By Stine Jacobsen
COPENHAGEN (Reuters) – Danish jewelry maker Pandora plans to produce cutting-edge pieces to attract young buyers and dramatically increase sales in the United States and China to meet a 6-8% revenue growth target on 2021-2023, he announced on Tuesday.
The world’s largest jewelry maker in terms of production capacity said it is also targeting an operating profit margin of 25-27% in 2023 and has stepped up its pending share buyback, pushing its shares up by more than 4%.
Pandora has sought to refresh its image to appeal to the so-called “Gen Z” – people between the ages of six and 25 who, according to Bank of America, make up some 2.5 billion people who make up 32% of the population. world, followed by “Millennials” aged 25 to 40 to 22%.
“If you look at Gen Z and Millennials, by 2025 they are expected to make up over 60% of luxury consumption globally, so we need to sharpen our pens,” CEO Alexander Lacik told Reuters.
The company generates 70% of its sales from its Moment platform based on silver bracelets with collectable charms, but hopes to build a new pillar of growth with pieces aimed at younger people.
It will soon be launching more pieces in its Pandora Me collection, which has already been promoted by English actor and model Millie Bobby Brown, and is both cheaper and has a more raw look than conventional pieces with, for example, brooches. or safety chains.
Lacik took the helm in 2019 after the former CEO was ousted following several profit warnings and a lack of innovative new products.
An absolute priority for Lacik is to establish itself in China, the world’s largest jewelry market, where the penetration of its brand is still very low.
Pandora has announced plans to triple its revenue in China from 2019 levels and double its sales in the United States.
To meet demand, it will invest DKK 1 billion ($ 159 million) to increase its manufacturing capacity by around 60%, or 80 million jewels per year, by building a new factory in Vietnam and expanding its existing factories in Thailand.
($ 1 = 6.2947 Danish kroner)
(Reporting by Stine Jacobsen; editing by Louise Heavens, Jason Neely and Emelia Sithole-Matarise)