Pandora to Take Over 78 Store Leases in Germany
January 05, 15
(IDEX Online News) – Jewelry company Pandora is set to take over the leases of 78 stores in Germany. The firm said its “reset strategy” for the company has been to focus on creating “the optimum refreshed network through expansion of concept stores in quality locations.”
The stores currently operate under the ladies fashion brand BiBa.
“We have carefully mapped the German market, in terms of how an ideal concept store network would look in the country. With this agreement, we have now in one strategic move gained immediate access to a very large proportion of the desired locations,” said Pandora CEO Allan Leighton.
Currently, Pandora owns and operates 61 concept stores in Germany out of a total of 83 concept stores in the country.
The company’s president for Central Western Europe, Niels Møller, said the move will be a significant step for the brand and that all the leaseholds are for stand-alone stores located at prime locations throughout the country. “Pandora will in the coming year open owned and operated (O&O) concept stores in the new locations, some of which will be a relocation of already existing Pandora-owned stores. A number of these stores over time may move back to franchise stores, as Pandora’s operations in Germany strengthens,” he added.
The total investment for the new O&O stores, including the establishment and relocation of stores (including initial stock in the stores), costs related to temporarily inactive stores in the transition period, service fees to DHG as well as all other costs related, is expected to be around €50 million ($59.73 million).
The deal with DHG Gmbh is expected to be finalized by January 31. Pandora will pay a service fee to the company at its conclusion depending on how many leases it acquires.
Germany is one of Pandora’s core markets and generated revenue of approximately €50 million ($59.73 million) in the first nine months of 2014, an increase of 8.1 percent compared to the same period in 2013.
The German jewelry market is one of the largest in Europe and in 2013 was valued at €3.9 billion ($4.66 billion).