated. The jewellery giant will continue to open stores in white-space areas while adopting a more rigorous and systematic approach to the store network.
Additionally, the business will step-change investments in the online channel while opportunistically considering use of additional online market-places.
In 2020, the turnaround initiatives will continue to create a much healthier foundation for long-term sustainable performance. Pandora expects the growth performance to improve from -8% like-for-like in 2019 to negative “mid single-digit” like-for-like in 2020.
The like-for-like development in 2020 is a result of further reduction of promotional discounting activity, expected weak underlying performance in China and an underlying performance improvement in the majority of the other markets.
President and chief executive officer of Pandora, Alexander Lacik, says: “With 2019 behind us, we have completed the first year of our 2-year turnaround. We have made significant changes in a very short time, and the results in Q4 give us confidence. Consumers are responding positively to our commercial initiatives. Like-for-like is improving, and we have built a healthier foundation for the business. In 2020, we will continue to invest significantly to drive the topline, strengthen our organisational capabilities and pursue further cost reductions to fund our growth initiatives. Our priority remains to do what is right for the company in the long-term.”