Pandora, the world's largest jewelry company, is based in Denmark and has nearly 500 stores more than any of the other major markets. But in a way, the real home is in Thailand, and the company has been manufacturing its products for nearly 40 years.
Like many global companies, Pandora uses a cross-continental supply chain to sell products worldwide at low cost. However, the supply chain became a serious weakness last month along with sudden tariffs in dozens of other countries when President Trump said he would impose a 36% tariff on goods that entered the US from Thailand.
Pandora's stock was one of Europe's worst performances after Trump announced his “mutual” tariffs. A week later, Trump postponed these tariffs until early July and offered a grace period.
But with the threat looming, Pandora's CEO Alexander Rasik doesn't expect the uncertainty that's numbing the business. Unless tariffs return to previous levels, the following year will be turbulent, he said in an interview. For now, he rarely waits to see how investors, customers and competitors react.
“With today's information at hand, I'm going to be engrossed in making big strategic decisions,” Rashik said.
Rasik, alongside business leaders around the world, is working on ways to respond to Trump's unpredictable policies. The Trump administration has begun to show an appetite to lower tariffs, but his initial agreement with Britain and China has raised more questions than answers, and tariffs are still higher than they were months ago.
Although some aspects of the trade war have been suspended, Pandora and other multinationals are in scope and are waiting for more agreements to be completed.
Pandora, best known for her silver charm bracelets, has been making gems in Thailand since 1989. Thousands of people are handcrafting their products in three factories. The company is building a fourth factory in Vietnam, but Trump is threatening a 46% tariff on Vietnamese goods.
Last year, the company sold 113 million gems, selling them about every three seconds, becoming the largest jewelry brand with stores in over 100 countries. A third of that revenue, 9.7 billion Danish cloners, or $1.4 billion, have been generated in the US, with Rasik saying he has no intention of leaving the company's most profitable market.
But prices will rise, he said, and it is unknown who will bear the brunt of it.
“The big question is, am I trying to convey everything to US consumers, or are I going to put out peanut butter and raise the price globally for Pandora?” Rashik said.
However, Pandora holds months' worth of stock, giving it time to see how other jewellers change their pricing and decide.
You can do a few things right away, like streamlining parts of your supply chain. The day after mutual tariffs were announced, Pandora said they would change the distribution so that products sold in Canada and Latin America would not move the company's distribution hubs in Baltimore.
Moving production to the US is not considered due to increased labor costs. Pandora employs around 15,000 artisans in Thailand and is hoping to hire another 7,000 in Vietnam.
In its revenue report last week, the company estimated the costs of the trade war. High tariffs on Thai imports, 36% and Chinese imports (145%) will cost Pandora 500 million Danish cloners this year, $74 million, followed by $900 million Danish cloners, $135 million.
But the jewelers aren't panicking. In fact, economic curveballs are beginning to feel normal, Rashik said. “We're ready for a fight,” he added.
When he joined the company as CEO in 2019, Pandora was struggling. The stock price has fallen more than 70% since its peak three years ago. Rasik has enacted a “complete overhaul” and focused on new branding and store designs, and “affordable luxury” labels, establishing a showcase for not only charm but also a complete jewelry line.
It then prepared the company for the exams that were hit by the global economy. First, the Covid-19 pandemic was when 15,000 store employees were sent home and some factory workers slept in cots to continue production. There was a risk that customers would be pulled back due to a surge in inflation.
Rashik's strategy seemed to work. Pandora's stock price hit a record high in January. However, it has since fallen by more than 20%.
The company was able to protect itself from some of the trade disruptions. After Trump raised tariffs in China during his first term, Pandora halted all sourcing of showroom furniture and display materials in its 3,000 stores from China.
“We were somewhat prepared,” Rashik said, and they said, “we didn't get our pants completely wrapped around.”
