Lab-Grown Diamonds Help Pandora Turn Profit — Retail Bum

Pandora’s bet on lab-grown diamonds is starting to pay off with a notable increase in gross profit margin.

The Danish company’s customers today spend an average of $100 when making purchases. However, the brand’s efforts to position lab-grown diamond jewelry as an accessible luxury purchase are resonating well with customers, according to CEO Alexander Lacik.

“So for me, it’s Christmas every day when I make a transaction,” Lacik said, “because this comes on top of my existing business.”

While the focus on offering lab-grown diamonds is working to Pandora’s advantage, many of Pandora’s high-end competitors have not been successful in cashing in on the opportunity.

“The earnings model simply doesn’t work,” he said, adding that lab-grown diamonds are seen as a cheaper and less profitable commodity and down-market move. “This is the real reason why it’s an issue for them.”

Offering lab-grown alternatives is also helping Pandora move up in the category.

“So for me, it’s Christmas every day when I make a transaction,” Lacik said, “because this comes on top of my existing business.”

According to Bloomberg, the company currently offers lab-grown diamonds in the U.S., the U.K., and Australia. Later this year, it plans to make lab-grown diamonds available in Brazil and Mexico while expanding its business globally.

Photo credit: Pandora

Originally published at https://retailbum.com on September 21, 2023.