Danish jewellery chain Pandora confident of bucking luxury slowdown

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Danish jewellery chain Pandora is increasingly optimistic ahead of the key Christmas season, bucking the trend of a sales slowdown among luxury goods groups.

Pandora, which markets itself as selling “accessible luxury” and is at the lower end of such retailers with high-street stores and cheaper items on sale, will end this year “in a growth position,” said chief executive Alexander Lacik.

He told the Financial Times: “We’re coming into the most important time of the year with strong momentum . . . When people have less money, you see a softening at the high end . . . We are still an accessible gift.”

A three-year boom in luxury goods spurred by the pandemic has come to an end in recent months as sales growth has slowed as customers reduce spending.

“Pandora is the only company in our coverage with growth accelerating quarter on quarter,” luxury goods analysts at Citi said after the Danish group published third-quarter results earlier this month.

The jeweller, which has launched lab-produced diamonds to compete with pricier luxury brands as well as its normal offering of bracelets and charms, increased its full-year sales guidance at the same time from 2-5 per cent organic growth to 5-6 per cent.

That implied that its organic sales growth in the fourth quarter — which includes the crucial Christmas trading period — would be 7 per cent, ahead of the consensus analyst forecast of 5.5 per cent, according to Citi.

Pandora is one of the world’s largest jewellers by volumes sold. Lacik said he expected the jewellery market globally this year to be “negative to slack, at best,” meaning the industry as a whole would see no growth.

In the third quarter, Pandora was helped by an increase in spending by “domestic tourists,” he added, as people stayed at home or travelled in their own country and used some of their savings to buy jewellery.

He added that the upgraded guidance for the full year showed Pandora’s optimism about Christmas.

“We have very strong brand momentum. There’s only two directions on a brand — you’re either growing or declining,” he added.

Pandora has invested in endorsements from celebrities such as Pamela Anderson, which has led to a big rise in searches on Google and TikTok, Lacik added, increasing its brand visibility as sales have grown in the US and Europe. “It’s not one silver bullet. All cylinders are firing,” Lacik added.

Shares in Pandora, which rose 10 per cent after its most recent results, have increased by two-thirds in the past year but are still just below their pandemic peak of November 2021.