REPORT …Pandora has increased its forecast for the full year amid strong U.S. and online demand in early 2021.
The Danish jeweler now expects its revenue for the year to increase by more than 12% from 2020, adjusted from its initial forecast of more than 8%, he said on Tuesday.
The upgrade is “driven by US stimulus packages, as well as stronger underlying performance,” the company noted.
Revenue increased 8% year-on-year to DKK 4.5 billion ($ 725.7 million) in the first quarter, as sales in the United States jumped 64% in local currency to 1.39 billion DKK ($ 224.3 million). Profit was DKK 628 million ($ 101.3 million), compared to a loss of DKK 24 million ($ 3.9 million) the previous year. Online sales increased 136% compared to the same period of 2020 and more than 200% compared to 2019.
However, Covid-19 still creates uncertainty, Pandora warned. The new forecast assumes that 20-25% of stores will be closed in the first half of 2021 and 5-10% in the second half, the company added.
At the same time, the distributor intends to reposition its activity in China after an “unsatisfactory” performance in the first quarter, he explained. Although the country’s revenue grew 35% year-on-year to DKK 281 million ($ 45.3 million), it only accounted for 6% of global sales during the period.
âThe central problem in China is that Pandora is seen as a mainstream jewelry brand,â management noted. âConsumers’ perception needs to be changed to focus on the main strengths of the Pandora brand. “
Movement developed in the laboratory
The news comes alongside the group’s much-publicized launch of Pandora Brilliance, its first line of laboratory-grown diamond jewelry, which uses synthetics from Europe and North America. Pandora will also stop using mined diamonds – as part of a new business strategy called Phoenix that focuses on “untapped opportunities” in its core business, the jeweler said.
The company will launch the line in the UK from May 6, as the country is its second largest market and the Pandora brand is strong there, a company spokesperson said. Rapaport news Tuesday. The collection will debut in major global centers in 2022 once the jeweler evaluates its performance in UK stores, he explained.
This is the first time that diamonds of the natural or artificial variety will feature prominently in Pandora jewelry. The company used mined diamonds in around 50,000 of the 85 million pieces it created in 2020, the spokesperson said. She plans to incorporate synthetics more regularly in the future.
“[Lab-grown diamonds] correspond to the Pandora brand: to create desirable and affordable jewelry, âadded the spokesperson. âOur business has stabilized after two years of recovery. One of our goals now is to take Pandora’s central idea of ââself-expression and collection, and try to apply it in new product concepts. Pandora Brilliance is not a diversion from who we are, but rather an extension.
Image: A Pandora store in Shanghai, China. (Shutterstock)