If you look at what we sell and what part of the range is moving, they are very similar. There are no big shifts. A typical debate we have is ‘oh, this is a gold market, so we can’t do that here.’ Every market that Pandora entered was a gold market, but if you aspire to buy gold, it is much more expensive. Gold is 100 times the price of silver and so if you want to play affordably, you just can’t operate.
We have a bit of a gold range, but it’s small. We plat – that’s another technique that we can do and still keep at a reasonable price. It’s very popular all over the world.
Earrings as a category are much larger in the US than anywhere else in the world. Certain lines and collaborations, such as Harry Potter, have been very popular worldwide, while others have not. Star Wars sold well with a very niche customer, but then again they were super loyal.
Diamond consumption in the US is also much higher because of the culture around engagement. If you’re going to get engaged or married in the US, it should always be a diamond. That is not the case in Europe at all.
The street: How do inflation and supply chain disruption affect this industry?
We pay close attention to the price of silver. When interest rates rise, the price of silver falls to what is an odd positive point for us. Silver also has a very low melting point, so the amount of energy you need to shape jewelry is very low/
We air freight everything because the weight of the volume is small. So all the problems you had with the tenfold increase in container freight, we didn’t get much of that. There’s a little bit of freight, of course, that’s had an impact, but if you look at retail rent when the economy has been tough, they haven’t gone up. If anything, we tried to take them down or get some relief. Until now, personnel costs have also been more or less on historical averages.
With lab-made diamonds, we also focus on CO2 emissions. That is part of the global load that we have as a company. Our goal is to be CO2 neutral by 2040 and to eliminate half of all CO2 by 2030. Much of this must now come from working with recycled silver and gold.
The street: What is behind the decision to invest so heavily in physical locations?
Many analysts tell us, “Why don’t you close all your stores and go online alone?” And I say “we could, but it’s a really bad idea.” 60% of my clients are men who buy jewelry and, I’m sorry, they need help. I can safely say that. The other 40% are women who really like to touch and see if they liked the style. The other factor is that when you’re playing in the mass market, distribution and access to the brand is critical.
Our stores are not big and they don’t have a lot of stuff, but the people who come in are looking for that experience. That’s why I always say that the people who work in Pandora are not shop assistants, but salespeople.
I am a big believer in the physical aspect of what we do and in fact we want to expand our global presence in the coming years.