Pandora Swot Analysis

Pandora’s History

Pandora A/S has built from a single jewelry shop by Per Enevoldsen and his wife Winnie, in 1982 in Denmark. In the late 80’s, they hired a new designer, and built a production factory in Thailand, and moved there. The company then switched to selling wholesale to other shops in successful expansion.

In the 90’s, the company’s designers came up with its signature product, the silver charm bracelet, which was first launched in 2000. This is the hit product that launched Pandora onto the global stage.

In 2003, the company expanded beyond Scandinavian countries to the U.S. and Canada, Continental Europe and then globally with over 100 countries over six continents. In 2015, Pandora launched the Pandora EStore. Online sales have

Pandora charms are very well crafted in a variety of interesting designs, with charms ranging anywhere from about $25 to higher-end pieces for as much as $450. In this way, Pandora appeals to everyone, and as a new brand with great design, customizability, and 7 annual product collections (or drops), is also trendy even for the wealthy.

Pandora A/S has a product that reduces customer pain points, and inspires repeat buying. Pandora’s charms, like many other high-growth consumer companies of recent years, is built on “affordable luxury.” Think Starbucks, Ulta Salon, Chipotle, Netflix, and other great growth stocks of the past decade. Some of the common attributes among these companies is that their offerings are desirable and accessible to a wide swath of the population on a very global scale.

Pandora also has a competitive advantage in being an “unpretentious” brand. By selling wholesale, the company can expand very quickly with very little risk into new markets. Once a market has been proved to be receptive to the charms, the company then goes in and upgrades its points of sale to either branded “concept stores,” or “shop-in-shops” (a branded store within a larger jewelry or department store, with dedicated Pandora staff), and can close down 3rd-party or multi-branded stores, which are not as

However, the DCF valuation method gives an intrinsic value here of ~1375 DKK, which is roughly 63% above today’s close. The assumptions for the base case are EBIT growth at 17.5% for next 4 years (27% reinvestment, 65% ROIC); WACC of just under 7.5% (1% RF rate and 6.5-6.75 ERP). The company is currently investing in a huge expansion of production in Thailand, to double its capacity by 2020, given the growth prospects.

This value ~1375 DKK would translate to a trailing P/E of around 32x, which seems more in line with similar U.S. growth consumer peers. Pandora A/S would STILL be somewhat cheap to comps like Starbucks and Ulta Salon, given similar growth and ROIC features. Ulta Salon Starbucks Pandora