Pandora, breakthrough in materials: platinum instead of silver
Record high prices and extreme volatility are behind the turnaround of the Danish group, the world's leading jewellery brand by number of pieces sold. It is a new sign of erosion of demand, after silver substitution also started in solar panels
Demand for silver took a new blow with Pandora's decision to convert to platinum: a much more expensive metal, which will nevertheless save money, the company explained, as it will be able to use it in smaller quantities in the alloys with which it produces its popular bracelets and charms.
Pandora is the world's largest jewellery brand by sales volume and its flagship products, which are in an affordable price range, do not allow much flexibility on margins. The announcement of a gradual substitution of silver in its manufacture comes alongside other signs of demand erosion, which are also coming from the large Chinese solar panel manufacturers: in this case it is copper that has started to be used instead of silver, in reaction to unprecedented market conditions.
The price of silver quadrupled in the space of a year, to more than $121 an ounce last week, before entering a phase of extreme volatility, which still makes it very complicated to plan supplies. The metal - which plunged more than 15 per cent again on Thursday 5, falling back towards 74 dollars an ounce - is still worth twice as much as it was a year ago.
Platinum also plunged on Thursday, with declines of around 9 per cent bringing it back to around $2,040 an ounce. Last week it was at an all-time high above $2,900.
Also entering the whirlwind was the stock of Pandora, listed on the Copenhagen Stock Exchange, which has become very sensitive to the (now very violent) fluctuations in the price of silver. "We have to decouple the performance of the company and its shares from the raw material, we are a jewellery brand and not a silver trader," said Pandora's CEO Berta de Pablos-Barbier, who took office on 1 January, at a difficult time also due to a slowdown in sales concentrated mainly in the US.
