According to industry analyst Edahn Golan at Tenoris, the US jewelry market will grow by just 1.3% in 2024. This small growth was mainly driven by price increases, as actual sales volumes fell by 1.6%. Despite the stagnation, affordable luxury jewelry brand Pandora has managed to thrive, with same-store sales in the US increasing by 8% last year.
As Pandora’s largest market, the US accounts for 31% of the company’s total revenue. Organic sales in the US soared 14% to DKK 1.3 billion (DKK 9.709 billion). This growth was driven by the opening of 37 new concept stores and the acquisition of 36 partner-owned stores. Globally, Pandora’s sales also soared, with organic growth of DKK 134.4 billion (DKK 31.680 billion). The company added 236 new stores worldwide, including 137 concept stores and 99 shop-in-shops, and by the end of the year, its sales reached nearly 7,000 points of sale in owned, franchised and third-party stores.
While Pandora’s core charms and bracelets segment remains its largest revenue generator, accounting for 74% of sales, its expanded “Fuel with more” jewelry line, which includes lab-grown diamonds, experienced explosive growth, up 22% to $1.1 billion (DKK 8.149 billion).
Thriving in a challenging market
Pandora’s success in a stagnant market can be attributed to its strategic alignment with the traditional 4Ps of marketing (product, price, place and promotion), as well as its focus on the often-overlooked fifth P (people). CEO Alexander Lacik stressed that while these strategies are important, they are only part of the equation. While many competitors are relying heavily on discounts and promotions to drive sales amid a slowing market, Pandora is taking a different approach.
“This is the highest level of promotion I’ve ever seen in my six years at Pandora, and the industry has been facing negative sentiment over the past few years,” Lacik explained. “Many brands are struggling and resorting to deep discounting to hit sales targets. However, chasing volumes through discounting can lead to commoditization, which can undermine long-term growth.”
Rather than focusing solely on discounting, Pandora invested in brand building. This strategy has paid off, with the company being included in Interbrand’s 2024 list of the 100 Best Global Brands, alongside luxury giants such as Tiffany, Cartier, and Louis Vuitton.
Winning Strategy
Lacik attributes Pandora’s success to its “Phoenix Strategy.” This approach prioritizes brand image and customer relationships, even in challenging market conditions. “In any market, there are winners and losers,” said Lacik. “Brands that continue to invest in brand image and customer relationships emerge stronger. Our six consecutive quarters of double-digit growth prove that this strategy is working.”
By focusing on brand building and strategic expansion, Pandora has not only survived a stagnant market, but also positioned itself for continued growth in the years ahead.
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