Pandora Jewellery, the world’s largest jewelery selling company, is now planning to reduce its dependence on silver. She says that now she will use platinum plating instead of silver in some of her jewelery ranges. Silver prices have increased more than double in the last one year. At the same time, other precious metals like gold have also seen a strong rise.
Why is Pandora reducing its dependence on silver?
Pandora CEO Berta de Pablos-Barbier told CNBC that the company does not intend to make all jewelry platinum-plated. But, in view of the sharp fluctuations in prices, it has become necessary to reduce dependence on silver. For this reason, the company is planning to reduce the share of silver in its total products to about 20%.
Role of silver in Pandora’s business
Danish jewelry company Pandora is one of the world’s largest jewelry retailers. At present most of its products are made of silver. Pandora is especially known for its charm bracelets.
According to its CEO, at present about 60% of the company’s business is dependent on silver. Therefore, the rise in prices directly impacts the costs and earnings of the company.
Platinum is expensive, yet how will the cost be controlled?
However, platinum is much more expensive per ounce than silver. Its current price is about 28 times that of silver. However, Pandora has clarified that it will do platinum plating on the alloy. With this, there will be no need to use pure platinum and the cost will be kept under control.
This means that the material inside will be of some other solid metal, the company will just coat it with platinum. Pandora claims that this change will neither increase nor decrease the price of jewelery for customers, meaning the price of platinum-plated products will remain the same as silver jewellery.
Why abandon silver and switch to expensive platinum?
- The jewelry that Pandora will make will not be made entirely of platinum, but will have a very thin layer of platinum layered over another metal alloy (such as a copper or steel base). This will make the jewelery look like platinum, but in reality the amount of platinum in it will be very less.
- Platinum is much more expensive and rare than silver, but it is used at the micro-level in plating. Hence the total metal cost remains under control and the company does not have to bear as much expense as solid platinum jewellery.
- Silver prices have increased more than double in the last one year. There are still huge fluctuations in it. This has had a severe impact on the costs and margins of jewelery companies. In comparison, platinum prices are largely stable.
- Platinum is generally considered the most premium white metal after gold. Therefore, even if it is made of alloy, the jewelery appears more expensive and upmarket to the customer. This can help in increasing brand value.
- Pandora says that by platinum plating on alloy, the jewelery will neither be more expensive nor cheaper than silver. That means the customer will not feel the difference in price, but the company will benefit at both cost and marketing levels.
Benefit of customer perception and ‘elite’ image
Jewelery historian Vivienne Baker says that platinum has an ‘elite’ image. So even if it is based on alloy, customers will get a feeling of value. According to him, after the increase in gold prices, consumers’ inclination towards white metals has increased. Therefore, this move of Pandora can be considered as ‘smart marketing’, which will attract upmarket customers.
What does Pandora’s research say about platinum?
Pandora says its research and insights show platinum is highly regarded among consumers. According to the company, it is considered the second most valuable white metal after white solid gold. This is the reason why the company seems confident about this metal.
Where and how will the new jewelery be launched?
Pandora will launch some platinum-plated versions of its best-selling bracelets in 30 stores and online platforms in Northern Europe. After this, its global rollout will be done in the second half of 2026.
In the short term, Pandora will rely on third-party vendors for platinum plating. Later this work will be shifted to its plants located in Thailand and Vietnam. The company aims to fully implement this change by 2028.
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