Pandora to Switch from Silver to Platinum Over Price Surge
Pandora, the renowned jewellery brand, has announced a significant shift in its production strategy, opting to replace silver with platinum-plating in select collections. This decision comes in response to a dramatic surge in silver prices, which have more than doubled in the past year alongside increases in gold and other precious metals.
The Shift from Silver to Platinum
– Reason for Change: Silver’s soaring prices and associated volatility have prompted Pandora to reduce its dependence on this metal. The company’s chief executive, Berta de Pablos-Barbier, explained that while silver will still constitute about 25% of the product line, the shift is necessary to mitigate financial risks.
– Use of Platinum: Although platinum is typically more expensive than silver, Pandora plans to create a unique alloy that will allow for cost-efficient production. Over time, segments of the silver range will transition to being platinum-plated using an in-house alloy named Evershine, which is currently utilized for their gold-plated products.
Consumer Trends and Market Response
– Perception of Platinum: According to jewellery historian Vivienne Becker, platinum carries an elitist image, contributing to a sense of luxury and exclusivity, regardless of whether it is an alloy. Consumers have been increasingly gravitating towards white metals as gold prices rise.
– Projected Rollout: The new platinum-plated range is set to debut in 2026, with plans for broader distribution thereafter. Initially, Pandora will collaborate with third-party sources for plating before transitioning these processes to its facilities in Thailand and Vietnam, aiming for full implementation by 2028.
Current Market Dynamics
– Pandora’s Silver Dependency: Currently, approximately 60% of Pandora’s offerings are crafted from silver. In remarks to CNBC, de Pablos-Barbier emphasized the necessity to decouple the company’s operations from fluctuating silver prices.
– Impact of Price Fluctuations: Despite recent drops, silver prices reached record levels in January and continue to remain high compared to last year. This surge in price has led to what the firm describes as a temporary impact on earnings.
– Broader Economic Context: The rise in precious metal prices is closely linked to investor behavior amid global geopolitical uncertainties and economic fluctuations. Silver is tied to global economic health, stated Danni Hewson, head of financial analysis at AJ Bell. Its demand is closely related to various industries, including electronics, medical equipment, and renewable energy, showing how economic conditions affect market dynamics.
In conclusion, Pandora’s strategic pivot from silver to platinum-plating underscores the brand’s proactive response to market volatility and changing consumer preferences. As the company navigates this transition, it remains committed to adapting its product offerings while maintaining the quality and prestige associated with its iconic charm bracelets.