Pandora, the Danish jewelry giant, is considering a restructuring of its operations in China due to a significant decline in both online and offline sales. The company is in discussions with Chinese funds and e-commerce partners to potentially license its brand and assets, including inventory, for five years. Like many global consumer companies, Pandora has been affected by weakened consumer confidence post-pandemic, exacerbated by China's real estate crisis. Additionally, the company faces competition from local brands proficient in digital marketing, as consumer preferences shift towards gold and high-value jewelry.
Pandora acknowledges the need to reposition its brand in China and is working on a business transformation, although it has not confirmed specific restructuring plans. The company's revenue in China plummeted from 1.97 billion Danish kroner in 2019 to 416 million Danish kroner in 2024, with China's contribution to total revenue dropping from 11% to about 1%. Since 2022, Pandora has changed its China business head three times, with current General Manager Thomas Knudsen taking over in January. Shortly after, Pandora announced the closure of 50 stores in China this year.
Pandora's potential restructuring might face challenges in finding stakeholders or licensing partners, as financial investors may not be interested. However, e-commerce firms seeking high-margin brands could show interest. A similar deal occurred in 2022 when Gap sold its China operations to Baozun, a major Chinese e-commerce partner, for $40-50 million. The value of Pandora's potential deal remains unclear, but the brand's e-commerce sales have declined more sharply than physical stores.
