Danish jewellery chain Pandora has become more optimistic about the Christmas period, defying the trend among luxury goods companies of slowing sales.
Pandora, which sells “accessible luxury”, and is on the lower end among retailers, with its high-street shops and cheaper products for sale, will finish this year in a “growth position,” according to Alexander Lacik, chief executive.
He said: “We are entering the most important part of the year in a strong way. . . You can see that the price of high-end items softens when people have less income. . . “We are still a gift that is accessible.”
In recent months, a three-year boom of luxury goods spurred on by the pandemic has ended as sales growth has slowed due to customers’ reduced spending.
After the Danish group released its third-quarter results at the beginning of this month, Citi luxury goods analysts said that “Pandora was the only company we cover with growth that is accelerating from quarter to quarter.”
The jeweller has increased its sales forecast for the full year from 2-5 percent organic growth to 5-6 percent.
Citi said that this implied its organic growth for the fourth quarter, which includes the critical Christmas shopping period, would be 7 percent, which is ahead of the analyst consensus forecast of 5.5%.
Pandora is the largest jeweller in terms of volume sold. Lacik predicted that the global jewellery market would be “negative or slack at best” this year, meaning the industry will not grow.
He added that “domestic tourism” – people who stay at home or travel within their own country – helped Pandora increase its sales in the third quarter.
He said that Pandora’s optimism for Christmas is reflected in the revised guidance for the entire year.
“We are experiencing a very strong brand movement.” He added that there are only two ways to go with a brand – either you grow or decline.
Pandora invested in celebrity endorsements such as Pamela Anderson. This has led to an increase in searches on Google, TikTok and other search engines, Lacik said, and increased its brand’s visibility, as sales in the US and Europe have increased. “It is not a single silver bullet.” Lacik continued, “All cylinders are firing.”
The shares of Pandora have risen by two thirds over the last year, but remain just below their peak pandemic level in November 2021.