pandora jewelry business plan

Jewellery maker Pandora bets on 'Gen Z' to boost sales

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How Pandora Jewellery grew to become a mega global brand

Franchise Focus: Global growth did not begin for Pandora Jewellery until 2003 when the brand entered the U.S. with its highly popular signature charm bracelet

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Reg Shah has seen his share of jewellery fads come and go during his decades-long career in the industry. So when Pandora jewellery first entered Canada in 2004, he wasn’t sure how it would be received. Still, when a good friend told him about its long history and success in Europe, he decided to take a chance and sell it at his own store, Michael Anthony Jewellers, in Edmonton.

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“It took off immediately. I had never seen anything like it,” he said. “It surprised me because in North America not many people had heard about it but its concept of affordable, personal luxury really resonated with buyers.” When the brand started selling franchises in Canada in 2011, he was among the first to put his name forward. He now owns four Pandora franchises with two more coming online in 2014.

How Pandora Jewellery grew to become a mega global brand Back to video

Founded in Copenhagen in 1982 by a Danish goldsmith, Pandora is now a global brand with some 10,000 retailers in 70 countries around the world. In 2011, more than one piece of Pandora jewellery was sold every second. Vertically integrated with inhouse design, manufacturing, global marketing and direct distribution, Pandora spent the first two-thirds of 30-plus years honing its business model, brand and mission: to make high quality, personalized jewellery accessible.

Global growth did not begin until 2003 when the brand entered the U.S. with its highly popular signature charm bracelet. “It started small in Maryland, selling on a wholesale basis to gift stores and then jewellers,” said David Lamb, manager of franchise development.

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“As it began to catch on, we started selling more to branded jewellery stores and within those environments we had different levels of participation based on how much product a customer bought and how much space they devoted to selling Pandora products. In this wholesale model, the highest level branded environment was a shop in a shop. It’s a decidedly slower growth model but one that has been successful in most parts of the world.”

In 2008, Pandora opened its first U.S. retail store in Mall of America in Bloomington, Minn. (the first Canadian store opened in the Shops on Steeles in Thornhill, Ont. in late 2009). It launched its franchise model in 2009 in Australia, and the first U.S. franchise store opened in 2010.

Now, there are 332 Pandora franchise stores in North America, the Caribbean and Central America, with 55 spread across Canada.  “We were a product that became popular during the market crash and I think the timing had a lot to do with the franchise success,”  Mr. Lamb said.

“Jewellers weren’t selling as many high ticket items then our product came along. It was a new look, affordable, interchangeable and it’s all about life memories and unforgettable moments. Consumers love it.”

Mr. Shah agreed: “As a traditional jeweller, I can tell you this brand has saved a lot of jewellery businesses throughout the U.S. and Canada. That’s how strong it is. Pandora helped the jewellery industry come out the other side of the recession.”

As for consumers, they love it so much that Pandora is now in most of the major, high-traffic retail centres across Canada. “This concept was created for regional shopping malls with a lot of women’s fashion brands and that’s the model we’re staying with,” Mr. Lamb said. “Our strategy was to pick the best mall in each market to start, see how the stores performed and go from there. Most of the franchisees came from the dealer base of jewellers we had already established and the majority own multiple locations.”

The total investment required to set up a franchise sits at $800,000 to $1-million a store.

As a franchisee, Mr. Shah says he receives tremendous support from Pandora in all areas of the business: operational, merchandising, product development, performance metrics, real estate, training.

“They are a true partner. The regional operating managers are attuned to my staff in every location. They pay a lot of attention to what’s happening in the store and are always looking for feedback on how how to improve and keep moving forward.  They are willing to roll up their sleeves to make sure the business is pointed in the right direction.”

Pandora’s winning marketing strategy

As a company, Pandora is extremely strong when it comes to establishing effective marketing strategies. Keshia Holland, marketing manager, PR and online, shares Pandora’s approach to marketing:

Q Where do you focus your efforts, traditional media or social media or both? 

A We spread our efforts across all media channels: traditional media (print, broadcast, online) and social. The beauty of the brand is that we encourage our consumers to share the personal stories and unforgettable moments that make life extraordinary. Our jewellery is designed to encourage the sharing of those stories with others, and social media is organically a perfect fit.

Q How do you decide where to direct your efforts? 

A It depends on the message we are trying to communicate. We still use traditional media to push our key messages across because reach and frequency is extremely important but social media gives us an opportunity to engage with our consumers directly in a way that is impossible with print and broadcast.

Q Who is your target market? 

A While we believe there is something in the collection for every woman, our sweet spot is women ages 25 to 49. In recent years we have expanded our key demographic to include a younger audience.

Q How important is event sponsorship? 

A Our sponsorship efforts go beyond events. We want to be sure that we do our part to encourage women to embrace their individuality. Pandora prides itself on being an organization that encourages and supports organizations that work to improve the lives of women and children. What we try to do on a local level is allow our retail partners to sponsor events so both the store and the organization has a local contact. It creates foot traffic for the store and gives the organization someone to go to in the future.

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How Creative Direction at Pandora Is Evolving

As the world’s largest jewellery brand by volume, Pandora is sold in more than 100 countries across six continents, and through more than 10,300 points of sale. Despite its scale, the creative process — carrying designs from early concept stages to end-product — remains detailed: each Pandora piece is hand-finished and passes through an average of 25 pairs of hands during the crafting process.

Pandora’s creative process is a critical component of its wider Phoenix strategy — its multi-phased plan to deliver sustainable and profitable revenue growth. Design is the second of four growth pillars, where the business aims to imbue new products with both customer insight and creative expression.

Indeed, Pandora harnesses direct links to its customers to transform ideas into tangible prototypes, beginning by identifying market trends , gathering customer feedback and evaluating local market needs. Central to Pandora’s evolving design process is purchasing 100 percent recycled silver and gold for the crafting of its jewellery — a plan it achieved a year ahead of target, as part of its plans to halve its greenhouse gas (GHG) emissions by 2030, from a 2019 baseline.

These strategies all form part of Pandora’s bid to broaden its appeal and increase its brand desirability within new markets and demographics, as sustainability and aesthetics — and how they interact — become key considerations for end consumers.

Now, BoF sits down with creative directors Francesco Terzo and A. Filippo Ficarelli for insight into Pandora’s evolving creative process, how innovation is encouraged and actioned, and how their creative ambitions are evolving.

How do you balance Pandora’s recognisable aesthetic while innovating its offering?

AFF: The exercise we are doing now is effectively all about building an identity. In people’s perceptions of Pandora, we are working with an established aesthetic. We know we have work to do to help people unlearn something, which has almost become a value for us — unlearning something in order to progress.

What we want to do now is define that aesthetic as more of a value — these charms, these bracelets, the ability to personalise your items, it’s all about allowing the customer to express themselves, and that is something we wanted to carry through the entire Pandora portfolio. From personalisation to affordability and inclusion — this is our culture and it’s something we want to broaden into the brand that we are creating.

FT : Now, we are moving from an idea to a portfolio and it’s in that portfolio that we will be able to develop different aesthetics. The role of the creative director spans curation and creation. Evolving and respecting brand heritage while building the brand’s future are very much connected; the heritage has to be present as we create the full portfolio.

The journey that we are on right now is really about bringing all of our community with us, from charms into a full jewellery brand. That thinking is what will allow clear category expansion, with explorations into projects with lab-grown diamonds.

What role does consumer insight and behaviour play in shaping Pandora’s creative direction?

AFF: As a global brand, it is important for us to work with consumer insight to capture the feelings and attitudes of our global audience. We can see interesting differences play out at different times of years, in different regions or within specific communities. It involves a lot of collaboration with different teams who can share with us more localised insights.

FT: The Pandora consumer has evolved a lot as the business has grown, so we do a lot of work to gain a social understanding of these cultural shifts and evolutions taking place. Creatively, we are placing storytelling at the heart of our creative direction. Opposite that is the people — where the story comes from in the first place.

The Pandora consumer has evolved a lot as the business has grown. We do a lot of work to gain a social understanding of the cultural shifts taking place.

We want to tell stories that are anchored in a cultural foundation, which is why we collaborate with our consumer insight team — to understand where the zeitgeist is going. At the same time, the stories we tell have to appeal to a large number of people, so our designs and direction needs to be anchored in something culturally relevant for broader communities.

How is innovation encouraged within the creative team?

AFF: At Pandora, I think there is a real link between innovation and sustainability — and innovation in jewellery is strongly tied to finding better techniques or researching different materials. We have a physical innovation centre that acts almost as a playground for us to experiment with and expand new ideas, techniques and functionalities.

FT : Having our own innovation centre in our own crafting facility in Bangkok means we are able to encourage innovation with regard to materials, stones and metals, into techniques and even into product functionality.

Underscoring this innovation is the importance of remaining an affordable brand. We view this not as a limitation but rather as an opportunity to bring innovative new techniques and products to wider audiences in an affordable way.

What is a recent creative project that exemplifies Pandora’s collaborative strategic vision?

FT : Across our campaigns, we go back to the idea of rewriting a narrative. In our recent “Be Love” campaign, we wanted to show that Pandora can break away from the traditional concepts of love and instead connect to different forms and interpretations — love of nature or volleyball, your partner or your mother. We wanted to break from the traditional codes of shopping for jewellery.

This isn’t something that customers would expect from Pandora and that’s exciting for us — allowing us and customers to “unlearn” ideas.

Similarly, when we worked on our campaign around diamonds, the message was all about inclusivity. Diamonds are for everyone — not just a gift from a man to a woman or symbolising engagement. That narrative still feels new in the jewellery business — it’s important for a brand like us to innovate those narratives.

AFF: This month, we are launching a new collection called Essence, with the objective to expand and define ourselves as a cohesive, complete jewellery brand.

We feel this collection — built on organic and fluid shapes leaning into Nordic aesthetics, reflecting the brand’s heritage — exemplifies that strategy. This isn’t something that customers would expect from Pandora and that’s exciting for us, allowing us and customers to “unlearn” ideas. The collection allows wearers to layer up products — a reflection of the work we have done to understand customer tastes and preferences.

How is Pandora’s focus on ethical, target-based business practices reflected in the design process?

AFF : For us, sustainability is regarded as a business value that we are constantly working to apply. A brand of our scale needs to consider the consequences of our actions and output — it is something that is very present as we consider our intentions as a business.

For instance, our commitment to only source 100 percent recycled silver and gold now acts as the base of our creations. From here, we can build on this idea with the intention to source or create with less impactful stones. Lab-grown diamonds are a great example of a classic stone, but being recreated in a less impactful way.

FT: The principles that guide us are: what does it mean to be ethical and truly create value in this sector today? How can we be a rule-breaker? That’s also an exciting element about sustainable innovation — it can break a lot of rules and traditions within the jewellery industry which directly speaks to our goals of creating something new and interesting.

When we entered the lab-grown diamond market, it generated a big conversation. This is a measure of success for us — not just the commercial success, but the conversations we generate about more ethical processes and products.

Creatively, what are your ambitions for Pandora over the medium term?

FT : Retaining and building our cultural relevance is key, while holding onto the core values of Pandora.

AFF : We are working so that people perceive us as a cohesive jewellery brand with a strong identity, voice and point of view. Our point of view is this: to create a culture that inspires people to express themselves. We want to bring these intangible elements into our collections, our styling, our communication, in the feeling that you have in our store — across all of these important touchpoints.

This is a sponsored feature paid for by Pandora as part of a BoF partnership.

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How Data and Tech Power Jewelry Brand Pandora’s Mission to ‘Give a Voice to People’s Loves’

• April 10, 2023 at 9:00 AM EDT
• By Nicole Silberstein

Digital transformation isn’t easy for any brand, but for Pandora , with its 40 years of history and more than 6,400 points of sale across 100 countries, that effort is particularly complex.  

Best known for its charm jewelry, the “affordable luxury” brand sells more than 100 million pieces every year, making it the largest jewelry brand in the world by volume . Globally, 80% of women are familiar with the brand and 30% of them own a Pandora item, so the stakes for the brand’s digital transformation are high.

“We’re a fully integrated organization, so we have our crafting facilities in Thailand, our distribution, our sales — we don’t quite have our own silver mine, but we handle everything from the raw material to the bracelet, and that means that every piece [of this digital transformation] needs to hang together ,” explained Susan Van Dijk, SVP of Global Business Services at Pandora in an interview with Retail TouchPoints . “We need to make sure that the rollout, and what we roll out when, is all very coordinated, otherwise one bit will fail and then the whole chain breaks.”

The ultimate goal is to deliver personalized, omnichannel experiences to customers in all of Pandora’s 100 markets. To do that will take a years-long effort, already underway, to break down data silos and transform the company’s global operations .

“As an organization, we’ve grown through the wholesale side,” said Van Dijk. “Now we have a lot more owned-and-operated stores, and when you build a system to target mostly wholesale, that’s a whole different level of transactions than if you have your own stores. So getting to a place where we have a system that caters to a broader way of doing business, including our own stores and also online, is the key .”

Central to this effort will be transitioning to SAP’s Enterprise Resource Planning (ERP) system, an endeavor that won’t be completed until 2026. The ERP system that Pandora is currently using is being phased out, necessitating a shift, but Van Dijk hopes that by establishing a new “lean digital core” with SAP, the company can not only improve the omnichannel experience for its customers but also streamline back-office operations.

Turning Customers into Brand Ambassadors

After more than 30 years operating in brick-and-mortar, Pandora began to debut online in markets around the world in 2014 . Now, ecommerce has grown to capture 21% of the retailer’s global revenue, with stores still accounting for the majority ( 51% ) while wholesale and third-party sales make up the difference ( 28% ). In 2022, Pandora banked 600 million visits across its online channels and stores.  

“Through the pandemic in particular, online has become a really important and growing part of the organization,” said Van Dijk. “The store side of things is still important because it’s a product that people want to interact with. They want to see [the jewelry] and try it on, so recreating that experience online is one of the things that we’re trying to get to so that we can give our consumers that true omnichannel experience.”

The key, according to Van Dijk, is having “a lean operation behind the scenes that will allow us to provide the right information to our consumers,” in particular when it comes to inventory. “The data flows are so important in making sure we have the right inventory information, so that what the consumer sees online is actually available in the store for things like click-and-collect. With the manual interventions that are required in a lot of these older systems, there is a chance that there are mistakes, and the product may not be there, which is a horrible consumer experience.”

Pandora, needless to say, is opposed to horrible consumer experiences. “ Some talk about ‘taking away the pain of shopping,’ but at Pandora we want to celebrate shopping and make it a personal experience where we — due to SAP technology and our other digital tools — understand you, surprise you and delight you,” said David Walmsley, Chief Digital and Technology Officer at Pandora in a statement. “We are in the business of selling memories, so for Pandora, combining store and technology is where the magic happens. If we do this right, we are not only creating convenience for our customers, we are creating brand ambassadors.”

Improving EX (the Employee Experience)

Beyond offering a better experience to customers, Van Dijk also is looking to the SAP transition to improve the experience for Pandora employees, from the back office to frontline associates. “Right now I have teams who sit up until 12 o’clock at night to wait for the system to churn things through, so this will be a much better experience for them, but also in the stores as well,” she said. “As an example, with a refund, [store associates] can process that in the POS system, but then they have to send an email to someone to also process it in another system because we can’t make those integrations anymore. That just takes a lot of time away from our colleagues in-store, and it’s not what they signed up for. This will enable them to focus more on what they like doing, which is selling.”

By streamlining the company’s data with the help of SAP’s ERP system, Pandora expects to be able to increase transparency and efficiency across the entire organization, as well as better utilize the data they have to “do the analysis and see how we use that to grow further,” Van Dijk said.

The full SAP implementation will not be completed until 2026 because of the sheer size of the effort — across the 100 countries where Pandora operates, they must not only change the technology they are using but also the way they work.

“We are moving away from a very highly customized instance of ERP to a much more ‘out of the box’ solution,” explained Van Dijk. “That means that we need to really look at the design phase, which we’re in right now, to understand what is actually in that ‘box’ and then say, ‘Okay, how does that help us standardize, and what needs to change in the way we operate to make sure we enable the system in the right way? If it were just about the technology, I’m not saying it would be easy, but it would be easier. This is about a total transformation .”

For her part Van Dijk hopes no one outside the company ever notices all the work that is going on behind the scenes: “These kinds of implementations, the less you hear about them, the better,” she said.

She does, however, hope that customers will notice that this 40-year-old brand is continuing to evolve as they do: “This is also the way for us to make sure that we can respond to consumer needs and how the consumer wants to interact with us,” Van Dijk said. “ If you have this vision to give a voice to people’s loves, you need to make sure that the products and experience that you design behind that respond to customer needs and stay relevant .”

• Posted In: Business Intelligence , Data & Analytics , Digital Commerce , E-commerce Experience , Inventory & Merchandising , Omnichannel Alignment
• Tagged With: customer experience , digital transformation , enterprise resource planning , ERP , Featured , global commerce , inventory management , Jewelry retail , Pandora , Retail ThinkTank (2023) , Retail ThinkTank: Business Agility & Innovation (2023) , SAP

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Parent item expand the sub menu, luar for the people — and madonna — for spring 2025, getting ready for michael kors with mindy kaling, ftc makes a $365m argument against tapestry’s deal to buy capri, pandora raises 2024 guidance as revenue soars 18 percent.

CEO Alexander Lacik said Pandora is increasing its market penetration by widening its focus beyond the charm bracelet.

Bureau Chief, London

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LONDON —   Pandora is rapidly increasing its penetration in the demi-fine jewelry market, reporting organic growth of 18 percent to 6.83 billion Danish kroner, or $980 million, in the first fiscal quarter. 

The upbeat results for the three-month period led the Copenhagen-based jeweler to raise its 2024 revenue guidance. 

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He acknowledged the market overall has been “sluggish,” but said Pandora has managed to grow its customer base by increasing its investments and focusing on “jewelry beyond the charm bracelet.”

Lacik added: “We look forward to fueling our growth with exciting strategic initiatives over the coming years.”

He said the brand’s Timeless collection grew 43 percent in the three months, compared with the Core charm bracelet offer which was up by a midsingle digit. Pandora Lab-Grown Diamonds also saw progress, with 87 percent growth.

In the first three months, Pandora said like-for-like growth was 11 percent, while network expansion was 5 percent.

In absolute terms, revenue increased by 1 billion Danish kroner, or $140 million, compared to the corresponding period last year.

Underlying growth in key European markets and the U.S. was 9 percent, while the rest of the world grew by 18 percent. 

Gross margin reached a new record-high of 79.4 percent, which the company said was supported by channel mix, pricing and efficiencies, as well as “some tailwind” from silver prices and foreign exchange rates.

EBIT margin was 22 percent, “reflecting the strong growth [that] more than offset the planned step-up in marketing investments as part of the restaging of the brand,” the company said. 

Analysts at Jefferies said the first-quarter numbers confirm a business in “strong shape,” with like-for-like sales accelerating later in the quarter, “and strong margin delivery continuing. This comes ahead of both the tougher second half comparative structure and the launch of the Essence product line.”

Essence is a 46-piece collection built around soft, organic shapes that is set to roll out later this year. It is currently only available in the Netherlands, according to Pandora’s website.

Pandora began pursuing its Phoenix expansion strategy last year with the aim of engaging as many consumers as possible, offering them value, quality craftsmanship and top-notch service. It has been engaging with the high-end fashion world, too, sponsoring fashion showcases and awards, and venturing into lab-grown diamonds and pearls.

Last fall, during its capital markets day, the company said it was planning 400 to 500 net openings between 2024 and 2026. Pandora currently has around 6,500 points of sale in 100 countries.

More than 70 percent of the stores are directly operated, and Pandora is increasingly looking to take back ownership of franchises in many established markets. The company said it is thinking and acting like a direct-to-consumer retailer.

It is also building bigger, brighter concept stores that can accommodate the different collections and offer services to customers such as repair, cleaning, ear piercing and one-to-one appointments that can be pre-booked online.

In addition, Pandora said it plans to double revenue in the U.S. by 2025 (compared with 2019). In 2022, revenue in the U.S. was 7.9 billion kroner, or $1.12 billion.

Revenue is expected to reach 34 billion to 36 billion Danish kroner, or $4.8 billion to $5.1 billion, in 2026 compared with an expected 27 billion kroner, or $3.8 billion, for 2023.

EBIT is expected to reach 8.8 billion to 9.7 billion kroner, or $1.2 billion to $1.4 billion, by 2026.

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How pandora’s marketing strategy gave the heritage brand an ultimate glow-up.

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Pandora's marketing strategy has given the heritage a major glow up

From key campaigns featuring Pamela Anderson to elevated social media aesthetics, the Danish heritage jewelry brand Pandora is enjoying the success of a major glow-up. Exhibiting a new look that’s modern, warm, relevant, and inclusive, the household name famous for charm bracelets and dainty necklaces has become not only trendy but also stylish and desirable.

Most recently in August, the brand sponsored the bi-annual Copenhagen Fashion Week, hosted a star-studded dinner event with Anderson and her two sons in attendance, and further collaborated with ROTATE , the Danish It-girl brand, on the runway. Perfectly styled with Pandora’s iconic designs from the PANDORA ESSENCE and Pandora Moments collections, ROTATE’s runway looks also see custom pieces hand-crafted by Grete Henriette — like the one created from 2000 Pandora Timeless sterling silver tennis bracelets (worn by Toni Garrn), and a flower motif made from Pandora Moments 14k gold-plated rolo chain necklaces. Jeanette Madsen and Thora Valdimars , Creative Directors of ROTATE, say the jewelry pieces used are “elegant, raw and sculptural”, perfectly finishing the styling of the brand’s garments.

For Pandora, the glow up probably has something to do with Mary Carmen Gasco-Buisson, the brand’s Chief Marketing Director, who took the position in 2022 to ensure that the affordable luxury giant stays not only up to date, but relevant and ahead of competitors.

Pandora teams up with ROTATE for its debut runway show at the Copenhagen Fashion Week

“It’s important to show Pandora in a new light,” says Gasco-Buisson, who led the BE LOVE campaign and orchestrated a string of strategic events in helping uplift the brand’s image and consumer demographics.

22 Of The Best Online Jewelry Stores For Stunning Pieces, At Every Price

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But marketing alone will not do it, adds Gasco-Buisson. “You can’t have a great brand without amazing products.” The CMO says she works closely with Stephen Fairchild in products — who Gasco-Buisson says is a master in translating marketing vision to product reality — to ensure Pandora’s designs represent what the brand stands for.

During Fashion Week, Pandora also unveiled the BE LOVE Heart charm. Reimagining the iconic heart charm from the brand's first collection in 2000, the newly designed BE LOVE Heart charm is a bold reiteration of the brand’s original form, featuring a more three-dimensional shape with round, linear elements, evoking the feeling of both individuality and strength, while an engraving on one side reminds the wearer to BE LOVE.

Available in sterling silver and 14K yellow gold plating, the charm comes in a medium and maxi size that creates more options for styling. Having been seen on industry opinion leaders and endorsed celebrities, The BE LOVE Heart charm has already become a much-anticipated piece ahead of its launch in stores and online worldwide from August 25, with prices starting at £25.

Launching on August 25, Pandora has unveiled its updated BE LOVE design during Copenhagen Fashion ... [+] Week

It’s difficult to ensure longevity and upward trend in profitability under an economic climate that has proven to be challenging for many brands in the fashion and beauty sphere. On the other hand, there’s a view that the affordable luxury market, which Pandora positions itself in, will stay strong as consumers continue to look for meaningful items that will comfort the mind and soul.

Despite the rising costs in silver and other raw materials — which Gasco-Buisson says impacts the brand directly, Pandora’s price increase has been kept to a minimal. “When you are committed to being accessible, you have to find every single way to avoid hiking up prices thoughtlessly. We continue to improve the ways we do things, and bring in some technology to help us.”

In addition to being vertically integrated from an early stage with production standard established and tightly maintained, Pandora is also able to retain a healthy level of profit thanks to its revenue being mostly generated through DTC channels — only a small margin of Pandora products are sold via third party platforms or stores.

Pamela Anderson, wearing Pandora's relaunched BE LOVE heart charm necklace

“Accessible luxury is not just price, It’s both price and quality, hence the term luxury,” Gasco-Buisson says. Thanks to the sheer scale of the operation (Pandora produces over 100m pieces of jewelry on an annual basis), amongst other things, Pandora is able to offer unparalleled quality at accessible prices, whilst a brand producing “merely” a million pieces wouldn’t be able to do so.

“I believe that if you want to do a lot of good in the world, you have to be a viable business.” And a viable business Pandora is. According to accounting stats published by the brand, Pandora's revenue reached 4.2 billion US dollars in 2023, up from 3.96 billion in the previous year. “We are not here for the short term, no.” beams Gasco-Buisson.

So what else is left to do? According to Gasco-Buisson, still a lot. “Consumers, they move. Culture moves, aesthetics move, and we need to be relevant as a desired product.” There’s tons to do as we continue to expand by entering new geographies.”

Pandora's Chief Marketing Officer, Mary Carmen Gasco-Buisson, says it's important to showcase the ... [+] brand in a new light

“And you know, we continue to strengthen our customer experience. What it’s like to be the Pandora store and what it’s like to be assisted.” For Gasco-Buisson, retail is clearly an important component in ensuring Pandora’s market position on a global scale. Pandora’s new flagship store in Copenhagen, newly renovated and dazzling in the shade of coral pink, has an unmissable welcoming atmosphere and is easily one of the buzziest stores I’ve been to — filled with actual customers looking to buy, rather than to window shop.

Sustainability, a commonly used word by many big corporates, is part of a built-in culture at Pandora. “Things will get tough, yeah, silver will increase [in price] and we will still keep doing 100% recycled silver, even if it’s more expensive, because that is what we do. We will figure it out.”

“We’ll figure it out” is the general attitude I’m sensing from Gasco-Buisson, an attitude that’s 100% can-do laced with a great sense of ownership and accountability. And when asked what’s next up in her to-do list, Gasco-Buisson doesn’t hesitate: “Working towards making Pandora a full jewellery brand and a go-to choice for those seeking unique and meaningful jewelry.”

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From its sustainability efforts to its direct-to-consumer focus, here’s what the Danish jewelry brand has in the works.

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Pandora: Transformation Into Full Jewelry Brand

• Pandora has transformed from a one-product company to a versatile jewelry brand with a new strategy that focuses on brand desirability and product personalization.
• The company's strategy has been successful, with increased revenues and operating margins, and positive investor response to its first-quarter earnings.
• Pandora has a capital allocation plan for shareholders, with buybacks and dividends, and its estimated annual return aligns with its historical returns.

Klaus Vedfelt

Investment Thesis

Pandora ( OTCPK:PANDY ) is a Danish jewelry brand offering a wide range of affordable products such as rings, bracelets, necklaces and earrings. The company has vertically integrated supply chain and covers the production, marketing and distribution of its products. At the beginning of May, the company reported its first quarter results and confirmed its transformation into a full jewelry brand. Even though the annual return on Pandora, with dividends included, would exceed 18.5% p.a. over the past three years, I believe Pandora’s share price does not fully reflect the company’s ability to expand into new products and grow in new markets under its new corporate strategy. In the following, I will describe the company’s business model, its new strategy under the excellent CEO Alexander Lacik, and conclude the article with Pandora’s valuation. Pandora is definitely not a company that makes investors rich quickly. However, I think Pandora is a long term compounder, rewarding patient investors with above-average return over an extended period of time.

From One Product Company to a Versatile Brand

Five years ago, in 2019, Pandora was a different company than it is today. Its stores were over extended, and marketing campaigns were badly managed. Brand degradation and excessive dependence on one product led to a slowdown in sales, declining like-for-like (LfL) metrics, and lower profitability. Moreover, the company generated more than 70% of total revenues from charms and bracelets, which were easily copied by other jewelry brands. In April 2019, Alexander Lacik, an expert on corporate restructurings, became a new CEO with a vision to completely change the corporate strategy. Pandora introduced a new strategy called Phoenix , built on four key pillars: transforming the image of the brand, introduction of new designs, focusing on core markets and personalization of Pandora’s products. Since 2020, the company has focused on increasing brand desirability by shrinking its overextended network of stores, presenting new collections and introducing a wider range of jewelry products at accessible prices.

With the benefit of hindsight, it can be confirmed that Pandora’s strategy works. From 2020 to 2023, the company increased revenues almost by 50%, and at the same time, the operating margin expanded from 19.3% in 2020 to 25% in 2023. Some could argue that 2020 was a low point for many retail businesses due to Covid, however, the company had been facing operational issues long before Covid started.

Annual reports, own work

In May 2024, Pandora reported first-quarter earnings that were in line with the company’s strategic direction and beat investor’s expectations. A new multi-season marketing campaign “ BE LOVE” was initiated and the company upgraded its guidance for organic growth to a range of 8% to 10% for FY24. Proof that Pandora’s strategy resonates well with its customers includes increased like-for-like growth across various collections and increased market share in its core markets. The company estimates that its global market share is approximately 1.3% and sees opportunities for growth in new markets. In 2024, China remains a strategic priority for future expansion, with a new local management team in place.

1Q 2024 Report

Capital Allocation Is a Top Priority

Pandora’s asset-light business model is visible in the company’s high return on invested capital and strong cash generation. In 2023, the management introduced a capital allocation plan for shareholders with a goal to return 14- 17 billion kroner (EUR 1.9 billion – EUR 2.3 billion ) through buy-backs and dividends by 2026. With a current market capitalization of EUR 12.5 billion, the proposed allocation is equal to 15.2% -18.4% biannually, or 7.6% - 9.2% annually. The basic formula for estimating a stock return is dividend yield + buyback yield + growth in EPS. Substituting growth in EPS with organic growth of revenues, the estimated annual return for next two years could be in the range of 15.6% to 19.2%. For the past three years, Pandora generated a total annual return of 18.5% (dividends + stock price change). The future estimated return of 15.6% to 19.2% is aligned with Pandora’s historical returns.

FY23 report, 1Q 2024 report

Given the fact that Pandora is a mature company, we can use a simple one stage Gordon growth model. This model is based on three key inputs: free cash flow, weighted average cost of capital and estimated growth. Free cash flow is an easily obtainable input from the last financial report. WACC needs to be estimated from market data, as does growth of the company. To remain conservative, it is a safer assumption to use the estimated growth of the global jewelry industry instead of Pandora’s organic growth rate, which could be too high for the Gordon growth model. Custom Market Insights estimates the compound annual growth rate (CAGR) for the global jewelry industry to be 4.6% for the period 2024 -2033.

For the past twelve months, Pandora generated a Net Operating Profit after Tax of DKK 5,950 million and Free Cash Flow of DKK 6,265 million. The Weighted Average Cost of Capital was estimated at 10.3%, with key inputs being a Cost of Equity: 11.3% and a Cost of Debt 4.0%. Cost of Debt is easily observable because Pandora has tradable debt with a maturity in 2030 and a Yield to Maturity of 4%.

Market data, FY23 report, 1Q24 report

Plugging in all key inputs, I estimated the fair value of Pandora shares to be DKK 1,226 or 8.1% above the current market price. This estimate is based on a rather conservative assumption of 4.5% average annual growth. However, in recent years, Pandora has been able to grow above the industry average. This corresponds with the company’s guidance, which estimates growth of 8% to 10% for the next two years. Therefore, I would assume that a possible revaluation of shares could be even higher than 8%.

Risks to My Investment Thesis

Pandora is a retail company, and any slowdown in the global economy could negatively impact Pandora’s growth plans and subsequently its valuation. Pandora’s biggest market is North America, which is responsible for 30% of total revenues. This concentration on North America makes it highly dependent on the strength of the US economy. Since Pandora is sourcing 100% of its recycled gold and silver for their jewelry, the company is likely not as impacted by volatility in commodity markets.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

This article was written by

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PANDY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Pandora aims to double its u.s. business, triple in china.

PARIS — Pandora has plans to rise once more.

The Danish jewelry firm, famed for its charms, has unveiled the detailed roadmap for its new growth strategy, dubbed Phoenix.

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Its new ambitions include doubling revenues in the U.S. and tripling sales in China, based on 2019 levels, by improving conversion for core product lines thanks in part to a bigger focus on personalization and digital, as well as by recruiting younger consumers.

“We have vast untapped opportunities in our existing core business and they will drive long-term sustainable and profitable growth,” asserted Pandora president and chief executive officer Alexander Lacik ahead of the company’s Capital Markets Day Tuesday. “Our objective is to be the largest and most desirable brand in the affordable jewelry market. And we have a strong foundation to deliver on that objective.”

The company is targeting an organic compound annual growth rate of 5 to 7 percent between 2021 and 2023 and EBIT margin of between 25 and 27 percent by 2023, an increase of between 2 and 3 percentage points. Pandora completed its previous two-year turnaround plan in May, and has resumed growth in recent months. Its second-quarter revenues jumped 84 percent on the same period last year and 13 percent versus the three-month period in 2019, prompting the firm to raise its guidance for the year, as reported.

During the online investor event, chief financial officer Anders Boyer highlighted that if all of the company’s new initiatives prove successful, it could achieve higher sales gains than the conservative estimates, and it still sees plenty of opportunity for growth further down the line.

“When we started developing this strategy, it quickly became clear that we had more growth opportunities than we could handle,” he told investors and analysts. “It’s clearly a case of priorities,” he said, explaining that longer-term opportunities for the company include expansion in markets like India and Japan as well as potential M&A activity. “We’re only at the beginning of the growth journey we’re embarking on.”

The market rewarded the company’s announcements, sending Pandora shares up 6.8 percent on Tuesday to close at 855 Danish kronor.

Nevertheless, some analysts urged caution. “Pandora has demonstrated impressive resilience against a challenging COVID-19 economic backdrop with healthy channel shift into e-commerce. From here, we view its path to positive revenue growth as more challenging, and we remain cautious on its path towards sustainably positive retail [like-for-likes],” said Piral Dadhania, a luxury analyst at RBC, in a research note ahead of the event. “Easier wins under the turnaround program such as cost savings, closing a handful of unprofitable stores, range rationalization, developing a new branding and store concept and increasing marketing spend have largely been addressed and are in the early stages of deployment. We maintain our view that Pandora’s margins could come under pressure in a flat or negative retail LFL scenario.”

As well as targeting gains in the U.S., Pandora’s largest market, and China, where it has struggled to differentiate its positioning, recruiting young consumers, especially Gen Z and Millennials, will be a core part of the new strategy.

Ahead of the all-important holiday season, the brand will relaunch the Pandora Me range targeting Gen Z, with social media-first activation and collaborations with musicians and artists, for example. “We will talk in their language on the channels they are into,” said chief marketing officer Carla Liuni.

The company highlighted estimates from Bain and Altagamma that Gen Z and Millennial consumers are projected to account for a 60 percent share of global consumption of luxury goods by 2026, compared with 39 percent in 2019.

With this in mind, Pandora believes the Me franchise has the potential to become a new pillar, offering opportunity beyond the key Pandora Moments business, built around its collectible charms, which accounts for around 70 percent of its sales.

There is also the Pandora Brilliance lab-manufactured diamond product line, being piloted in the U.K. since May, for which the company has yet to decide on a global rollout, it said.

In order to build loyalty and improve personalized services, the company will build on learnings from its digital hub implemented in Copenhagen last year, using AI to deliver tailored communications to consumers and improving its consumer-facing interfaces online. It has already made progress here. “Our conversion rate in the last two weeks has more than doubled since 2019,” said David Walmsley, chief digital and technology officer.

A new global loyalty program will be introduced next year, following the introduction of a local scheme in China this spring, as well as clienteling services via WeChat that allow in-store staff to connect with their customers directly. “It’s a great learning base for the global platform that we’re looking at launching in 2022,” Walmsley said.

A new store concept is in the works, with three units set for the final quarter of the year and several for the first quarter of next year, with a first-wave of openings in China and Europe before an introduction in the U.S. In total, between 100 and 150 boutiques under the new concept are planned for the next two years. These are designed to meld digital and physical elements, for example by giving store associates access to customer preferences when they enter a store.

Another key element of the Phoenix plan is to increase manufacturing capacity by around 60 percent, investing 1 billion Danish kronor, or $158.7 million at current exchange, to secure future supply.

The majority of the new capacity will come from a facility to be built in Vietnam, for which the firm is in the process of selecting a site, to be confirmed early next year. The first part of the new plant is scheduled to come online in late 2024, and the plan is for it to produce 60 million pieces annually from 2026 onward. The remaining capacity extension will come from the firm’s existing facilities, in Thailand.

The new program also involves a range of sustainability initiatives Pandora trumpeted as “the most ambitious in the jewelry industry to date.” The company has committed to halving its greenhouse gas emissions from a 2019 baseline across its own operations and value chain by 2030, and intends to become a net zero carbon company by 2040.

Among further announcements, the company said it would increase its share buyback program, announced on Aug. 17, to repurchase shares for an aggregate maximum amount of 3.5 billion Danish kronor, or $555.2 million, compared with the previously announced 0.5 billion Danish kronor, or $79.3 million. The move is intended to increase cash distribution to shareholders, and will be completed by Feb. 4, 2022.

Technology and Operations Management

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PANDORA WINNING MODEL

To become the world’s most loved jewelry brand…

Pandora is one of the most successful stories of the past decade in jewelry [1] and this success can be explained by their strategy and operating model to grow up to this point. The company’s vision is ambitious and, as highlighted by Deutsche Bank, needs attentions to keep delivering today’s results. I would like to focus on the aspects that contributed to reach today’s baseline.

BUSINESS MODEL

In 2014, PANDORA’s total revenue was DKK 11.9 billion [2] . The company is headquartered in Denmark and started as a family business in 1982. Now it is publicly listed in NASDAQ Copenhagen stock exchange.

Value Proposition: PANDORA designs, manufactures and markets hand-finished and contemporary jewelry made from high-quality materials at affordable prices [2] . Their product portfolio offers women around the world the opportunity for personal expression by focusing in charms/bracelet (core business), rings, earrings and necklace categories. Their main products are made of silver. Their DNA is defined by: affordable luxury, personal storytelling and contemporary design [3] . PANDORA business model up to now, was a top-line growth, designated to maximize return on capital employed [2] .

Pathways to Just Digital Future

OPERATING MODEL

PANDORA’s business model is vertically integrated. PANDORA control the entire value chain: design, production, distribution and sales. This model allows PANDORA to benefit from scalability and flexibility, maintain a clear and complete overview of operations, and develop products and activities to match changing market needs [3] .

To deliver its DNA, PANDORA provide a high-quality consumer experience through materials and craftsmanship, stores environment and global audience. This is possible because of:

Manufacturing facilities/Labor and quality

Every piece produced by the company is hand-finished by experienced and skilled craftspeople [3] . More than 70% of their employees are located in Thailand, their manufacturing site [2] . According to PANDORA, to produce 91 million jewelry in 2014, they combined a standardized and scalable modern production techniques with centuries old craftsmanship [3] . Because PANDORA craftsman pieces rely on a labor intensive production it is crucial that they be installed in a country with lower wages such as Thailand. Also, the country’s tradition with silver also facilitated manufacturing know-how.

Because PANDORA is in the affordable jewelry business and because of the vertically integrated supply chain, volume purchases of commodities gives PANDORA a cost advantage and operational leverage. PANDORA also receives returns that are melted down to produce faster-moving and more productive inventory. Deustche Bank estimates that “re-melting fashion jewelry products could cost up to 5% of the product price, which is irrelevant when compared to the dilution that would derive from aggressive discounting and clearing of inventory”.

PANDORA is sold in more than 90 countries through approximately 9,500 points of sale, including more than 1,600 concept stores [1] . They became one of the largest distribution presences worldwide for a jewelry brand [1] . This was possible given their expanding structure of low capital intensity through wholesale. PANDORA operates through retail, franchisee model and also owned and operated branded stores [3] . For the past few years, PANDORA focused in gradually improving the branded sales versus unbranded wholesale point of sales [1] . They also worked in re-balancing their unbranded stores to a more healthy balance and design their concept store [1] .

IT development

In 2012, PANDORA developed an in-house data system that enable them to monitor sales-out to end-customers on a daily basis at the SKU level. The system is working for PANDORA Concept stores and expanding to other stores. Because the company is vertically integrated, PANDORA can quickly use this system to be more consumer oriented and to be more efficient: product portfolio, inventory management, production and distribution can be adjusted to match consumer demand. This full integration is the key element of success of PANDORA [1] . Accordingly to PANDORA annual report, they “continually gather and analyze data from different parts of the value chain to ensure our organization remains efficient”.

The development of new products and new categories is also important to sustain sales momentum (top-line growth). PANDORA established a target of seven annual product launches to the stores. This allow stores to have new products assortments to cover events and drive traffic even in low peak periods. New products and categories helps the company to diversify the purchasing portfolio and attract more customers even when their sales became saturated.

[1] 27 July 2015, Initiation of Coverage from Deutsche Bank Market Research in 2015

[2] 6 December 2015, http://www.pandora.net/

[3] 2014, PANDORA Annual Report 2014, http://investor.en.pandora.net/

Student comments on PANDORA WINNING MODEL

Thanks for the interesting posting, Pandora is one of my favorite jewelry brand! It is interesting to know that the manufacturing facilities are outside of Europe and more than 70% of employees are located in Thailand. Because of its origin and brand image, I always thought it was made in Sweden or somewhere in Europe. Although I understand that they are putting efforts on standarization and modern production techniques, I still think one of Pandora’s competitive edge is the innovative, creative quality of the product. How does Pandora put effort to maintain this quailty? (e.i. manage the quality of craftmanship?)

Ajung, I searched a lot about how they keep their quality, but couldn’t find any substantial information about it. I’m guessing they are keeping it a secret. I found a interesting video on youtube about their manufacturing process. All hand finished jewellery.. ( https://www.youtube.com/watch?v=onFPhphf_yY&list=PLze-PWxh3GmmItV4uIvgANfSfpl9TBB7Q )

Very interesting post Fernanda,

So interesting that I have few follow-up questions for you: 1) I really appreciated the point about the crucial importance of picking the right location for production (tradition, expertise, low cost…) and very much appreciate the idea of re-melting unsold inventories – however could you please, maybe provide some more insight on the consequences of the ongoing country’s development (probably leading to increased wages ) and the potential threat it might represent for the medium term sustainability of their business model. (Difficult to relocate ? Higher production costs? …)

2) Do you by any chance have some insights on their procurement and/ or logistics system? Indeed it feels like they rely on a single metal, which is an important part of the value of the good, however having production located in Thailand, though Thailand isn’t a major producer of Silver, and having end-consumer spread around the globe must represent quite a challenge in terms of costs containment. In addition they must be highly sensitive to any variation in raw material supply/ price – do you know if this is hedged and / or could represent a competitive advantage / threat?

3) Finally I have the feeling the model heavily relies on one main product: i.e lucky charms silver bracelet, if so what are the real growth opportunities for the group ? (assuming, maybe falsely, that new products ranges are more incremental) – Do you see any major development areas they could envisage (e.g new metal…non-jewelry types of silver products…) or is the overall model capped from your perspective?

Many thanks again, very interesting

Hey Naomi, 1) Yes, this is a risk. But in 2014 their gross margin was of 70%. And from their annual report my estimation is that only 3% of their COGS is due to labor cost. So the commodities are more relevant to this analysis than labor. 2) I guess Thailand is a good choice because of labor skills than actual silver production. For silver though, Pandora can probably buy from “relative” close countries – Australia, China, India.. (I didn’t find the exact location from where they buy their silver). They also have benefited from a low silver price (past 10 years). But of course, Pandora is highly affected by this raw material’s price fluctuation and this will affect their margins. 3) I believe than definitely need to diversify their portfolio. I mentioned a few examples on Yasmin’s posts. Regarding their expansion opportunities with current categories, charms sales grew 26% in the past 5 years. According to Deutsche Bank, a few markets are becoming saturated (like USA) but they still have space to grow like Europe and Asia.

Thanks for the interesting post and detailed discussion on the benefits of a vertically integrated model. I’d be interested to hear what their competitors are doing and why no one else has moved into or been as successful in the “affordable luxury” jewelry segment. Perhaps it’s their continual design process and the unique charms that build on each other and more or less forces customers to keep buying PANDORA for their jewelry?

Thanks so much — great post and enjoyed reading about this! I was thinking about how the “Charm” bracelets provide an avenue for recurring purchases from customers at Tiffany’s. Do you have a view on whether this is the case at Pandora as well? It’s a great product to receive as a gift or buy for one’s self, but also very enjoyable to plan to purchase further charms.

That being said, I wonder if the brand will be challenged since “Charmed” bracelets may have lost their popularity in the past years and the Pandora brand is so tightly affiliated with this particular look.

Yasmin, One of the opportunities for the increase growth of Pandora is actually diversify their portfolio (so they will became less dependent of the charms). And they started investing already: other bracelet styles, earrings and necklaces. Also bringing new materials such as gold and their “pandora rose”. The charm market is a risk because can go out of fashion and also don’t offer good price elasticity.

To compete to Tiffany’s directly, I believe Pandora will need to invest in diamonds (I believe Pandora launched 2 rings with tiny diamonds on it, and no more). Deutsche Bank’s initial coverage suggests that Pandora’s key competitor today is Signet (Kay Jewelers and others), because they are a more “midrange jewelry market” and they highlight the fact that they prefer “diamond vs. charms”. They also mention Tiffany as an interesting peer, but more for a benchmark approach since they have different positioning and target costumer.

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Good company » the leap, pandora jewelry’s comeback plan bets big on bold brand revamp.

Chief marketing officer Charisse Hughes shares how the global retailer’s new ‘Expressions Store’ encapsulates its brand revamp, strategic shift and relaunch in the U.S. market.

Jewelry retailer Pandora is banking on a bold brand revamp to restore luster to business and revive sales.

The makeover is playing out in its new store concept, dubbed, the “ Expressions Store ,” where shoppers customize jewelry at engraving stations, and “treasure tables” highlight new designs, influencer-inspired fare and best sellers — all in a bid to create an immersive, personalized and emotionally resonant shopping experience, and woo millennials, too, Charisse Hughes, chief marketing officer for Pandora Americas, told CO—.

The store in New Jersey’s Garden State Plaza mall marks the official relaunch of the Copenhagen-based company in the U.S., the biggest market for the global brand that’s sold in 100 countries via 2,700 stores and 7,500 points of sale.

The Expressions store, elements of which were tested in a pilot store in Leicester, U.K., is a key facet of Pandora’s worldwide brand relaunch this year, which introduced a new visual identity and redesigned logo, along with new merchandise and product collaborations with brands like Disney .

The rebranding comes as Pandora, known for its charm jewelry, works to get its groove back to counter a sales shortfall among brand devotees, just as nimble direct-to-consumer newbies entered the market, Hughes said.

Indeed, founder-led brands like Kendra Scott to Annoushka have stepped into the jewelry spotlight, picking up market share along the way.

“We grew like a rocket ship, and were enjoying and basking in growth,” she said. As a result, “we took our eye off the ball regarding the consumer and what she wanted. We have loyal fans that engage with us, but then, in 2018, saw like-for-like growth flatten and eventually slide into negative territory,” she said. “We weren’t as attractive to our existing or new consumer.”

At the end off the day, Hughes said, “more brands are competing for share of mind, voice and heart.” That’s why it’s a critical time to “define more clearly what our brand is, who we want to be and how we want consumers to view us,” she said. “Consumer habits have changed. We have to make sure we’re connected [to them].”

Being able to curate for the consumer is so important nowadays. We need to be able to translate what they’re experiencing online from the comfort of their home, in store.

Charisse Hughes, chief marketing officer, Pandora Americas

Pandora is revamping its brand to ensure that it stays consistently relevant throughout its target customers' life cycles. Read on for ways your business can stay on top of consumer trends.

Changed they have. For shoppers who can get everything and anything online, merchandise alone has become increasingly commoditized. “They have a lot more options,” Hughes said.

As a result, “consumers are totally accustomed to insane levels of data-fueled personalization,” according to a report from trend forecasting firm Trendwatching . “Now, they’re going to come to expect the same from the physical spaces they inhabit.” It’s forced retailers to create store environments that are “sentient spaces” to woo consumers drawn to physical spaces that “recognize and react to them, providing a personalized experience.”

‘Giving voice to people’s loves’

For Pandora to make that happen, love is the answer, Hughes says.

Stoking a rebirth is about tapping into the brand’s essence, which is “highly emotional and positive, representing the love, passions and places in people’s lives,” with jewelry designed to capture those memories, she said. “We are a brand about giving voice to people’s love.”

While that revival plan might sound more kumbaya-ish than strategic, Hughes says it’s just what’s needed to boost Pandora’s relevance to consumers throughout their purchasing life cycle and drive business, too. “A lot of different approaches are being taken to connect with consumers. We want to make sure we have a brand that has a life cycle with consumers that’s relevant throughout their life cycle as opposed to in and out of it,” she said.

Hughes admits that’s a bit of a juggling act. “Because we are one of the biggest jewelry companies in the world, we have to do a lot of things well and speak to different consumers with different messaging.”

For Pandora, whose demographic skews older, the road to newfound resonance is paved with stores that stoke discovery, showcase fresh design aesthetics and reflect the sensibilities of millennials and Generation Z.

To that end, it’s partnering with influencers like "Stranger Things" actor and activist Millie Bobby Brown to usher in the next generation of Pandora jewelry “to connect more closely with consumers as well as align our value and style set with these influencers,” she said. “A key aspect of that relationship is about relevance.” Brown is the face of the retailer’s Pandora Me collection, “a young phenomenal [voice] that’s so vocal about women’s empowerment,” Hughes said. “We’re encouraging young people to have a voice. We’re trying to embody their values and remain relevant.”

With Pandora Muses , for example, its global collective of women, including models and activists Georgia May Jagger and Halima Aden and artist Tasya van Ree, who the company says reflect the values it stands for, such as diversity and social responsibility, “Pandora has joined the topic of empowering women of all backgrounds,” Jane Hali, CEO of Jane Hali & Associates , in a research note.

Although late to the party, tapping data to highlight best sellers

Merchandising is both an art and a science with retailers increasingly relying on the latter.

They’re leveraging technology to go beyond gut hunches on what products will sell, translating data from shoppers’ digital and physical footprints into actionable insights to fuel business — but Pandora was lagging here, Hughes said. “We were not mining those insights as aggressively as we should have to understand the consumers’ behavior, affinities and purchase patterns, and how [best to] use all that.”

That’s now changed, she said, evidenced by the Expression store’s treasure table, for one, which features Pandora’s best-selling products — like its Timeless Elegance rings in silver and Pandora Rose and new O pendant — which is a first for the brand.

The tables showcase an edited mix of customer favorites, mimicking a signature online shopping feature. “We see it in e-commerce,” Hughes said. “Being able to curate for the consumer is so important nowadays. We need to be able to translate what they’re experiencing online from the comfort of their home, in store.”

Tell me a (personal) story

Also important is creating physical experiences that give shoppers a compelling reason to leave home, amid declining store traffic. The reality is that you don’t have to go to stores anymore, Hughes said.

Pandora, she says, is doing just that with a new commitment to “storytelling.” Treasure tables tell a holistic style story of an entire jewelry collection, from newness to classics, rather than a single item like a charm, ring or an earring. Influencers present the meaning behind the items that appeal to their passions.

At new engraving stations, shoppers can customize jewelry with initials and dates, which tell their story or the story of a giftee. To breathe new life into its charm business, a new touchy-feely Charm Bar encourages shoppers to flex their design muscles and indulge their creative impulses by mixing and matching bracelets and charms.

“Personalization is key at retail today and the model of bracelets and necklaces being personalized with charms makes sense,” Hali said, in the research note, adding that 70% of Pandora’s business is in bracelets and charms.

And in time for the holidays, the Gifting Wall presents curated and ready-to-gift sets that are arranged by gifting profiles, as well as display sets themed according to life’s special occasions like birthdays, anniversaries, even “gratitude.” The idea is to “connect with consumers on a personal level,” Hughes said. “They can tap into and express who they are.”

The new store design will roll out to locations in the U.S., U.K., Italy and China.

As a “total jewelry universe,” Hughes says, “We are trying to remind people of what Pandora can mean and carve out a space in their lives.”

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SWOT Analysis of Pandora Jewelry

March 9, 2019 | By Hitesh Bhasin | Filed Under: SWOT of Brands

Pandora A/S is a Danish jewelry company which specializes in the design, creation, and distribution of jewelry. Jewelry is sold by Pandora under five main categories like charms and bracelets, earrings, rings, watches, and necklaces and pendants. In addition to this, the company also sells various other trinkets as well. The jewelry is manufactured using gold, silver, leather, and textile, as raw materials.

Pandora has a market across countries across the globe and their distribution is done through points of sale, concept stores operated by partners or third parties, shop-in-shops, gold and silver jewelry store retail stores , as well as non branded boutiques. In addition to Europe, the company sells its products in the Middle East, Africa, North America, South and Central America and the Asia Pacific.

The company which was set up as a jewelry store by a family currently has pan world operations and has a revenue of DKK 20.81 billion.

Table of Contents

Strengths in the SWOT analysis of Pandora Jewelry

Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Pandora Jewelry :

• Setting trends: The key reason for the success of Pandora Jewelry is the manner in which it has been able to set trends and fads than follow them. Be its the signature charm bracelet in the US or the personalized jewelry in Canada Pandora has always been a trendsetter.
• Global presence: Pandora Jewelry which started off a single store in Copenhagen, Denmark as a family owned business now owns around 10,000 stores across the globe I around 70 countries. The steep growth curve of Pandora Jewelry started off in 2003 with the entry into the US. Pandora sells one piece of jewelry every second making it the most sold brand in the world.
• End to end control: Pandora Jewelry sells personalized jewelry and in order to do this the company needs the end to end control of its operations. Pandora Jewelry has integrated backward vertically and now it controls in-house design, manufacturing, global marketing and direct selling . Pandora has spent more than two decades crafting the strategy and its business model with the vision to create the best quality, personalized jewelry available to customers across the world.
• Repositioning of jewelry: Jewelry was considered to be expensive and people were not willing to invest as much in jewelry as they would in other high ticket items. However, Pandora repositioned jewelry making it affordable to all and creating personalized trinkets that were linked emotionally to the customer through unforgettable memories.
• Right distribution strategy: Pandora has often revamped its distribution strategy in accordance with the region of operation. For example in Canada, it has spotted all top malls and set up stores in all these malls. In addition to that this across the globe the distribution strategies followed include points of sale, concept stores operated by partners or third parties, shop-in-shops, gold and silver jewelry store retail stores, as well as non branded boutiques.
• Franchisee Training: The franchisees of Pandora Jewelry are given a lot of freedom in their operations but the company ensures that they go through a stringent training procedure. Their training ensures that partners are competent in all aspects of the operations, merchandising , product development, performance metrics, real estate, and distribution.

Weaknesses in the SWOT analysis of Pandora Jewelry

Weaknesses are used to refer to areas where the business or the brand needs improvement.   Some of the key weaknesses of Pandora Jewelry  are:

• Excessive focus on jewelry: Pandora Jewelry has been focusing entirely on jewelry and while the opportunities are growing in other domains such as clothing, accessories or textile. This focus will result in the company being unable to sustain in the long run.
• Poor communication strategy : In this age of advertising Pandora has not been able to maintain or develop a clear communications strategy. The poor advertising effectiveness of the company has resulted in reduced visibility for the brand with the result that other stronger brands have taken over.
• Poor planning : Though operationally the company was doing good, the company had to consecutively increase their prices in order to supplement the poor margins. In addition to this, they also had to continuously re-engineer their products in order to satisfy their upmarket customers.

Opportunities in the SWOT analysis of Pandora Jewelry

Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:

• Changing customer preferences: People are choosing to spend more and more time on shopping as the disposable income has increased. The popularity of online shopping store has created a new channel for retailers. There are also various new categories in jewelry like antique, gem, handcrafted etc. All these present a host of opportunities to Pandora.

Threats in the SWOT analysis of Pandora Jewelry

Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:

• Competition The main competitors of Pandora are Chamilia, Chopard, and Mouawad.

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About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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Pandora Jewelry Soars on New Makeover Plan

Pandora A/S (NASDAQOTH: PANDY) has been in the doldrums for the better part of two and a half years. After peaking at over 1,000 Danish kroner in 2016, the stock hit an unsightly 254 kroner per share just recently -- a stunning 75% decline for the world's most recognized jewelry brand. (The exchange rate on Feb. 13 is $1 = 6.60 Danish kroner.)

The company's recently reported fourth-quarter results reflected the deterioration. While revenue grew 3%, that was entirely due to store expansion and the acquisition of franchisees. Like-for-like sales fell an unsightly 7%, and Q4 EBITDA margins shrank from 40.1% to 35.7% last quarter.

Former CEO Anders Colding Friis was ousted last summer , and the current leadership consists of new CFO Anders Boyers and new COO Jeremy Schwartz. That duo just unveiled a detailed, comprehensive two-year plan called Programme Now to get Pandora back on track. Apparently, shareholders were encouraged, as the stock rallied 17% the next day. Here's management's prescription.

Four key pillars

At a very high level, Pandora's turnaround plan rests on four key pillars: 1) a commercial reset, 2) reigniting passion for the brand, 3) reducing costs, and 4) implementing new ways of working.

These pillars aim to correct the errors of previous management, which overemphasized aggressive growth at all costs. The new plan calls for pulling back on store openings to focus on stabilizing the brand and reigniting same-store sales .

A commercial reset

Investors can think of the "commercial reset" pillar as ripping off a proverbial Band-Aid, correcting for two sins of prior management: overly aggressive sell-ins to franchisees and too many promotions.

Over the past couple of years, Pandora aggressively sold inventory into franchise stores, a move that would bump up revenue in the short term. However, Pandora is now paying the price, having to take back significant unsold inventory, which led to ugly numbers this year .

The current team believes it can reduce sell-in packages to franchisees from eight weeks to four weeks of inventory. While the program should help reduce the amount of slow-moving items in franchise stores, the initiative will have a near-term negative 1% impact on 2019 sales.

Perhaps more importantly, Pandora will reduce aggressive promotions. While the company will still have promotions around major holidays and limited editions, reduced promotions between major events should lower revenue by between 2% and 4% in 2019. However, Schwartz and Boyers believe the reduced promotions are the right thing to do to preserve Pandora's long-term brand value.

Reinvigorating the brand

In conjunction with lower discounts, the company also hopes to reinvigorate Pandora's brand promise. This is perhaps the most important feature of management's new program, as brand marketing is the most relevant element to reigniting sales growth. Investors will have to wait, however, as management is planning to launch most new marketing initiatives in Q4 2019, the holiday quarter.

The plan features a new type of marketing communications strategy, which will be paired with a "digital-first Rewards system of the future," to encourage regular charm purchases and collecting. This seems smart, as Pandora's charms -- which make up over half of its sales -- lend themselves particularly well to a sticky rewards program.

In fact, it's surprising the company has been so slow-moving to implement such a program. Not only would a rewards program spur recurring charm purchases, but it would also give the company better customer data to help with new charm designs and targeted marketing.

Reducing costs

The new management team is also taking a hard look at costs. Despite many cost-cutting efforts already completed over the past year, Boyers and Schwartz believe there's still a sizable cost-reduction opportunity of 1.2 billion Danish kroner, or 5% of sales. These cuts won't come predominantly from any one category, but rather comprise several smaller savings wrung out across costs of goods, IT, and administrative expenses.

New ways of working

Finally, Boyers and Schwartz unveiled how the company will function differently, especially from a personnel standpoint. Chief Creative Officer Stephen Fairchild will now also be responsible for Pandora's global brand expression. The intention behind the combined role is to better unify the company's product design with external branding and product launches. The company is also looking to hire a chief merchandising officer, to better coordinate product, manufacturing, and finance.

In addition, Pandora will be changing both employee and franchisee incentive agreements to better align them with shareholder value creation.

Taking its medicine

Sometimes companies need to insert new management to make the hard choices prior leadership was unwilling to make. Pandora's efforts to reinvigorate its brand, while correcting the short-termism, of prior management is absolutely the right thing to do. Whether the company finds success will depend on execution, though at a price of just seven times earnings , the bar for the stock is set fairly low.

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Pandora brand profile in the United States 2024

Pandora brand awareness, usage, popularity, loyalty, and buzz among jewelry owners in the united states in 2024.

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888 respondents

18-64 years

respondents who own jewelry

During the survey, the questions were phrased as follows: Brand Awareness : "Do you know this brand, even if only by name?" Brand popularity : "When it comes to jewelry, which of the following brands do you like?" Brand usage : "When it comes to jewelry, which of the following brands do you own currently?" Brand loyalty : "When it comes to jewelry, which of the following brands are you likely to purchase again in the future?" Brand buzz : "Which of the following brands have you noticed in the media, on social media, or in advertising in the past 3 months?"

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Statistics on " Jewelry market in the U.S. "

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• Basic Statistic Signet Jewelers' sales worldwide 2024, by operating segment
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• Premium Statistic Breakdown of jewelry sales value from the LMVH group 2015-2023, by region
• Basic Statistic Revenue of Pandora A/S U.S. 2016-2023
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Shopping behavior

• Basic Statistic Leading habits among jewelry and watch shoppers in the United States 2022
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• Premium Statistic Mother's Day average expenditure per person on jewelry in the U.S. 2009-2024
• Premium Statistic U.S. Valentine's Day planned per person spending on jewelry 2010-2022
• Premium Statistic Holiday gifts most likely to be given to wives by their partners in the U.S. in 2021
• Premium Statistic Favorite gifts to get for Valentine's Day in the U.S. 2021

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