Pandora Introduces Platinum-Plated Line to Mitigate Silver Market Risks

Pandora's Strategic Shift in Jewellery

By Helen Reid

Impact of Silver Market on Share Prices

LONDON, Feb 5 (Reuters) - Jewellery brand Pandora is introducing platinum-plated products to distance itself from the volatile silver market after a historic surge in the price of the precious metal over the past year, the company's new CEO said on Thursday.

Consumer Trends and Revenue Forecast

Pandora's share price has been highly sensitive to increasingly sharp moves in the silver market, with a plunge in the precious metal's price at the end of last week driving a surge in the stock.

Future Plans for Commodity Diversification

"We have to decouple the performance of the company and the share value from the commodity," Berta de Pablos-Barbier told Reuters in an interview. "We are a jewellery brand, we are not a silver trader."

The Danish company's shares gained 5% on Thursday after the announcement.

RETAINING PRECIOUS METAL ATTRACTION

Pandora, the world's biggest jewellery brand by number of products sold, sells silver charm bracelets starting at $80 and has limited room to raise prices as its target customers are cutting back on non-essentials.

It reported fourth-quarter organic revenue growth of 4% late on Wednesday, in line with analyst estimates, but warned revenue would grow a maximum of 2% this year, and at worst could decline 1%.

Store traffic, consumer sentiment and credit card spending in the U.S. are still not improving, de Pablos-Barbier said, having already warned last month of weak demand in the U.S., its biggest market, over the Christmas holiday gifting period.

Pandora's platinum-plated versions of its best-selling charm bracelets will be less costly to produce, but retain the precious metal allure for consumers, de Pablos-Barbier said. While platinum, at around $2,000 an ounce, is more expensive than silver, Pandora said the new products will be made using a trademarked metal alloy base.

Eventually the brand plans to reduce its reliance on any one commodity and shift its jewellery portfolio from nearly 60% silver to "maybe 20% in the end", de Pablos-Barbier, in the role since January 1, said. 

Pandora plans to shift at least 50% of its relevant silver assortment to platinum-plated in 2027.

Silver has been on a rollercoaster ride over the past week as speculators piled in and rushed out again. After hitting a record high of $121.64 last week, spot silver shed more than a quarter of its value a day later. It was trading at $74.94 an ounce on Thursday.

(Reporting by Helen Reid; Editing by Philippa Fletcher and Emelia Sithole-Matarise)