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Pandora has said it will start shifting parts of its supply chain, as the affordable jewellery maker moves to reassure investors worried that it could be one of the biggest losers from US President Donald Trump’s trade war.
The Danish maker of charms and bracelets produces the bulk of its products in Thailand, which was hit by a tariff of 37 per cent last month that has since been delayed. Its shares were among the worst hit following Trump’s “liberation day” tariff announcement last month.
Chief executive Alexander Lacik told the Financial Times Pandora was accelerating plans to send its products directly to Canada and Latin America, rather than as at present servicing both markets from Baltimore in the US.
He added that the company would find different suppliers for things such as marketing material that is currently produced in China, with the two actions together mitigating about a quarter of Pandora’s potential exposure to tariffs.
But he reiterated there was little Pandora could do about its manufacturing, 95 per cent of which is situated in Thailand.
“It would take at least three years, if not more [to build a new factory]. We could only put this factory where there is enough of a craft tradition as we have an average of 30 hands touching each piece of jewellery we make, and they need to be skilled. The idea of moving production to the US is a bit of a dream,” Lacik said.
Pandora had previously announced that tariffs could hurt it by up to DKr1.2bn ($183mn) but said this would now be about DKr900mn due to sending products directly to Canada and Latin America by early next year.
Should tariffs on Thailand remain at their current level of 10 per cent, the impact would be DKr250mn this year and DKr300mn afterwards.
Lacik said Pandora had seen “no impact on consumer demand yet from tariffs” and that it had not changed its pricing, apart from a small, already-planned increase in April. “Nobody knows what will happen 75 days from now,” he added.
Strong growth in the US drove an 8 per cent in revenues in the first quarter to DKr7.3bn while operating profit increased 9 per cent to DKr1.6bn. Shares in Pandora rose 4 per cent on Wednesday morning.
The jeweller would consider price increases should higher tariffs be introduced, Lacik said.
“This current level of tariffs is no major headache. The big topic is if it goes to 30, 40, 50 per cent. That changes the scenery. If [Trump] goes through with this, there’s going to be the biggest price increase we’ve seen in many, many years,” he stressed.
