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
