Cost-cutting overhaul lifts jewellery maker Pandora’s share price

Jewellery maker Pandora’s share price soared in early morning trading today, as investors welcomed a radical cost-cutting plan put forward by the embattled fashion group.

The Danish jeweller saw the value of its shares climb 14 per cent this morning after the retailer revealed plans to save 1.2bn Danish crowns (£141.1m) in a bid to revitalise its fortunes.

Restructuring plans and marketing efforts to boost demand in its female market were laid bare under Pandora's "Programme Now" transformation strategy, which could lead to restructuring costs of up to 2.5bn Danish crowns in the next two years, according to the firm.

Pandora said today that it is forecasting sales to slump by three to seven per cent this year following a move to cut promotional activities.

Chief Financial Officer Anders Boyer told Reuters: “We can clearly see that our brand could be sharper and more focused…Our marketing has not provided the juice needed to drive positive like-for-like growth.”

A slowdown in shopping centre sales and a lack of appetite for its new jewellery lines has fuelled a tricky 12 months for the firm, which has been bereft of a chief executive since issuing a profit warning last summer.

Read more: Danish jeweller Pandora loses sparkle as growth forecasts are slashed

In November Pandora reported a 26 per cent drop in earnings before, interest, tax, depreciation and amortisation and a three per cent decline in third-quarter revenues and a three per cent fall in revenue.