Pandora expands lab-grown diamond business and international footprint

Set to be announced during the company’s earnings call on August 15, the lab-grown diamond expansion will come via three new collections. There’s Pandora Nova, made up of jewelry featuring princess cut stones and a proprietary four-prong setting; Pandora Era, offering reinterpretations of classic styles; and Pandora Talisman, with five pendant designs inspired by the brand’s bracelet charm jewelry.  They’ll launch on August 29 on Pandora’s e-commerce site, before rolling out to more than 700 Pandora stores across the U.S., Canada, the U.K. and Australia starting on August 31. By the end of October, select collections will also launch in Mexico and Brazil — the full assortment will be made available in those markets in the first quarter of 2024. The collections’ prices start at $290. 

“A year ago, we were first able to offer the dream of quality diamonds to our fans who never had access to them due to the price. What was missing from that first effort was breadth; we had released a single Infinity [ring] design,” said Luciano Rodembusch, president of North America for Pandora.

The brand declined to share what percentage of its sales comes from diamonds. In addition to diamond jewelry, the brand sells necklaces, bracelets, charms and rings in a variety of materials.

Each of the new collections features an excellent-grade cut and near colorless, VS+ clarity lab-grown diamonds, meaning they have very small inclusions. They’re available in 0.15 to 1-carat weights and set in recycled 14-karat white gold, 14-karat yellow gold or sterling silver.  On August 29, they’ll be introduced to consumers in an out-of-home and in-store campaign featuring a cast of cultural icons, as well as in a social media campaign.

“Lab-grown diamonds are still not the largest portion of the diamond market, but it’s the fastest growing,” said Rodembusch. According to the Research and Markets, the global lab-grown diamond market was valued at $22.45 billion in 2022. It’s forecasted to grow to $37.32 billion by 2028, or 10% of the global diamond market. Pandora started phasing out natural diamonds in 2021, while working toward sustainability targets amid issues around diamond supply chains and forced labor. 

Since launching in August 2022, Pandora’s lab-grown diamonds have been grown, cut and polished using 100% renewable energy. In addition, its settings have strictly been made from recycled metals. The brand aims to use only recycled gold and silver by 2025 — currently, this is being supplied by two precious metals refiners in Europe. The carbon footprint of a Pandora lab-grown diamond is around 95% lower than that of a mined diamond of the same size, according to the brand.

In March, Pandora released a sustainability-linked bond offering to its investors, risking a bigger payout to investors if it fails to meet its stated goals. The program centers on Pandora’s sustainability performance, when it comes to greenhouse gas emission reductions and the procurement of recycled silver and gold. 

“From a circularity standpoint, when you reuse metal and are not pulling directly out of the ground, you have a much lower carbon impact,” said Marissa Saretsky, vp of sustainability and communications. “We ended up with a product where a 1-carat diamond ring in a recycled gold setting has a carbon footprint similar to a pair of jeans.” 

As Pandora introduces its lab-grown diamonds to shoppers in Australia, Mexico and Brazil, it will also start offering them in all of its stores in North America. The initial collection was offered in the U.K., the U.S. and Canada, but only in select stores. 

“We have put together a very strong campaign behind breaking the rules of diamonds,” said Rodembusch. “Over the years, the industry has created so many rules that you need to spend [a certain] amount. We don’t believe that. Everyone deserves and can have their own diamond.”

In the 1940s, diamond brand DeBeers partnered with the advertising agency N.W. Ayer on its now famous “A diamond is forever” slogan. The advertising stated that an engagement ring should, therefore, cost 1-2 months’ salary. DeBeers’ 1980s ads said things like, “Isn’t two months’ salary a small price to pay for something that lasts forever?”

Other diamond companies have also launched lab-grown diamond collections, as the market has heated up and customer attitudes toward the option have changed. While Brilliant Earth launched lab-grown diamonds in 2012, Helzberg Diamonds, a Missouri-based company, launched them  in 2017. Blue Nile and Vrai have now done the same.

Pandora opened around 40 new stores in the U.S. in 2022 and will open another 40 this year. “We are seeing very good results across the country,” said Rodembusch. The brand raised its guidance for the second time this year in its Q2 results from August 15. The company reported organic growth of 5% during the second quarter and sales worth 5.89 billion Danish kroner, or $864 million, over the three months ending June 30, bringing the company’s revenues for the first half of this year to 11.75 billion Danish kroner, or $1.72 billion. It’s reportedly experienced declines in consumer spending amid inflation and rising interest rates.

“We’re especially [expanding] on the West Coast, and especially in California. We are also remodeling some of our stores with a new store concept and new collections, and providing additional training for our 5,000 store associates.” That includes training on diamonds’ four Cs.

“The working class [shopper] is our most common. But what we’ve learned from store and social listening is that their budget changes depending on the occasion,” said Rodembusch. “A Valentine’s Day gift has a different budget than Mother’s Day or another big milestone. … So we offer pieces for $30-$5,000.” 

In the year ahead, Pandora plans to introduce product collaborations, further expand its diamond collection and launch pearls for the first time. It will also announce a new engraving service, offered in-store and online, in the months ahead.