World’s Largest Jeweler Opts Out of Silver Due to High Costs
In response to soaring silver prices, Pandora, the world’s largest jeweler, is transitioning to platinum. The company has reported that silver prices have more than doubled recently, reaching approximately $80 an ounce. This increase significantly impacts Pandora’s ability to maintain its affordable luxury reputation.
Pandora’s Strategic Shift to Platinum
CEO Berta de Pablos-Barbier expressed concerns over the risks of relying heavily on silver. “It is very risky for any business to be dependent—so highly—on one commodity price,” she stated. To mitigate this risk, Pandora plans to introduce a new line of platinum-plated jewelry.
Details on New Jewelry Line
The new jewelry line will utilize a metal alloy beneath the platinum layer. This strategy aims to reduce reliance on sterling silver while keeping prices accessible for consumers. Company executives believe this approach will yield a more durable product since platinum is known for resisting corrosion and tarnish.
Market Challenges and Future Plans
Pandora is facing challenges from weak consumer demand and U.S. trade policies. The company currently operates manufacturing facilities in Thailand, with plans for an additional site in Vietnam. However, these locations are subject to tariffs imposed by the Trump administration, which affect goods from both countries.
- Current tariff rate: approximately 20%
- Pandora’s share value has decreased by over 50% since tariffs were introduced.
- Silver prices have surged, pressing the need for strategic changes.
Pandora has hedged most of its silver requirements for 2026 at lower prices. However, as these contracts expire, the effectiveness of its platinum transition will be vital for the company’s profitability. Without these changes, Pandora projected a potential 11% decline in profit margins based on current silver prices. With adaptations in place, the jeweler anticipates maintaining profit margins of 21% or higher.
As the jewelry market evolves, Pandora’s focus on platinum may redefine affordability in luxury, ensuring it continues to cater to its customer base amidst rising metal costs.
