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[April 05, 2014]
Columbia-based Pandora looks to expand presence and brand [The Baltimore Sun :: ]
(Baltimore Sun (MD) Via Acquire Media NewsEdge) April 05--Shoppers have come to know the Pandora name for glittering displays of customized sterling bracelets and gemstone charms sold by jewelers or the company's own retailers.
But the Danish company kept a lower profile for its Maryland connection -- a U.S. headquarters that's been lodged in Columbia since the brand arrived in the country in 2003. At first, the small headquarters didn't garner much notice; then the company didn't want to advertise the location because its warehouse was filled with high-priced goods.
Now, as sales grow rapidly, Pandora is looking to expand both its U.S. presence and brand. It plans store openings, more frequent product launches and a move to a bigger headquarters where it can add to its workforce of 210 over the next decade. The two sites under consideration are an office near its current Columbia base or a prominent spot at Baltimore's Inner Harbor.
"We've been a well-kept secret," said Scott Burger, president of Pandora Americas, which includes the United States, Canada and a small market in South America. At the same time, he said, "the company has grown very fast." Pandora's U.S. sales have skyrocketed, growing 25 percent to $750 million last year. Pandora bracelets, necklaces, rings and charms can be found in 80 countries. The company employs more than 8,500 workers worldwide, including about 5,900 in a production plant in Thailand. The company made 79 million pieces of jewelry last year.
In the United States, it sells through 3,235 retailers, including 332 Pandora-branded stores.
Pandora's growth comes at a time of steady growth for the $11 billion luxury designer jewelry market.
"The brands that seem to be doing the best are brands that have unique design elements," said Matt Allessio, a senior manager in the private equity and strategy practice for Kurt Salmon.
Pandora "has taken modern styling and modern trends with their jewelry, a lot of silver and gemstones and good use of color," he said. "They've done it in an affordable way. It's something you can use to differentiate yourself and stand out and present a unique image and not break the bank.
"There's been a bounce-back in luxury purchases," Allessio added. During the recession, "there was a social stigma for people wearing flashy things. That's worn off. People are using jewelry ... to stand out. They want to feel fresh and stylish and new, and jewelry is an easy way of doing it." Pandora bracelets sell for $35 and up and come in sterling silver, gold, leather and textile, while charms sell from about $30 to more than $600.
"We had a concept bracelet that has almost become viral. People really caught on to it," Burger said. "We are fairly proud of the fact that we've carved out our own space, an affordable luxury brand." Pandora got its start more than three decades ago with a goal of making affordable jewelry for the masses, using precious metals and gemstones. But the growth catalyst has been the bangles, introduced in the Danish market in 2000, which use a patented design that allows wearers to interchange charms to customize and create new looks.
Though bracelets now account for 90 percent of Pandora's business, the company has been building upon its collection of rings, meant to be stackable, over the past year and half. It launched a new bracelet line, Essence, with charms to represent values such as honesty, respect, freedom and peace.
That launch came as part of a 2013 shift in strategy, with the company increasing the frequency of product launches from twice a year to seven times a year.
"It really created newness in our stores on a much more frequent basis and gave people reason to come in and shop," Burger said. "We were fortunate that we had a product that people wanted, and I think we've shown a lot of discipline in getting better at what we're good at. We're very connected to the consumer. We think we understand what she wants pretty well and work hard to give it to her." New lines and designs have kept Laverne Brickus-Brown coming back to the Pandora store in The Gallery across from Harborplace. On Friday, the Federal Hill resident and stay-at-home mother of three was shopping with her husband for three new charms.
Brickus-Brown said she bought the bracelet at that store soon after it opened last fall and has been gradually adding charms. She now has seven, with stars, snowflakes, flowers and diamond designs.
"I interchange the charms a lot," she said, adding that she's thinking of starting a charm necklace. "It's cute. I like its versatility, how it holds up, the quality of it. You can make it a reflection of you." Pandora got its start in America when Pandora USA co-founder Michael Lund Petersen started the U.S. division in the basement of his Columbia home, Burger said. When Burger joined the company in 2007, it employed fewer than 40 people. The company has moved several times within Columbia to accommodate its growth.
The jewelry was first sold mostly at gift stores along the East Coast. As demand grew, the brand expanded into higher-end jewelry stores. In 2007, the company launched its branded retail concept for stand-alone stores, most of them located in malls and owned by franchise operators.
On Friday, Pandora opened two branded stores, both company-owned, at Baltimore-Washington International Thurgood Marshall Airport and in Georgetown.
"We'll continue to emphasize the branded retail and see that continue to evolve," Burger said.
Besides the branded stores, Pandora sells through a "shop in a shop" concept in upscale jewelry stores.
Burger said the company has responded well to a trend in which jewelry brands have become more popular.
"Over the last five years, consumers have become more brand-focused in the jewelry space, and we were well positioned to capitalize on that," he said, adding that he expects Pandora to pull market share from other retailers.
Pandora's Columbia headquarters employs 210 people who work in a distribution center and in back-office functions, marketing and product merchandising. Another 200 U.S. employees work in the field, including sales account managers who help stores manage product assortments in the company's 3,200 retail channels as well as visual merchandisers and retail operations managers who work with store franchise owners.
The company, nearing capacity at its headquarters, began seeking larger space about a year ago. The search has come down to two sites: a larger office in Columbia and about 100,000 square feet at 250 W. Pratt St. near the Inner Harbor.
Each site has benefits, Burger said.
In Baltimore, "I like the fact it would allow us to have more of a branded presence ... [with] the name on the building," he said. "I love what's happening in Baltimore from Harbor East pushing up through the Inner Harbor. I think we could add to that dynamic [and be] a significant consumer brand to really anchor Baltimore for years to come." But "Columbia has always been home to us," Burger said. "We like Howard County." The company plans to decide in the next couple of months and move by early spring of next year.
A Howard County official said the company is expected to keep part of the operation in Columbia, "so this is a win-win for the city and for Howard County," even if a move to the city is finalized.
"Pandora has been a great community partner in Howard County, and we fully respect their decision to move a portion of their operation to a space that fits their business," said Lawrence F. Twele, CEO of the Howard County Economic Development Authority. "We are delighted they are staying in the region." A downtown Baltimore office could provide visibility for the company and give a boost to the area's employment base, said Kirby Fowler, president of the Downtown Partnership of Baltimore.
"If Pandora were to move its headquarters to downtown, it would confirm the broadening of the diversity of the employment in downtown," Fowler said. "To have a retailer with the significance of the Pandora name, with its name emblazoned on the side of the building, would underscore the strength of the employment base." firstname.lastname@example.org ___ (c)2014 The Baltimore Sun Visit The Baltimore Sun at www.baltimoresun.com Distributed by MCT Information Services
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