Yahoo Finance Lab-Grown Diamonds Will Be More Popular Than Mined in 10 Years, Says Pandora CEO
(Bloomberg) -- Pandora A/S’s chief executive officer expects it will take less than 10 years before consumers buy more lab-grown diamonds than mined stones because they increasingly weigh up costs and climate impact when buying jewelry.
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Alexander Lacik, whose company makes more pieces of jewelry than any other in the world, said he estimates that manufactured diamonds currently make up about 20% of the total market, according to interviews with Bloomberg TV and by the phone.
“This is disrupting in a big, big way,” he said. “Consumer perception swings really fast.”
Pandora sold jewelry with lab-grown diamonds worth 61 million kroner ($8.9 million) in the second quarter, an 88% increase from a year earlier. However, that only accounts for less than 1% of the company’s total sales — a ratio Lacik is aiming to increase. By 2026, Pandora targets annual lab-grown diamond sales of 1 billion kroner, or about 3% of total revenue, he said, adding that sales are likely to “keep growing at a good clip.”
The Copenhagen-based jeweler last year deployed a new strategy to move the brand away from being only associated with charms, and instead recognized as a full jewelry brand. Bringing cheaper diamonds to the middle class is a key part of that strategy, Lacik said, estimating that production costs of lab-grown stones are about one-quarter to one-third of mined diamonds.
Pandora first rolled out manufactured diamonds in 2021, at the same time ending all sales of traditional diamonds and has since phased out other mined gemstones. In June, the company introduced its first lab-made diamond collection in the EU — in its home market Denmark — and so far reception has been strong, Lacik said. The man-made diamonds are also sold in the UK, North America, Australia, Mexico and Brazil, and will launched globally, one country at a time.
“It’s selling at a surprisingly high level in that one store” in Copenhagen, Lacik said. “We are the first ones to start marketing lab-grown diamonds in Denmark, but the reception so far has been very positive.”
Shares of Pandora were on a tear earlier in the year, when growing demand for lab-made diamonds prompted the company to raise its guidance. The stock rallied almost 20% in the first quarter, but the optimism has since fizzled, with the stock up only 13% year-to-date.
The stock rose as much as 3.8% in Copenhagen on Tuesday, after another guidance upgrade late Monday, which analysts said was largely priced in.
(Updates with details on Pandora’s diamond sales in sixth paragraph)
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