潘多拉的电镀风险：品牌面临生存挑战

+44 20 7676 6806william.woods@bernsteinsg.com PandoraRating +442077621050richard.trainor@bernsteinsg.com UnderperformPrice Target +44 20 7676 6739alice.buckley@bernsteinsg.com +44 20 7676 7293rhea.gudiwala@bernsteinsg.comSpecialist Sales Alix Turner +44 20 7762 4044alix.turner@bernsteinsg.com Pandora: The existential plating risk amidsurging silverprices andhas just launcheda beta collection in the Netherlands in July.Shiftingfromsterling silvertoplatinum-platedjewelleryposesan existential brandrisk overH2-26 and FY27.It challenges perceptions of quality,durability and pricing,andcustomerfeedbackispolarizedamongstcorefans,andexacerbates problemsoutlined inour Blackbook (here).Firstly the product quality is diminished -customers are no longerbuying a wholly preciousmetal piece of jewellery.Secondly,the durabilityhas tobe calledinto question on everyday, high-friction pieces of jewellery like bracelets where signs ofwear could show after a few months.Thirdly,they are trying to sell platinum-plated steelplatinum-plated product at a c.30-40% discountto sterling silver (Exhibit 1). PNDORA.DC Close Price (DKK)792.80Price Target (DKK)370.00Upside/(Downside)(53)%52-Week Range1,099.00/430.00EDME1,594.78FYEDecDiv Yield2.8%MarketCap (DKK) (M)59,460EV (DKK) (M)75,550Performance1M6M12M Whenwelookatthecompetitivelandscape,therearefewretailersthat offerplatinum-platedjewellery.Onesmallcompetitor,Missoma,hasstartedtoofferaplatinumplatedsteelrange.However, the challengehereisthatfor similar SKUs-theplatinumproductis offered at a significant discount (c.30-40% cheaper).We already think Pandorahas taken too much price (both LFL and mix) in a fungible gifted category with younger, lessaffluent consumers. Taking further price in silver, and the shift to platinum will only compoundtheseissues. Customerfeedbackisnegativeandstrong,amongstcorefansonReddit.Whenwetracked comments fromr/PandoraCollectors Reddit forum,there isa sense ofwidespreaddisappointmentandevenbetrayalamongstthelong-termPandora collectors.Concernsjewellery. Many already refuse to buy Pandora's gold-plated jewellery as plated jewellery isseen as junk, and the transition means that Pandora'cannot justify their prices' InvestmentImplications We rate Pandora Underperform with a target price of 370 DKK, based on an average of a P/E(8x) and EV/EBIT (8x) multiple applied to our NTM+1 estimates. sterling silver when competitors sell itfor 30-40% cheaper...alongside issues ofquality, durability,and negativecustomerfeedback AtFY25results,Pandoraannouncedastrategicevolution"toshift75%ofthesilverassortmenttoplatinum-polarized brand perception and the intention for the plated jewellery to be priced the same as its silver jewellery, we think thisputs the brand in a precarious position and risk losing the core of its brand identity. developed to outperform silver in everyday wear.The platinum plated products will be sold atthe same price point as silverproducts and Management do not think that moving towards plated jewellery will damage the brand, given that platinum is aprecious metal andthat the Evershine alloy is durable ·However, wethink itposes significant brand risks and willcatalyze furtherthe needfor Pandora to takea pricingreset -we do not believe consumers will pay the same for plated vs.pure silver jewellery.Brand perception is alreadypolarised and reducing the quality of the products will only make this issue worse. :As we have written in our Blackbook (Pandora: Losing Its Charm),Pandora faces the typical challenges of the brandcycles-managementtransition,polarized brand perception,toomanystores,excessivepriceincreases,and commoditypressures. Sustainable growth is difficult to find through the cycle. Pandorahas launchedapilotrelease/capsule in theNetherlandstotestoutconsumerperceptionof thenewplatinum-plated jewellery and sales uptake, having been pushed-back from April. The jewellery description says it is platinum platingona stainless steel base,which is notnecessarily particularly special,andwe struggleto see howthis supports themarketingof its “Evershine"alloy as something unique. Pandora has initially said that it will offer the platinum-plated jewellery at the same price as the sterling silver, which hasheld true.In Exhibit 2,we show an exampleofaplatinum-plated braceletfor69,which isthe sameprice as the samebracelet in France (Exhibit 3) but in sterling silver. As a result, it looks as though they have also increased the price of thesterling silver products in the Netherlands as well by c.10. Wequestionthestrategyof nowoptingforplatinum-platedstainless steel,when Pandora has an existing uniquemetalblend.Plus,givenplatinumismoreexpensive,wethinkthelayerusedmaybeextremelythinandthereforewouldwearaway more quickly,which we don't think would be favorable with customers. Our biggest challenge here is the lack markets,and cruciallyhow durablethenew product will be. DETAILS OurPandoraMomentssnakelinkbraceletwithminicylinderclasp andalasting,