January 16, 2018 / 11:22 AM / a year ago

Jeweller Pandora to double product launches to regain lost charm

COPENHAGEN, Jan 16 (Reuters) - Jewellery maker Pandora , known for its silver charm bracelets, plans to double new product launches by 2022 to rectify a recent lack of innovation and weak growth in key markets, its chief executive told investors on Tuesday.

Pandora shares were up 4.6 percent at 1055 GMT as it met investors to try to dispel concerns after weak U.S. trading and a failed Valentine’s Day collection hit its 2017 performance.

However, the stock remains below the Jan. 11 opening price from which it slumped more than 14 percent after the company missed its own sales forecasts and warned of thinner margins ahead.

“We’ve had a hiccup in products in 2017,” CEO Anders Colding Friis told investors at a capital markets event in Copenhagen.

“Our assortments have become too repetitive, so the consumers could not see a very big difference,” he said.

As a response, Pandora - the world’s largest jewellery manufacturer by production volume - will cut product development time to get new jewellery to market faster, he said.

By 2022, Pandora aims to launch 800 products, compared with 400 last year.

Friis added that higher production costs for more complicated jewellery in new materials would put pressure on profit margins. The company manufactures in Thailand.

Pandora last week said it would target a core profit (EBITDA) margin of 35 percent in 2018-2022, down from 39.1 percent in 2016.

While physical stores remain the main distribution channel, Pandora aims to lift online sales to between 10 and 15 percent of revenues by 2022 from 6 percent in 2017, Friis said. (Reporting by Stine Jacobsen; Editing by Jussi Rosendahl and Mark Potter)

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