Jewellery giant Pandora is among many businesses being impacted by the coronavirus.
The brand says its business in China has ground to a halt as the new flu-like virus, which has now killed over a thousand people in mainland China, has forced the company to shut around a third of its stores in one of its top markets.
Reuters says the warning is one of the starkest yet from a business operating in China.
China is the world’s biggest luxury goods market and Pandora makes about 10% of annual sales from Hong Kong, China and its tourists.
“As I sit here and watch the Chinese business, it is in a standstill mode, I mean there’s pennies being sold,” Pandora’s chief executive officer, Alexander Lacik, tells Reuters, as he describes an “unprecedented” drop in business.
To date, Pandora has closed 70 of its 240 shops in China on the order of the government and at its remaining ones, mostly in shopping malls, customer traffic is “next to none”, according to the brand’s boss.
The crisis is set to threaten the firm’s efforts to revive its fortunes.
In its annual report Pandora projected that organic sales – excluding acquisitions – will fall by between 3% and 6% this year, an improvement from last year’s drop of 8%. It also expects to see an operating profit margin, excluding restructuring costs, of above 23%, versus 26.8% in 2019.
However, these forecasts do not account for any impact from the coronavirus in China.