Diamonds, it’s been said, are forever. That’s far too long for Pandora A/S, which is counting on women to update their jewelry boxes several times a year with charms crafted from silver, gold, and gemstones.
The Danish jeweler, which has gone from stock market darling to disaster to darling again since its 2010 initial public offering, is taking a page from fast-fashion retailers like Zara, which introduces designs as often as twice a week.
Pandora is now adding collections -- the latest features woodland nymphs and unicorns for fall -- seven times annually, up from twice last year. At the same time, Chief Executive Officer Allan Leighton is cutting prices and opening new stores.
“Freshness is very important, that’s a lesson we’ve learned,” Leighton, the former head of Wal-Mart Stores Inc.’s Asda supermarket chain in the U.K., said in a telephone interview. “People like newness.”
Pandora stock, which jumped 25 percent on its first day of trading then lost more than four-fifths of its value within a year, is up 79 percent since the start of 2013. The shares rose 4.9 percent to 222.30 Danish kroner ($39.51) at the close of trading in Copenhagen today, the steepest gain since May 14 and above the IPO price of 210 kroner.
Helped by new products such as a Mother’s Day bracelet and a Sydney Opera House charm, Pandora’s sales climbed 47 percent in the first half of 2013. The company has increased its full-year revenue forecast to a record 8 billion kroner, up from 6.65 billion kroner last year. The average of analyst estimates compiled by Bloomberg is for sales of 8.2 billion kroner.
Leighton, 60, expects Pandora to open about 175 outlets this year, bringing the total to more than 1,000. And Pandora’s average selling price per item declined to 129 kroner in 2012 from 134 kroner in 2011.
The CEO, who helped turn around Asda before selling it for $10.8 billion in 1999, is expanding production in Thailand and has introduced an online-only magazine. The latest issue features actress Zooey Deschanel on the cover and gives readers tips on combining Pandora jewelry with clothes from outlets such as H&M and Topshop.
The jeweler has also introduced cruises in the Caribbean that cost as much as $2,485 per week. Some 200 fans signed up last year for the second such trip, where they attended workshops, chatted about charms and shopped for jewelry while visiting St. Thomas and St. Maarten.
Pandora, founded by a Danish goldsmith and his wife in 1982, took the jewelry world by storm in 2000 with its update of the classic charm bracelet. An initial collection of 15 charms like strawberries, dice and ladybugs has expanded to around 700, including a royal baby charm this year to mark the birth of the future heir to the U.K. throne.
Collecting Pandora charms is “exciting and addictive,” said Leann Wu, who runs a jewelry blog called Charms Addict. “I thought I was going to stop after just one bracelet, but now I have many, many more.”
The charms have become an easy choice for men seeking to impress their partner with a birthday or anniversary gift.
“Pandora bracelets are perfect and I want one,” fan Sydney Bruno said on her Twitter feed. “They’re personalized and thoughtful and that’s the best kind of gift.”
Soeren Loentoft Hansen, an analyst at Sydbank A/S in Denmark, said that while it is risky to have success tied to one type of product, it is probably the right way to go for Pandora. The new collections and lower prices should help bring customers back to stores, he said.
“A company should do what they are best at,” Hansen said. “And they have a competitive advantage with these charm bracelets.”
Pandora’s enduring popularity is illustrated by the size of its fanbase. The Pandora Facebook account has more than 1.8 million followers and the company’s loyalty program has about 4 million members.
The fall offering, named Enchanted Forest, went on sale last week and features birds, leaves, owls, and other items intended to evoke autumnal woodlands. For the winter season, the jeweler has created a collection that includes a $45 mittens dangle and a $55 snowflake pendant that will hit stores Nov. 4.
“We are still sometimes inconsistent,” CEO Leighton said. “But the most important thing is we are absolutely moving in the right direction.”