Tariffs tarnishing jeweller's shine

The Star

09-06-2025

PANDORA, the world's largest jewellery company, is based in Denmark and has nearly 500 stores in the United States, more than any of its other key markets.
But in some ways, its real home is Thai­land, where the company has been making its products for nearly four decades.
Like many global corporations, Pandora's continent-crossing supply chain has allowed it to sell its goods worldwide at a low cost.
That supply chain became a grave weak­ness in April when US President Donald Trump said he would impose 36% tariffs on goods entering the United States from Thailand, alongside steep tariffs on dozens of other countries.
After Trump unveiled his 'reciprocal tariffs', Pandora's shares were among the worst performing in Europe.
Later, Trump postponed those tariffs until early July, offering a reprieve.
But the threat looms, and Alexander Lacik (pic), CEO of Pandora, is not expec­ting the uncertainty that is paralysing ­businesses to end.
Unless tariffs return to previous levels, the next year will be turbulent, he said in an interview. For now, he added, there is little to do but wait to see how investors, customers and competitors react.
'With the information at hand today, I would be crazy to make big strategic ­deci­sions,' Lacik said.
Alongside business leaders all over the world, Lacik is grappling with how to res­pond to Trump's unpredictable policies, which have generated almost maddening uncertainty.
Lacik says he is not expecting the uncertainty paralysing businesses to end unless tariffs returned to previous levels. — Jenna Schoenefeld/The New York Times
The Trump administration has started to show a willingness to lower tariffs, but his first agreements, with Britain and China, have posed more questions than answers, and tariffs are still higher than they were a couple of months ago.
Although some aspects of the trade war have been suspended, Pandora and other multinationals are in limbo, waiting for more agreements to be finalised.
Pandora, best known for its silver charm bracelets, has been making jewellery in Thailand since 1989.
Across three factories, thousands of ­people handcraft the products.
The company is building a fourth plant in Vietnam, but Trump has also threate­n­ed tariffs on Vietnamese goods.
Last year, the company sold 113 million pieces of jewellery, about three items every second, making it the largest jewellery brand by volume, with stores in more than 100 countries.
A third of Pandora's sales, US$1.4bil, was generated in the United States and Lacik said he had no intention of moving away from the company's most profitable market. But prices will rise, he said, and who will bear the brunt of that is unclear.
'The big question is, am I going to pass on everything to the US consumer, or am I going to peanut butter it out and raise the whole Pandora pricing globally?' Lacik said.
Jewellery by Pandora being worn by a model at a promotional event in Los Angeles. — Jenna Schoenefeld/The New York Times
But Pandora keeps several months' worth of stock, giving him time to see how other jewellers change their pricing and then decide. A few things can be done immediately, such as streamlining parts of the supply chain.
The day after the reciprocal tariffs were announced, Pandora said that it would change its distribution so that products sold in Canada and Latin America would no longer move through the company's distribution hub in Baltimore, a process that would take six to nine months to ­complete.
Moving production into the United States is not being considered, in part because of higher labour costs.
Pandora employs nearly 15,000 craftspeople in Thailand and expects to hire 7,000 more in Vietnam.
In an earnings report last month, the company estimated the cost of the trade war.
If higher tariffs go back into effect, they would cost Pandora US$74mil this year, and then US$135mil annually after that.
But the jeweller is not panicking.
In fact, the economic curveballs are starting to feel normal, Lacik said.
'We are battle ready,' he added.
When he joined the company as the CEO in 2019, Pandora was struggling. Its share price had dropped more than 70% from its peak three years earlier.
Lacik instituted a 'complete overhaul', he said, with new branding and store designs, an emphasis on its 'affordable luxury' label and showcasing its complete jewellery line, not just charms.
That prepared the company for the ­trials that hit the global economy next.
First, the Covid-19 pandemic, when 15,000 store employees were sent home, and some factory workers slept on cots to keep production going.
Then, a surge in inflation risked custo­mers pulling back.
Lacik's strategy appeared to be working.
In January, Pandora's share price reached a record high.
Since then, however, it has dropped more than 20% as it shields itself from some of the trade turmoil. — ©2025 The New York Times Company
This article originally appeared in The New York Times