The Pandora phenomenon
In the space of five years, Pandora has radically changed the Australian jewellery industry. As Coleby Nicholson reports, the company’s success has not been limited to the popularity of its jewellery designs.
Karin and Brook Adcock
When Karin and Brook Adcock started their Sydney-based jewellery business in 2004, they never imagined for a second that, within five years, they would be employing more than 200 staff and achieving annual revenues measured in the many tens of millions.
Nor did they dream that in fulfilling their goals they would change the face of the Australian jewellery industry and that their products would become literally an “overnight sensation”.
Not that Karin Adcock sees her success as being overnight, she retains vivid memories of the hard slog of those early days, tramping the streets until late at night, distributing leaflets under the doors of jewellery stores in the hope of stimulating sales.
“There were only so many appointments I could do in a day, so I would walk the streets after hours putting my leaflets under the doors of jewellery stores, hoping that I would receive a call. I don’t know how many stores told me politely that our product was ‘not for them’ and I would leave that store just to try another,” Adcock said.
“By the end of our first year we started 40 accounts and I personally opened 36 of them,” Adcock says. “It was very difficult and Melbourne was the hardest place to get started. I walked the streets of Melbourne for three days from 7am to 11pm to find suitable stores. I got just one new account over the three days.”
Regardless of those memories, the reality is that – by any objective standard – Adcock’s Pandora Jewellery has become a tear-away success. While she was reluctant to disclose annual sales and would make no comment, industry experts believe that Pandora’s annual turnover now exceeds $100 million at the wholesale level.
The sales are being achieved across 700 retail stores in Australia, New Zealand and Fiji, including 11 company owned retail outlets. The staff head count of more than 200 includes part time retail staff (90 in head office).
L-R Pandora designers, Lone Frandsen and Lisbeth Enø Larsen
with Karin Adcock, Managing Director Pandora Australia.
Remarkably, the Adcocks did not have any experience in the jewellery industry and literally stumbled across the opportunity. In fact Adcock believes it was her lack of knowledge about jewellery that has been a key ingredient in the success of the Pandora business.
While on a business trip to Hong Kong from Denmark in 1994, Danish-born Karin met Brook Adcock, an Australian airline pilot. She moved to Australia in 1995 and they were married in 1997. For the next few years they dabbled in a couple of small businesses and in early 2004 Karin heard about the Danish jewellery company, Pandora.
“A friend of mine had told me about Pandora being very popular in Denmark and she suggested that we have a look at it. Within a couple of weeks I was on my way to Denmark. I went straight to a jewellery store and had a look for myself and I thought it could be very popular here.
I am very picky with jewellery but I thought the concept was great,” Adcock explained.
“I contacted the Pandora office in Copenhagen. They told me to send them an email as they were already talking to several parties in Australia. I insisted on meeting since I was in Denmark visiting.
Finally they agreed and we met the next day. I spent three hours there and when I left I felt we had a pretty good chance of getting the agency,” Adcock said. I was told to go home and do some research and do a marketing plan for how to introduce the brand to Australia.”
In September 2004 she sent a complete business plan which had been developed. Based on their evident enthusiasm, and the quality of their plan, Pandora granted the couple the rights to Australia and New Zealand.
“Pandora thought we had some good ideas and we agreed to start the following month. The timing was just right for us. We could not have opened in Australia in a big way overnight. Pandora did not have enough product to support us with stock anyway so we had to start slowly,” she explained.
They did not count on Adcock’s tenacity and Adcock herself did not know that the Australian jewellery industry was undergoing a major shift. Branding was beginning to take hold.
It is somewhat incongruous that jewellery in Australia, and largely worldwide, has been unbranded. True, there are some jewellery brands but when compared to other consumer categories that are dominated by ‘brand’, jewellery was not. What’s more, consider that watches are almost solely purchased on ‘brand’ then it is even more odd that branded jewellery has been slow to catch on.
The purchase of jewellery has largely been based on budget (gold or silver), style and design, which effectively meant that very little product was supplied on a brand basis because the industry has always been a manufacturing-based model with suppliers marketing their product around quality, price and stock service.
Karin Adcock, Managing Director,
Pandora Jewellery, Australia
However, over recent years there has been a slow move to other consumer product business models of marketing the brand to drive consumer demand from retailers.
Although Pandora cannot lay claim to starting the branded jewellery evolution – though it helped drive it in Australia – it can lay a large claim to the personalisation of jewellery. The concept that you could “design” your own pieces that were more unique to you has been integral to Pandora’s success.
The consumer had to take what was on offer whether it was an 18-carat gold chain or solitaire diamond ring, but Pandora’s concept was to make it more individualised and personalised.
“Somehow we have struck a core desire to express individualism and emotions and unforgettable moments in a piece of jewellery that a person can design themselves,” Adcock explained.
Pandora was founded by a Danish jewellery artisan, Per Enevoldsen. Started in 1979, the business has become a worldwide phenomenon. He comments, “At no stage did I ever dream Pandora would become what it has,” adding, “One of the reasons is that we have always been too busy concentrating on new designs and product quality, that the success sneaks up on you.”
Enevoldsen began importing jewellery from Thailand in 1982 and, along the way he started arranging for his own designs to be manufactured there. After various attempts at managing production from afar, and with sales steadily increasing, Enevoldsen decided to establish his own manufacturing facilities in Bangkok.
In 1989, he established a small manufacturing facility in Bangkok, employing 10 people. In 1999, Enevoldsen designed and patented the charm bracelet which quickly became popular all across Europe.
The bracelets have a patented threading system that allows charms to be placed, added and rearranged, by the wearer. Per Enevoldsen now lives in Bangkok and manages two factories which employ more than over 1,600 workers, thanks to the remarkable worldwide success of the Pandora products.
Australia has become the third-largest market for Pandora worldwide, overtaking Holland and by 2008 Australia represented 20 per cent of the entire production and has become a model for the Pandora operations, worldwide.
But when you meet Adcock you get an immediate impression that she was not going to fail. From establishing the business in their home garage in Sydney’s Avalon, to now operating from a 4000 square metre, purpose-built distribution centre, Adcock is quick to acknowledge that the success has only been achieved by surrounding herself with good people.
“Being a small, family oriented business where everyone knew each other and staff came on-board with a handshake and a verbal description of their role – which was pretty much, ‘you will need to wear all hats’ – today we have a HR department and (documented) job descriptions for all our staff,” Adcock said.
About the author: Coleby Nicholson is editor of Jeweller, the leading business-to-business magazine for the Australian and New Zealand jewellery industries. www.jewellermagazine.com
More reading: Birth of brand Pandora