**London**: Danish jewellery maker Pandora plans supply chain changes to reduce exposure to US tariffs on Thai goods amid ongoing trade uncertainties, including direct shipments to Canada and Latin America, while exploring new suppliers and managing cost impacts.
Pandora, the Danish jewellery manufacturer renowned for its charms and bracelets, has announced plans to adjust its supply chain amid uncertainties stemming from US President Donald Trump’s trade policies. The move aims to allay concerns among investors regarding potential tariff implications that could significantly impact the company.
The adjustments follow the imposition of a 37 per cent tariff on goods from Thailand, where Pandora produces the majority of its jewellery. Although the implementation of this tariff has since been postponed, the initial announcement contributed to a decline in Pandora’s stock prices, marking it as one of the harder-hit companies during this period.
In an interview with the Financial Times, Chief Executive Officer Alexander Lacik detailed the company’s strategy to alleviate tariff exposure. Pandora plans to expedite the direct shipment of products to Canada and Latin America, moving away from its current practice of routing shipments through Baltimore, Maryland. This strategy is expected to reduce approximately a quarter of Pandora’s expected tariff exposure.
Lacik further mentioned that the company is exploring alternative suppliers for marketing materials sourced from China as part of a comprehensive response to the changing trade landscape. However, he acknowledged the challenges surrounding the company’s manufacturing operations, with about 95 per cent of production still based in Thailand. “It would take at least three years, if not more, to build a new factory,” Lacik noted. He emphasised the necessity of a skilled workforce, as the average piece of jewellery requires the expertise of 30 artisans during its creation. “The idea of moving production to the US is a bit of a dream,” he added.
Initially, Pandora had forecasted that tariffs could result in a financial hit of up to DKr1.2bn (approximately $183 million). However, this figure has now been revised down to around DKr900mn due to the forthcoming direct shipments to Canada and Latin America planned for early next year. If the tariffs on Thai goods remain at 10 per cent, the adverse impact is projected to be DKr250mn this year, climbing to DKr300mn in subsequent years.
Despite these challenges, Lacik indicated that Pandora has yet to observe any significant decline in consumer demand related to the tariffs. The company has not altered its pricing, apart from a previously planned increase in April. “Nobody knows what will happen 75 days from now,” Lacik said, highlighting the unpredictability of the evolving trade situation.
For the first quarter of the year, Pandora reported robust growth, with revenues rising by 8 per cent to DKr7.3bn, alongside a 9 per cent increase in operating profit to DKr1.6bn. Following these announcements, Pandora’s shares saw a rise of 4 per cent on Wednesday morning.
While the current tariff levels are manageable, Lacik stated that the company would reassess its pricing strategy should tariffs escalate further. He emphasised that a significant increase in tariffs—potentially reaching 30, 40, or even 50 per cent—would drastically alter the competitive landscape, suggesting such changes could lead to substantial price hikes in the jewellery market.
Source: Noah Wire Services
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