Pandora, the world’s largest jeweler, best known for its silver charm bracelets, said it will stop selling mined diamonds and switch to affordable lab-grown gemstones as part of a broader focus on sustainability. “Diamonds are not just forever, but for everyone,” Pandora CEO Alexander Lacik said in a statement Tuesday announcing the launch of Pandora Brilliance, the company’s first collection to use lab-made stones.
Pandora PANDY shares, + 4.69% PNDORA, + 5.95% rose 5.78% in early European trading on Tuesday. The stock is up more than 10.25% so far this year, according to FactSet. Copenhagen-based Pandora used mined diamonds in about 50,000 pieces last year out of a total of around 85 million pieces of jewelry. The company said the new collection aimed to “transform the diamond jewelry market with affordable and sustainably created products.” Read: For Engagement Rings, Are Natural Diamonds About To Disappear? It will initially be introduced in the UK with plans to launch in other key markets next year. Pieces will start from £ 250 ($ 347) and each stone will range from 0.15 to one carat, the company said. Lab-created diamonds have been grown with over 60% renewable energy on average, a figure that is expected to rise to 100% when the collection launches globally. The demand for artificial diamonds has grown steadily, particularly among younger customers, who are eager to identify gems that are guaranteed to be conflict-free and cheaper for their wallets. The market for lab-grown diamonds is currently enjoying double-digit growth, according to the latest report from the Antwerp World Diamond Center and consultancy Bain & Company. Prices have also been falling, and man-made gems are now up to 10 times cheaper than mined diamonds, making them more accessible to a wider range of price-sensitive consumers, the report noted. The launch of the new Pandora collection came as the company reported better-than-expected first-quarter results and updated its forecast for the full year. It now expects underlying revenue to grow more than 12%, up from more than 8% previously, and its operating profit margin to be more than 22%, up from more than 21%. Read: Pandora closed 30% of stores in January The company said it plans to grow its core markets, with a particular focus on China and the United States, where its brand penetration is still low. The two markets represent more than 50% of the world jewelry market. Analysts at RBC Capital said that Pandora had demonstrated “impressive resilience” in the face of a challenging economic context from COVID-19 with a healthy channel shift towards e-commerce. “From here on, we view your path to positive revenue growth as more challenging, and we remain cautious on your path to positive retail LFLs. [like for likes]. Consensus estimates rise from FY21E [financial year 2021 estimate] and the valuation is less favorable, ”they wrote in a research note Tuesday.