In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the Pandora franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Pandora franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of Pandora’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average, median, high, and low gross sales for the 216 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2014 through December 31, 2014
- 2014 range of gross sales by quartile for the 216 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2014 through December 31, 2014
Section I – Background Information
Pandora has become a true juggernaut in the jewelry industry. The company designs, makes, and markets its own hand-finished modern jewelry at affordable prices using genuine metals. The company has been around since 1982 and is headquartered in Copenhagen, Denmark. The jewelry, however, is manufactured in Gemopolis, Thailand.
The company’s products are offered for sale in no fewer than 90 countries around the globe in more than 10,000 locations, at least 1,400 of which are concept stores. Pandora is a public company listed on the NASDAQ Copenhagen stock exchange in Denmark and in 2014 had total revenue of $1.75 billion.
How does a local Danish jeweler become a world-leading international phenomenon? It began with Danish goldsmith Per Enevoldsen and his wife Winnie. They often found themselves traveling to Thailand to find great jewelry to import, and started wholesaling to Danish clients. In 1987, they decided to begin designing and making their own unique pieces.
Here’s how Pandora maintains its growing international empire:
Pandora’s mission is “…to offer women across the world a universe of high quality, hand-finished and modern jewelry made from genuine metals at affordable prices.” That’s enough to send any woman to the moon and back.
But that doesn’t mean looking to the high-end jewelry brands for its cues. Instead, it looks to fashion trends and the consumers themselves to figure out what products to make. Clearly, it’s working.
Pandora takes a responsible approach to its business. Suppliers are carefully screened and audited for fairness, honesty, and adherence to high standards of labor, respecting human rights as well as minimizing environmental impact.
It also adheres to those same high standards in its own production facilities in Thailand. Its Thai workers enjoy competitive wages and benefits that include free meals, free bus transport, scholarships, library services, maternity classes, extra holidays, sporting activities, as well as numerous social events.
Pandora’s global operations are all certified by the Responsible Jewelry Council (RJC), while its manufacturing facilities are certified to the ISO 14001 (Environment), OHSAS 18001 (Health & Safety), ISO 50001 (Energy), and ISO 9001 (Quality) standards.
Multiple Retail Formats
Concept Stores are full-blown Pandora locations carrying complete assortments of products with a branded storefront and featuring company fittings and displays. The Shop-in-Shop model is made up of a clearly defined space within another store dedicated to Pandora products, looking much like a concept store only smaller and without the storefront.
Gold Dealers are multi-brand retailers with a strong Pandora profile. Gold Dealers receive some but not all of the same benefits as Concept Stores and Shop-in-Shops. Silver and White Dealers are non-branded retail formats. Silver Dealers are multi-brand retailers carrying a medium assortment while White Dealers are multi-brand retailers carrying a limited assortment.
The company is specifically looking to increase the percentage of sales coming through branded channels to solidify and strengthen brand awareness.
Rather than only two annual product launches, the company is now doing seven each year. It is actively expanding its primary focus from charms/bracelets to include rings in a more significant way.
Section II – Estimated Costs
- Please click here for detailed estimates of Pandora franchise costs, based on Item 7 of the company’s 2015 FDD (updated).