Jeweler Smashes a Cultural Barrier With Welcome for All Shoppers

(Bloomberg) -- Rachel Maia isn’t your everyday Brazilian CEO.

Her 13th floor office is the epitome of zen, with fluffy rugs and the scent of essential oils drifting through the air. The 46-year-old is clad in a flowing garment, bedecked in jewelry, with flats in place of the high heels so commonly seen among high-ranking businesswomen. You wouldn’t know she’s under pressure to deliver results at the helm of Danish jeweler Pandora A/S’s Brazil business, as the country struggles to emerge from a two-year recession.

Pandora’s strategy is based on an open-door policy, providing a welcoming environment to all potential customers and not just those who look like they will spend a lot of money on the company’s popular charms and bracelets. Think Julia Roberts’s shopping spree in 1990’s “Pretty Woman.” While this might seem antiquated in the U.S., welcoming all levels of society is part of breaking down barriers in Brazil.

“We’re working to demystify luxury in Brazil,” she said. “In the past, jewelry stores would receive customers behind closed doors. Now our doors are wide open and we offer discounts.”

Pandora, which first came to Brazil when the economy was booming in 2009, saw growth in the country disappear last year from an average 40 percent annual increase in same-store sales. The slump comes at a time when the U.S. is seeing growth weaken. The U.S. made up $766 million of Pandora’s $1.02 billion in Americas revenue last year, with Brazil contributing a significant portion of the rest.

Living Proof

Maia’s often the only woman in the room -- not to mention the only black woman. Diversity efforts and acceptance of powerful female executives are improving in Brazil, but progress is slow. Of the nearly 60 companies listed on the benchmark Ibovespa stock exchange, not a single CEO is female or black.

“I’m an example that it’s OK for women to fight to be in leadership,” said Maia, who peppers her Portuguese conversations with English phrases. “And more than being an example of female leadership, I want to be an example of competent leadership.”

Maia worked hard to get to where she is, heading to Canada to learn English and taking executive positions at 7-Eleven and Novartis AG before joining Pandora in 2010.

Along with the local heads of Twitter Inc. and Kimberly-Clark Corp., Maia is part of a group of women called Yes We Can, inspired by Barack Obama’s campaign slogan. She recently met with the former U.S. President in Sao Paulo, a moment she described with unbridled joy and pride, as she showed off a picture of the two, shoulder to shoulder. On her office coffee table, she has a book of photographs of former First Lady Michelle Obama.

2018 Turnaround

Maia, a Sao Paulo native and former Tiffany & Co. executive, is optimistic -- things started to look up in June and she sees the economy making a turnaround next year, she said.

While consumers have been leading Brazil’s economic recovery as below-target inflation and falling interest rates provide a boost to purchasing power, the outlook is still cloudy. Retail sales fell in August for the first time in five months, and the political scenario isn’t much clearer. The current caretaker government has dismal approval ratings and is pushing through controversial reforms.

Politics aside, Pandora is intent on pushing through its five-year plan through 2022. The company plans to add at least three stores every year to an estimated 98 it will have by year-end, and pop-up stores to test new locations. Maia wants to get back to double-digit growth and increase Brazil’s relevance in the company’s worldwide business. It’s not easy in a culture whose middle class has traditionally shunned ostentatious displays of prosperity.

Diversity Works

Pandora needs a Brazil comeback, if only to put a damper on the short-sellers like AQR Capital Management LLC targeting the jeweler expecting it to suffer in the U.S., where shopping mall traffic is under pressure. Pandora’s shares are down 35 percent this year, making it one of 2017’s worst performers in the Stoxx Europe 600 index.

Revenue from the Americas of 1.7 billion krone ($270 million) in the second quarter was down 1 percent in local currency from a year earlier, according to a company filing. The U.S. saw revenue drop by 2 percent in dollars.

Still, Maia speaks optimistically about Pandora’s future in Brazil, hinting at upcoming partnerships. And she says she’s living proof that hiring executives that don’t fit the usual template is smart strategy.

“Financially, you have to prove that diversity works,” says Maia. “A person like me can bring success to a company.”

To contact the reporters on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net, Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net.

To contact the editor responsible for this story: Arie Shapira at ashapira3@bloomberg.net.

©2017 Bloomberg L.P.