Core Viewpoint - Pandora A/S is significantly downsizing its operations in China, planning to close 100 stores and initiate large-scale layoffs, reflecting a drastic decline in sales and market presence in the region [1][2]. Group 1: Financial Performance - In Q2 2025, Pandora's sales in China dropped to 96 million Danish kroner (approximately 110 million RMB), an 11% decline compared to 2023 [1]. - Comparable sales in China fell by 15% in Q2 2025, while the overall group saw a 3% increase in comparable sales during the same period [1]. - From 2019 to 2025, Pandora's revenue share in China plummeted from 9% to just 1%, with sales in 2019 reaching 1.97 billion Danish kroner (approximately 284 million USD) [1]. Group 2: Market Dynamics - The decline in Pandora's performance in China is attributed to multiple factors, including a shift in consumer preferences towards "value retention," with younger consumers favoring gold jewelry from local brands [2]. - The Chinese gold consumption increased by 6.72% in 2023, indicating a growing preference for high-value items [2]. - Pandora's product materials, primarily consisting of 925 silver and artificial gemstones, are perceived as having low value retention, leading to consumer dissatisfaction [2]. Group 3: Competitive Landscape - Pandora faces intensified competition from luxury brands like Cartier and Tiffany, as well as emerging domestic brands like HEFANG, which effectively utilize celebrity marketing and rapid design iterations [3]. - HEFANG's marketing strategy connects its products to the "independent spirit of urban women," successfully attracting younger consumers, while Pandora's marketing remains traditional with less than 20% of sales from online channels [3]. - Rising costs of silver, a key material for Pandora, have pressured the company to increase prices by 5% and 4% in late 2024 and early 2025, respectively, but these increases have not alleviated cost pressures [3]. Group 4: Global Market Performance - Despite challenges in China, Pandora's global revenue reached 7.075 billion Danish kroner in Q2 2025, up from 6.771 billion Danish kroner in the same period last year, driven by strong demand in the U.S. market [4][5]. - The U.S. market is projected to account for 34% of Pandora's total revenue by 2025, becoming the company's largest market [5]. - The company is shifting from a direct retail model to a local retail partner model in China to reduce fixed costs, although the success of this strategy depends on redefining its market positioning [5].

Core Viewpoint - Pandora is planning to significantly reduce its presence in the Chinese market, expanding its initial plan to close 50 stores to 100 stores, indicating a strategic retreat from this market [1][13]. Group 1: Store Closures and Market Presence - Pandora has announced the closure of 100 stores in China, with a noticeable reduction in its presence in Henan province, where only 6 authorized stores remain [1][3]. - Despite the announced closures, some stores in Zhengzhou are still operating normally, with staff claiming they have not received any closure notifications [3][6]. Group 2: Competitive Challenges - The brand faces competition from local retailers, as evidenced by a situation where Pandora sought to enter a high-traffic area within a local store but ultimately did not succeed [6]. - The need for an international jewelry brand to compete with local food vendors highlights the challenges Pandora faces in lower-tier markets [8]. Group 3: Consumer Sentiment and Product Value - Consumer feedback indicates dissatisfaction with the quality of Pandora's products, with reports of silver chains tarnishing quickly, leading to perceptions that the products do not hold value [8][13]. - The resale value of Pandora products in the second-hand market is low, with prices based on silver weight ranging from 5 to 10 yuan per gram, and many retailers refusing to buy back the products [13].