Pandora was something of a godsend for jewelers during the dark days of the 2008–2009 recession. The brand kept their cash registers humming at a time when they weren’t selling much of anything. But there was always a nagging question lurking beneath the hype: How long will this last? Isn’t all this charm stuff just a fad?
Nearly a decade later, it is clear that the charm—or bead, depending which company you talk to—business is here to stay. There are now more companies selling charms than ever, and the two largest brands—Pandora and Alex and Ani—are among the best-known names in the industry. While jewelers have relied on inexpensive products to drive traffic in the past, it’s rare for so many low-end brands to become so big and so powerful.
Pandora, the biggest name in the field, has proved to have extraordinary staying power, if not without controversy. The Danish company’s 2015 U.S. sales jumped 12 percent in dollar terms to approximately $783 million—in spite of a policy of methodically yanking the line from independent retailers and focusing distribution on its new online Pandora eStore, concept stores, and big retailers like Jared. The “unbranded” independent jewelers that remain are being pressured to upgrade to the company’s branded shop-in-shops; even Jared plans to add 200 of them.
Pandora is also trying to expand the line, reminding some jewelry veterans of 2011, when its post–initial public offering bid to add watches and sunglasses notoriously flopped. But its more methodical plan to add rings has slowly borne fruit; the company says they now account for 10 percent of its sales in the United States.
Above: Blooming Dahlia clip in sterling silver with blush pink crystals, $60; below: Poetic Blooms charm in sterling silver with CZ; $60; Pandora, Columbia, Md.; 410-309-0200; pandora.net
At the same time, Pandora is facing its most significant competitor since Chamilia, which was purchased by Swarovski in 2013 and has seen a marked decrease in buzz. The new challenger is Alex and Ani. The Providence, R.I.–based line is known for being as New Age-y as its offerings—according to The Boston Globe, an astrologer serves on its board of directors. The company has also had high-profile turnover in its executive suite: In 2014, CEO Giovanni Feroce, who helped build the brand, resigned. Harlan Kent, the veteran retail hand brought in to serve as president, lasted less than a year. With founder Carolyn Rafaelian now firmly ensconced as CEO, Alex and Ani is reportedly hunting for a new chief operating officer.
In spite of its travails, the “positive energy” brand does significant business: Last year, the company—which is now testing its pieces in 108 Jared stores—said it was on track to do $350 million in business, more than 15 times its 2011 sales. It also has private equity backing and is perpetually rumored to be going public.
John Carter, president of Jack Lewis Jewelers in Bloomington, Ill., believes it’s the inspirational cards that accompany the pieces that have cemented Alex and Ani as a consumer favorite. “A lot of women will pick a bracelet because the card commemorates someone,” he says. “I’ve seen it help in their grieving process. The jewelry is 80 percent of it, but the card is the 20 percent that binds it together.”
Pandora seems to view the two brands as competitors, to the extent that when a former executive of Pandora Australia decided to introduce Alex and Ani Down Under, her replacement sent a letter to Pandora’s Australian retailers warning them away from the interloper. Yet jewelers consider them to be very different.
It would be difficult to imagine Alex and Ani calling itself “affordable luxury,” as Pandora does, or Pandora designing an app heavy on astrology and New Age iconography, as Alex and Ani has. Byron Strickland, owner of Strickland Jewelers in Enterprise, Ala., says that Pandora attracts mostly 16- to 18-year-olds, and then over-40s; Alex and Ani’s customers are mostly teenagers and millennials.
The sector is also seeing a host of newcomers. Last year, Thomas Sabo, an edgy German brand, announced plans to increase its presence in the U.S. market and open a store in New York City. There’s also Endless, touted by Jennifer Lopez and founded by former Pandora executive Jesper Nielsen (who has since left the brand), Bourbon and Boweties, Kendra Scott, and Moon and Lola.
Above: Charm bracelet in sterling silver, $49; charms in silver with CZ, diamonds, 18k rose gold plating, and enamel, $29–$98, charm in sterling silver with enamel, $69; below: Glam & Soul necklace in sterling silver with 18k yellow gold plating, $69; charm carrier in silver with 18k yellow gold plating and CZ, $32; charms in silver with 18k yellow gold plating, CZ, and enamel, $49–$59, Thomas Sabo, NYC; 212-520-4972; thomassabo.com
The Millennial Factor
Jewelers who carry these lines say they present certain advantages. For one, they increase store traffic.
“When every jeweler jumped on the Pandora bandwagon, it opened our eyes,” says Shane Woodruff, owner of Crocker’s Jewelers in Texarkana, Texas. “We spend all this money for marketing to increase store traffic. Pandora can increase your store traffic.
“Typically independent freestanding jewelry stores are intimidating places,” Woodruff adds. “If people know that when they drive up we have Alex and Ani and it’s $28, they know they can afford something. It breaks that threshold resistance.”
Second, customers of these brands often buy more expensive things down the road. Carter sees customers wearing Alex and Ani pieces alongside higher-end items. “I gave my wife a diamond bracelet, and she never wore it until I gave her an Alex and Ani piece,” he says. “As a jeweler, it just drives you nuts. As a husband, I’m just glad she’s wearing it.”
Perhaps most important, low-cost and trendy brands attract millennials. Young consumers pose a challenge for many jewelers, and these lines are a way to spread the message that this isn’t your father’s jewelry store.
Above: brass cuff with assorted charms, $170; below: Preston steel bracelet with acrylic Haven charm; $74; Moon and Lola, Apex, N.C.; 919-306-2257; email@example.com; moonandlola.com
“We need things like this to attract younger consumers,” says Carter. “It just adds an air of approachability. You can’t sell anyone anything if they have resistance to coming in the door.”
Strickland says these lines “are bringing in 17-year-old girls who would never come in our shop. Hopefully, the 17-year-old girl comes in and sees engagement rings and thinks, I should get my engagement ring here.”
Sean Dunn, vice president of J.R. Dunn Jewelers in Lighthouse Point, Fla., says low-cost lines fit younger buyers’ budgets and sense of style. “The millennial customer that everyone is trying to go after and attract wants affordable price points,” he says. “It is a very minimalist movement with the kids these days. Everything is fine, petite, very lariat. It is not big and bold.”
Critically, the brands advertise. Many companies talk about becoming names on the consumer level. But very few want to spend the money. The big charm brands, however, do, often to strong effect: A recent Pandora commercial, showing a group of blindfolded babies recognizing their moms, has garnered nearly 18 million views on YouTube.
“These companies do really good marketing,” Woodruff says. “They really spend the money on promotions.”
As a result, consumers know them. “With Pandora we consistently have every single day people coming in and asking about Pandora or calling about it,” Strickland says. “We carry a lot of great luxury lines in the store. I wish we had people calling every day about them.”
Top: Single black leather bracelet, $40, double white leather bracelet, $50, yellow gold–plated charms, $40–$95; Endless Jewelry, Fort Lauderdale, Fla.; 855-665-8555; endlessjewelry.us
Inset: Wraps and Expandable Wire bangles in Rafaelian Gold and Rafaelian Silver; $28–$48; Alex and Ani, Cranston, R.I.; 800-725-7822; alexandani.com
Jewelers give these tips for selling charm and bead brands:
Be sure to show charm shoppers something else. “When people say it doesn’t work, I ask, ‘What is your system?’?” says Shane Woodruff of Crocker’s Jewelers. “Are you really keeping up with how often your people are showing something else? You have to have a plan. It has to be a requirement.
“We recently had an Alex and Ani customer come in for a $26 bracelet who then bought a $30,000 item,” he adds. “That happens all the time. I read that the average person buys gifts for eight people. If they buy a thousand-dollar bracelet for someone, what are they going to get the other seven people?”
Give employees ownership of charm sales. “We found the best way to handle Pandora is not having our more experienced sales staff do it,” says Strickland Jewelers’ Byron Strickland. “We have two younger employees handle it, and they do great. That frees up our more experienced sales staff to sell things like diamonds.”
Ensure the store matches the experience. The millennials who buy Alex and Ani may feel awkward shopping at a traditional-looking -jewelry store, says Strickland. So he redesigned the front of his space to attract those consumers. “It has really helped liven up the store,” he says. —RB