On August 15, Danish jewelry brand Pandora A/S announced in its second-quarter earnings report that it would double its planned store closures in China from 50 to 100 stores this year, while implementing large-scale layoffs in the Chinese market.
This means Pandora's store count in China will decrease by approximately 57%, with more than half of its existing 183 stores set to close. How did this jewelry giant, which once sold 100 million pieces annually and ranked among the world's top three jewelry brands by volume, reach this point?
**Cliff-like Performance Decline: From Peak to Valley**
Pandora's collapse in the Chinese market is starkly reflected in its financial data. In the first quarter of 2025, Pandora's sales in China totaled only 96 million Danish kroner (approximately 110 million RMB), down 11% compared to 2023. The second quarter saw continued deterioration, with comparable sales in China plunging another 15%, while the group's overall comparable sales actually grew 3% during the same period.
This decline isn't a short-term phenomenon but a persistent multi-year trend. From 2019 to 2025, Pandora's revenue share from the Chinese market plummeted from 9% to just 1%.
The glory days of 2019, when Pandora generated 1.97 billion Danish kroner (approximately $284 million) in Chinese sales, are now a distant memory. By the second quarter of 2025, Pandora's revenue share from China stood at merely 1%, a stark contrast to its peak performance.
**Behind the China Retreat: A Perfect Storm of Multiple Factors**
Pandora's defeat in China wasn't caused by a single factor but resulted from multiple converging forces.
Consumer preferences have shifted toward "value preservation" as the primary consideration. Chinese consumers, particularly younger demographics, increasingly prioritize "value retention" when purchasing jewelry. Gold consumption is becoming younger, with domestic brands like LAOPU GOLD rising rapidly due to their high value-preservation attributes.
According to Guohai Securities analysis, LAOPU GOLD combines value preservation with collectible properties, steadily expanding its presence in premium shopping districts in tier-one and tier-two cities. In 2023, China's gold consumption increased 6.72% year-over-year, further confirming this trend.
In contrast, Pandora primarily uses 925 silver, 18k gold, and synthetic gemstones, offering high premiums but poor value retention. Its signature DIY charm concept, once attractive for creating "unique stories," is increasingly viewed as "overpriced" by consumers.
**Product Defects and Value Proposition Controversies**
Pandora extensively uses alloys, 925 silver, cubic zirconia, and enamel, materials that not only lack value retention but are prone to oxidation. One consumer noted: "After sitting unworn for a while, it oxidizes and turns black. Store cleaning requires appointments, and cleaning it yourself is troublesome."
In the secondary market, Pandora products have extremely low resale values. A luxury goods reseller stated: "We don't accept Pandora bracelets, only major brand accessories and gold jewelry." On platforms like Xianyu, Pandora bracelets and charms typically resell for 10-30 yuan per piece, far below their original prices.
**Intensified Competition and Blurred Brand Positioning**
Pandora faces pressure from multiple competitive fronts. Luxury brands like Cartier and Tiffany continue expanding their Chinese market share, while domestic affordable luxury brands like HEFANG rapidly rise through celebrity marketing and fast design iterations.
HEFANG successfully attracted young customers by placing products in TV dramas like "The Story of Rose," linking products with "urban women's independent spirit." Meanwhile, Pandora's marketing still relies on traditional advertising, with online channels accounting for less than 20% of sales.
**Deeper Issues: Cost Pressures and Strategic Missteps**
Silver, a key raw material for Pandora jewelry, is priced near 15-year highs. Pandora raised prices by 5% in October 2024 and 4% in April 2025, but these increases couldn't offset cost pressures.
**Global Market Divergence: Success Elsewhere**
Despite its Chinese market failure, Pandora continues growing globally, particularly in the US market. Financial reports show second-quarter revenue of 7.075 billion Danish kroner versus 6.771 billion in the prior year, with quarterly net profit of 803 million Danish kroner compared to 799 million previously.
Growth primarily benefited from strong US demand, especially during Mother's Day consumption. The US market represented 34% of Pandora's global business in 2025, becoming its largest market worldwide.
This global market divergence reflects Pandora's brand power exhaustion in mature markets while highlighting significant preference differences between Chinese and other market consumers.
Pandora expects to operate fewer than 100 mainland stores after closing 100 locations. Meanwhile, LAOPU GOLD reached 60 stores in 2024, entering premium shopping centers like Beijing SKP.
Wall Street analysts note that Pandora is transitioning from direct operation to authorizing local retailers to reduce fixed costs. However, whether this model shift will succeed depends on the brand's ability to redefine its positioning in the Chinese market.