Diamond jewelry makes for luxurious and stylish accessories, but its lofty price tag makes it unattainable for many fashion-forward consumers. The advent of lab-grown diamonds has made owning such pieces possible and has allowed a particular brand to thrive in recent years.
Mass market jeweler Pandora is known for selling stylish and affordable jewelry, with many of its popular offerings like charm bracelets, rings and necklaces strategically priced under $100. But their CEO Alexander Lacik told the Business of Fashion that they have found the “sweet spot to seize on rising demand” for lab-grown diamonds.
Related: An unpleasant surprise may be waiting for you on your next shopping trip
Traditionally, lab grown diamonds are usually seen as a cheaper, less superior alternative to natural diamonds, but Pandora’s business model has found a way to break such stigma. By offering pieces featuring lab-grown diamonds like a $450 .25 carat sterling silver ring, or a $490 14 karat gold necklace in its lineup, they effectively sell the idea of accessible luxury to its customers.
Pandora’s business model mainly focuses on selling jewelry for self-purchase and gift-giving, as opposed to traditional jewelers like Zales and Tiffany & Co., who tend to sell high-quality natural diamond jewelry as a large one-time purchase like an engagement ring.
According to Lacik, these higher-end jewelers lack the incentive to sell pieces featuring lab-grown diamonds because it would mean that they would be moving down-market into a cheaper, less profitable product.
More Retail:
- ‘Too pretty’ Home Depot worker faces backlash after viral mirror post
- A classic kitchenware brand files for Chapter 11 bankruptcy
- Who’s running The Gap? With no CEO, retailer hurtles towards crisis
“The earnings model simply doesn’t work,” Lacik told BOF. “This is the real reason why it’s an issue for them.”
The Pandora (PANDY) -) CEO noted that sales of their lab-grown diamond jewelry meet their expectations and that they are confident going into the holiday season.
Currently, Pandora sells pieces featuring lab-grown diamonds in-store and online in both the U.K. and the U.S., and have recently introduced them in Australia. The company also intends to introduce the products in Brazil and Mexico later this year as part of its global plans.
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
