Editor’s Note
This article discusses Pandora’s strategic pivot from silver to platinum jewelry, a move aimed at insulating the company from volatile commodity prices. The market has responded positively to this shift.
The jewelry manufacturer Pandora is changing its strategy and has opted to switch its production from silver to platinum jewelry, as it seeks to distance itself from the volatility of the white metal and thereby reduce its exposure to sharp market fluctuations. The price per ounce has been hit by the speculative wave of recent months, which drove the metal’s price to a historic high before falling abruptly. Shares of the Danish jeweler rose 5% on the stock market this Thursday following the announcement. The high price of silver had recently penalized its shares.
The new versions of Pandora’s best-selling charm bracelets will replace silver with a patented alloy base plated with platinum. Platinum trades at around $2,000 per ounce, well above silver, but Pandora will use less of it, which will lower the manufacturing cost of the final product and reduce pressure on margins.
Pandora, the world’s largest jewelry brand by sales, markets silver bracelets starting at $80 (€68) and has little room to raise prices, as customers tend to cut back on non-essential purchases.
The company reported on Wednesday a 4% organic revenue growth for the fourth quarter, in line with forecasts, but warned that this year’s revenue would increase by a maximum of 2%, and could even fall by 1%.
De Pablos-Barbier, who took office on January 1, appointed Philippa Newman, former executive at Michael Kors, as the new head of product. The CEO stated that “Pandora needs new designs to attract different customers.”
Pandora plans to convert at least 50% of its relevant silver assortment to platinum by 2027 and, ultimately, reduce the proportion of silver jewelry in its offering to 25%, de Pablos-Barbier stated.
Silver has experienced strong gains in the last 12 months, close to 162%, although it has fallen 8% during the past week. Geopolitical and market uncertainties, along with speculation, drove the price per ounce above $80, although it is now trading around $78, after reaching a record $121.64 last week.
