Jeweller Pandora plans cost cuts, sales seen falling
today Feb 5, 2019
Jewellery maker Pandora, struggling to regain its competitive edge in a weak retail market, plans to make cost savings of 1.2 billion crowns as it faces a drop in organic revenue growth of between 3 and 7 percent this year.
The Danish charm-bracelet maker, currently looking for a new chief executive, has been challenged by a fall in the number of shoppers visiting malls in its key markets, while new jewellery lines have failed to entice shoppers.
"We are confident that this company-wide business transformation will reignite Pandora, restore sustainable growth and support our industry-leading margins," said chief operating officer and former Body Shop CEO Jeremy Schwartz on Tuesday.
The firm has been without a chief executive since ousting Anders Colding Friis following a first profit warning in August last year. Schwartz and newly appointed chief financial officer Anders Boyer are running the business for now.
Sales this year would be negatively impacted by a decision to reduce promotional activities, the company said.
Pandora's 2019 EBIT margin is seen at 26-28 percent, excluding restructuring costs of up to 1.5 billion crowns.
Fourth-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) fell almost 8 percent from the same period the previous year to 2.8 billion Danish crowns, but were above the 2.5 billion expected by analysts in a Reuters poll.
The firm also proposed to buy back 2.2 billion crowns worth of shares in 2019 and said dividends would remain at the same level as in 2018.
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