Latest news with #Lacik
The Star
13 hours ago
- Business
- The Star
Tariffs tarnishing jeweller's shine
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
New York Times
13-05-2025
- Business
- New York Times
How the World's Largest Jeweler Is Surviving the Trade War
Pandora, the world's largest jewelry 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. But last month, that supply chain became a grave weakness when President Trump said he would impose 36 percent tariffs on goods entering the United States from Thailand, alongside steep tariffs on dozens of other countries. After Mr. Trump unveiled his 'reciprocal tariffs,' Pandora's shares were among the worst performing in Europe. A week later, Mr. Trump postponed those tariffs until early July, offering a reprieve. But the threat looms, and Alexander Lacik, the chief executive of Pandora, is not expecting the uncertainty that is paralyzing 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,' Mr. Lacik said. Alongside business leaders all over the world, Mr. Lacik is grappling with how to respond to Mr. Trump's unpredictable policies, which have generated almost maddening uncertainty. 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 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 finalized. Pandora, best known for its silver charm bracelets, has been making jewelry in Thailand since 1989. Across three factories, thousands of people hand craft the products. The company is building a fourth plant in Vietnam, but Mr. Trump has threatened tariffs of 46 percent on Vietnamese goods. Last year, the company sold 113 million pieces of jewelry, about three items every second, making it the largest jewelry brand by volume, with stores in more than 100 countries. A third of its sales, 9.7 billion Danish kroner, or $1.4 billion, were generated in the United States, and Mr. 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 U.S. consumer, or am I going to peanut butter it out and raise the whole Pandora pricing globally?' Mr. Lacik said. But Pandora keeps several months' worth of stock, giving him time to see how other jewelers 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 labor costs. Pandora employs nearly 15,000 craftspeople in Thailand and expects to hire 7,000 more in Vietnam. In an earnings report last week, the company estimated the cost of the trade war. If higher tariffs on Thai imports, 36 percent, and Chinese imports, 145 percent, go back into effect, they would cost Pandora 500 million Danish kroner, or $74 million, this year, and then 900 million Danish kroner, $135 million, annually after that. But the jeweler is not panicking. In fact, the economic curveballs are starting to feel normal, Mr. Lacik said. 'We are battle ready,' he added. When he joined the company as the chief executive in 2019, Pandora was struggling. Its share price had dropped more than 70 percent from its peak three years earlier. Mr. Lacik instituted a 'complete overhaul,' he said, with new branding and store designs, an emphasis on its 'affordable luxury' label and showcasing its complete jewelry 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. Mr. 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 percent. The company has managed to shield itself from some of the trade turmoil. After Mr. Trump raised tariffs on China during his first term, Pandora stopped sourcing all of its showroom furniture and display materials for its 3,000 stores from China. 'We had some readiness,' Mr. Lacik said, so they were not 'caught completely with our pants down.'
Yahoo
08-05-2025
- Business
- Yahoo
Tariffs Will Drive Up Prices for All Contemporary Jewelers, Says Pandora CEO
LONDON — Attention, American shoppers — it's time to stock up on charms, pearls, chains and bangles because if U.S. import tariffs rise this summer, mid-price jewelry is going to get more expensive. 'The reality is, I don't see a scenario where, if there is a 40 percent tariff imposed, people would not raise their prices,' said Pandora's president and chief executive officer Alexander Lacik in an interview following the first-quarter results. More from WWD 'Some companies would go bankrupt if they did not raise prices. I think everybody is going to move [on prices] ultimately, and there will be a major, major hike for the U.S. customer,' he added. With a third of its sales in the U.S. and its manufacturing base in Thailand, Pandora is in the eye of the storm — as are so many other contemporary jewelry companies that manufacture in Asia and sell in the U.S. 'India, Vietnam, Thailand and China are all places where jewelers like us, in the mid-price segment, source pretty much all of their jewelry,' he said. He believes that tariffs will impact the U.S. consumer more than the jewelry companies themselves. 'If we imagine a situation where [U.S. President Donald Trump] is going to go through with these high tariffs, then the whole sea level rises. You could argue that the relative position between the jewelry brands will be maintained,' he said. Pandora CEO Alexander Lacik In its latest results statement on Tuesday, Pandora said it was making contingency plans in the face of all the uncertainty, and would provide the markets with an update 'as the potential impact on the 2025 guidance and 2026 targets becomes clearer.' Pandora added that it has accelerated certain cost measures, and is preparing to switch some sources of supply. As of early 2026, it will be ready to ship jewelry directly to Canada and Latin America rather than through Pandora's Baltimore, Md., distribution center. Lacik said Pandora's size, geographic reach and healthy gross margin will give it flexibility if tariffs do come into effect. 'One of the strengths we have is that our gross margin is already operating at a very high level, higher than most of our competitors. That means I have more [scope] to rejig my value equation,' said Lacik, adding that Pandora's size — it operates in more than 70 countries, and had revenue of 31 billion Danish kroner, or $4.31 billion, in 2024 — was an advantage. In the first three months of 2025, sales rose 7 percent to 7.35 billion Danish kroner, or $1.12 billion. Underlying growth was 6 percent, while new store openings bolstered sales by 4 percent.
Business Mayor
07-05-2025
- Business
- Business Mayor
Pandora warns U.S. tariffs will spark sweeping jewelry price increases
A charm bracelet on display in a Pandora store in Copenhagen, Denmark. Bloomberg | Getty Images Danish jewelry brand Pandora has warned of significant price increases across the affordable jewelry industry if U.S. President Donald Trump's proposed tariff hikes come into play following the White House's 90-day pause on the levies announced in April. CEO Alexander Lacik told CNBC that current 10% levies on most U.S. imports were 'manageable,' but he noted that if tariffs were to revert to previously announced 'reciprocal' rates, then it would be game changing for jewelry manufacturers. 'Most jewelers that are in the price segment where we operate, they all import from somewhere in Asia. So you could have an argument if these tariffs remain, then it's going to be more expensive for everybody that plays,' Lacik told Charlotte Reed. 'Therefore we should expect that the consumer pricing will see some change to it,' he added. Pandora, known for its popular charm bracelets and silver jewelry, is heavily dependent on manufacturing in Asia, most notably Thailand but also Vietnam, India and China. Those countries were hit on President Trump's April 2 'Liberation Day' tariff announcement with reciprocal tariffs ranging from 26% to 46%. That prompted to the company the following day to warn of a significant potential hit to group revenues, which it valued at around 1.2 billion Danish kroner ($182 million) per year. President Trump later announced a 90-day pause and a lower 10% tariff rate for most countries except China, though it is currently unclear what rate countries will face once that pause expires in early July. Asked what level of price rises consumers could expect if tariffs remain in place, Lacik said Pandora had modelled a number of scenarios but that the final figure was likely to be industry-led. 'We can all speculate: is it going to be the 34[%] or 40[%],' he said. 'We've done a number of different scenarios. But we don't operate in isolation, so we need to see a little bit what the rest of the industry does.' If tariffs remain at 10%, Lacik said it was unlikely the company would need to raise prices. However, if they rose to around 30%, for instance, 'then the world changes.' 'There are different ways to think about this, so let's see where it lands,' he said. A plain sterling silver Pandora bracelet currently retails for around $75, while the company's lab grown diamonds rings are available from $200. Pandora on Tuesday maintained its guidance for 2025 of 7% to 8% organic growth while noting 'elevated macro uncertainty.' However, it lowered its operating profit margin guidance by 50 basis points to around 24%, which Lacik attributed to weakness in the U.S. dollar. The revised guidance excludes the impact of potential tariffs beyond the 90-day pause. However, the company said it will provide an update on the potential impact as the situation becomes clearer. 'What we have not changed for is expected changes due to whatever happens with the tariffs because, as we stand here today, I don't know,' Lacik said. Pandora shares were trading up 2.3% by 1:55 p.m. London time. Pandora rules out U.S. manufacturing Pandora currently employs around 8,000 people in the U.S., primarily across its network of stores. Nevertheless, Lacik dismissed the prospect of relocating manufacturing to the U.S. — a key strategic goal of the president's tariff agenda — saying it wouldn't make any 'financial sense.' 'The U.S. labor cost would be completely uncompetitive,' he said. 'So if we were to do this, the consumer pricing would have to significantly go up.' Costs aside, the jewelry CEO said the country lacks the suitable skills base to produce Pandora's handcrafted goods. 'I employ up to 15,000 craftspeople in Thailand,' he said. 'I can't find that amount of talent that actually has this craft experience in the U.S. So it's actually not so much a matter of cost to begin with, it's about having skilled people who can actually craft the jewelry.' More than costs and labor, however, Lacik said he would be reluctant to boost U.S. investment due to uncertainty. It comes as companies across other sectors, including pharmaceuticals and autos, have been pledging billions of dollars to boost manufacturing in the country. 'The more worrying thing in all this, is that it's not predictable,' Lacik said. 'I think this plagues most people like myself that sit on the business side of things.'
Fashion Network
07-05-2025
- Business
- Fashion Network
Pandora CEO shuns US production, warns tariffs may boost prices
Danish jewelry company Pandora A/S rules out moving production to the US and will instead use price increases to mitigate the impact from potential tariffs, according to its chief executive officer. Alexander Lacik, whose company makes more pieces of jewelry than any other in the world, said in a Bloomberg TV interview on Wednesday that high labor costs and a lack of skilled craft workers prevent him from starting US-based manufacturing. Pandora currently makes 95% of its jewelry in Thailand, which US President Donald Trump has threatened to hit with 36% import tariffs. Pandora also next year plans to open a plant in Vietnam, a country the US has threatened with levies of 46%. Moving to the US 'simply wouldn't work for us because of us being an affordable proposition,' Lacik said in the interview. 'This tariff is an unwelcome aspect.' Pandora is branding itself as an affordable luxury brand, but was forced to raise prices twice over the past year to offset the impact from higher silver prices. If Trump implements the global tariffs when the 90-day pause ends, the Danish jeweler may raise prices further, Lacik said. 'There is not enough efficiency that I could generate in our production or value chain to cover tariffs of, let's say, 40%,' he said in a phone interview. 'It will be passed on to consumers in one way, shape or form.' Following Trump's tariff announcement in early April, Pandora initially said the total impact from the levies would amount to about 1.2 billion kroner ($182 million) annually, with a 2025 cost of about 700 million kroner. However, given the current tariff pause, Pandora has excluded any tariff impact from its 2025 guidance and on Tuesday in its first-quarter earnings report reaffirmed its full-year organic revenue forecast, while trimming its profit margin outlook to reflect currency headwinds. 'If tariffs are 40%, then I have no visibility on what my context looks like, so therefore no point in guiding,' Lacik said. 'The moment I know, then we will have to go back and either confirm the current guidance or adjust it a little bit. Who knows?'
