By Helen Reid and Isabelle Yr Carlsson
LONDON/COPENHAGEN (Reuters) -Jewellery maker Pandora has been gaining market share in the United States and plans to keep investing to win over new customers there, CEO Alexander Lacik told Reuters on Wednesday, despite the risk U.S. tariffs will dent consumer demand.
“U.S. consumer demand for the category is not super strong, but the demand for Pandora has been very strong,” Lacik said in an interview after Pandora announced results on Tuesday.
He said that could change, though, if steep U.S. tariffs on many countries return.
“If that happens and the demand generally goes down in the U.S., of course we’ll have to kind of rethink our plan a little bit. But at this moment in time, we’re punching away because it’s working,” Lacik said.
The U.S. accounted for 32% of Pandora’s revenue in the first quarter, and comparable sales there grew by 11%, making it the strongest major market for the brand.
U.S. so-called “reciprocal” tariffs, including a 37% tariff on Thailand, would add tens of millions of dollars to Pandora’s annual costs, as the company manufactures its charm bracelets and necklaces at two factories in Thailand.
Lacik said he welcomed any efforts to provide stability on trade, as the U.S. and China announced trade talks to take place in Geneva on Saturday.
After hiking prices by an average of 5% in October and a further 4% in April to account for higher silver prices, Lacik said Pandora has not yet decided on further price increases.
“It could be that we move the pricing globally, it could be that we move a bit more in the U.S., today I don’t know,” he said, adding that Pandora will stick to its “affordable” position relative to rivals.
Pandora still aims to open a new factory in Vietnam next year, Lacik said. High labour costs and a lack of specialised craftspeople make manufacturing in the U.S. impossible while maintaining profitability, he said.
“Even if you have these very high tariffs in the U.S. I still probably wouldn’t change my supply strategy.”
(Reporting by Helen Reid in London and Isabelle Yr Carlsson in CopenhagenEditing by Tomasz Janowski)
