CANBERRA: Australian women just can’t get enough charm bracelets, judging by the latest results from Danish jewellery retailer PANDORA. The Copenhagen-based retailer, known for its mix-and-match silver charms, has shown Australian retailers Lovisa and Michael Hill a clean pair of heels, lifting sales by 39.5 per cent to $240.6 million in 2015. PANDORA’s sales rose more than 40 per cent in the December and September quarters and the company – which does not disclose Australian earnings – has clocked up 10 consecutive quarters of same-store sales growth over 20 per cent.
In comparison, Michael Hill’s sales rose 9.7 per cent to $310.8 million in the December-half, while budget jewellery chain Lovisa has flagged a 13 per cent increase in December-half sales to $82.6 million, underpinned by same-store sales growth of 4.1 per cent.
PANDORA Australia and New Zealand president Brien Winther attributed the company’s growth to strong demand for charms, bracelets and rings, new products such as the Disney jewellery collection, and a stronger branded store network. “The results demonstrate that there is continued strong demand for PANDORA in Australia,” Mr Winther said. “Our retail teams have done an exceptional job of providing a world-class experience for our customers, which in turn drives revenue.”
PANDORA is currently in dispute with PANDORA Australia founder Karin Adcock, who has secured the local distribution rights to US jewellery brand Alex and Ani – also known for its charm bracelets – and started approaching retailers before Christmas.
According to industry journal Jeweller magazine, the company has told authorised stockists that PANDORA’s authorised retailer agreement prevents retailers from selling products that “could reasonably be regarded as competing products” without prior approval.
Ms Adcock, who started selling PANDORA charms from her home in 2004 and sold her stake in the company in 2009, has reportedly referred the matter to the competition watchdog.
Mr Winther expects the current rate of growth to slow, but still expects to deliver same-store sales growth of more than 10 per cent this year. Longer term, PANDORA expects same-store sales growth to normalise to about 3 to 5 per cent, according to the company’s annual report.
PANDORA, which is sold in 358 stores in Australia, plans to open between five and 10 concept stores each year for the next three years, boosting revenues by 30 per cent. While jewellery sales have been buoyant, industry margins have come under pressure from the weaker Australian dollar.
Budget retailer Lovisa, which is due to report half-year results on Thursday, warned last month that its cost of goods had risen 15 per cent year on year, but it had struggled to recoup higher costs through price rises because of the sheer volume of stock in its stores. Lovisa’s earnings before interest and tax for the six months ending December are expected to rise 3.4 per cent to $17.9 million, falling short of earlier forecasts above $19 million.
