Pandora 2015 Revenue Up 40% to $2.4 Billion

Pandora presented its preliminary 2015 report Wednesday, saying its revenue increased approximately 40 percent year-over-year to 16.7 billion Danish krone ($2.4 billion), exceeding its financial guidance of 16 billion Danish krone. The increase was aided by favorable foreign exchange rates of around 11 percent, a percent above what the company projected in November 2015.

The company’s preliminary EBITDA margin is 37 percent, one percentage point above its 2014 margin. The company, which has been in expansion mode, reports its capital expenditure in 2015 was approximately $1 billion Danish krone ($144 million), more than double its 2014 expenditure.

Pandora designs and markets its jewels at its Copenhagen, Denmark, headquarters and manufactures the pieces in Gemopolis, Thailand. Primarily known for its charms, it sells its jewelry through approximately 9,500 points of sale, including more than 1,600 branded stores, in more than 90 countries on six continents.

Pandora is publicly listed on the NASDAQ Copenhagen stock exchange in Denmark. In 2014, Pandora's total revenue was 11.9 billion Danish krone (approximately $1.7 billion).

Just over a week ago, Pandora made some news in Australia. It was reported that the company sent an email to its retailers in Australia warning them against working with Karin Adcock, the former president of Pandora in Australia and New Zealand. In 2013, she founded House of Brands, which recently became the exclusive distributor of fast-growing US fashion jewelry brand Alex & Ani, which competes in the same retail market as Pandora.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes website

Christie’s, Sotheby’s Combine for $1.35 Billion in 2014 Jewelry Sales

The Zoe Diamond, 9.75-ct fancy vivid blue sold for $32.6 million at Sotheby’s

Wealthy investors, jewelry lovers and businesses continue to place their money into collectible jewelry, buying up statement diamonds, gems and pearls as well as signature jewelry collections.

The world’s largest auctions houses, Christie’s and Sotheby’s, reported record 2014 results in their jewelry departments, combining for more than $1.35 billion in total sales.

The results speak of the demand for high-quality baubles as well as the economic uncertainty and geopolitical tensions throughout the world. Jewelry seems to be one of the few places where the wealthy feel comfortable placing their money.

Christie’s year was the most impressive as the auction house reports a record total of $754.7 million in 2014, saying it is the highest annual result ever achieved for jewelry at any auction house. The total also represents an 11 percent year-over-year increase. Christie’s Geneva led the company’s jewelry sales with $304.4 million total.

The results for the year included 149 jewels that sold for more than $1 million, including seven jewels that sold for more $10 million, 24 jewels that sold above $5 million and 72 jewels that sold for more than $2 million.

The Winston Blue, 13.22-carat pear-shaped fancy vivid blue flawless diamond sold for nearly $23.8 million

Christie’s most valuable sale in 2014 was The Winston Blue, a 13.22-carat pear-shaped fancy vivid blue flawless diamond, sold at Christie’s Geneva in May for nearly $23.8 million, or nearly $1.8 million per carat. It was acquired by the luxury jewelry brand, Harry Winston.

Its other biggest sale also occurred at Christie’s Geneva—this time during the November sale. The Blue Belle of Asia, a 392.52-carat Ceylon sapphire, sold for nearly $17.3 million, a record for any sapphire ever sold at auction.

Meanwhile, Sotheby’s reports that 2014 jewelry totaled $602.5 million—the third consecutive year of record sales for the auction house. The total represents a 13.8 percent year-over-year increase.

The results for the year include 77 jewels that sold for more than $1 million, with 69 percent of all sold lots exceeding their high estimates.

Among the two largest sales for 2014 was the Zoe Diamond, a 9.75-carat fancy vivid blue diamond from the collection of Mrs. Paul Mellon, which sold for $32.6 million at Sotheby’s New York in November. The stone set world auction records for any blue diamond and for the price-per-carat for any diamond, at more than $3.3 million per carat.

The other large sale was the Graff Vivid Yellow, at 100.09 carats, one of the largest fancy vivid yellow diamonds in the world. It sold for $16.3 million at Sotheby’s Geneva in November, setting world auction records for any yellow diamond and for any jewel by Graff.

The Cartier Hutton-Mdivani Necklace sold for more than $27.4 million.

Jadeite also did well for Sotheby’s Hong Kong. Its best sale in this category for the year was the Cartier created Hutton-Mdivani Necklace, which sold in April for more than $27.4 million, setting auction records for any jadeite jewel, for any non-diamond jewel and for any Cartier jewel and the second highest auction price for any jewel in 2014. It was purchased by The Cartier Collection.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes website.

Fossil 2nd Quarter Sales Up 30%

Fashion accessories designer, marketer and distributor Fossil Inc. said net sales increased by 30.6 percent to $412.6 million in the second quarter of the year. The company credits an improving global economy and an increase in watch sales as the cause for the strong results.

The Richardson, Texas-based company said gross profits for the period rose 41.7 percent $236.9 million, or nearly 58 percent of net sales. Operating income increased by 186.3 percent to $64.3 million, or 15.6% of net sales. And, net income increased by 227.8 percent to $54.5 million.

“An improving global economy, a resurgence in the fashion watch category and our laser focus to be a leader in the introduction of new materials and design innovation combined to deliver a 42 percent increase in our wholesale watch business during the second quarter,” said Mike Kovar, Fossil Inc. executive VP and CFO. “We are seeing balanced growth on a global basis and strong momentum among our major watch brands. In our FOSSIL retail and e-commerce channels, double-digit comparable stores sales, in addition to the strong performance in our Fossil brand watch sales, propelled a 28 percent increase in Fossil branded sales globally. All of this places us in excellent shape as we begin the second half of the year.”

The company, best known for its fashion watches, branded jewelry lines and leather goods, reported strong increases in watch sales globally, and to a lesser extent, the growth of the jewelry category in North America and Europe and the expansion of leather categories internationally.

Net sales from the North America wholesale segment for the period rose 37.percent, led by a resurgence in the overall fashion watch category. MICHAEL KORS, FOSSIL and MICHELE watches experienced the strongest performance. In addition, a steady flow of inventory replenishment as opposed to retailers generally de-stocking a year ago resulted in North American watch shipments increasing by 59.2 percent.

Meanwhile, North America wholesale accessory sales volumes increased 1.9 percent, primarily due to increased shipments of FOSSIL women's leather products and the expansion of the company's footwear and accessory jewelry categories, offsetting by a sales volume decline in men's leather products.

Internationally, European second quarter wholesale net sales rose 30 percent. Wholesale watch shipments increased $18.6 million, or 28.9 percent, in constant dollars, with all major watch brands contributing to this increase. Leather and jewelry categories also contributed solid double-digit increases. The largest net sales contributions were FOSSIL watches and jewelry and licensed brand watches led by EMPORIO ARMANI.

Asia Pacific wholesale shipments in the second quarter increased 28.8 percent, in constant dollars, year-over-year, led by watch and leather sales.

Direct to consumer net sales for the period rose 28 percent, or $22.5 million, on a constant dollar basis. Same-store sales gains of 15.5 percent and an 8.4 percent increase in the average number of company-owned stores open during the Second Quarter. Additionally, net sales from the company's e-commerce businesses increased 44.2 percent.

In its guidance, Fossil said it expects reported net sales to increase in a range of 25 percent to 27 percent with constant dollar net sales increasing in a range of 27 percent to 29 percent, respectively. For the fourth quarter, the company said it expects reported net sales to increase in a range of 14 percent to 16 percent with constant dollar sales increasing in a range of 18 percent to 20 percent.