Pandora's stock fell 80% when it tried to make charm bracelets into luxury jewelry

Pandora, the Danish jeweler founded in 1982, built a global business on an accessible proposition: affordable charm bracelets that customers could personalize and add to over time. Priced at $50–150 per charm, Pandora was the jewelry you bought yourself or as a gift without needing a special occasion. The company went public in 2010 in what was then Denmark's largest IPO.

Almost immediately after listing, management decided to move upmarket. New collections featured higher-end designs with gold and diamonds, priced significantly above the core charm range. The strategy was meant to elevate the brand and increase average transaction values. Instead, it confused and alienated the customers who had built Pandora's business.

The result was dramatic: Pandora's shares fell nearly 80% over 2011. On 2 August the company told the market it would not meet its forecast of 30% revenue growth — it ended the year flat, at DKK 6,658 million against DKK 6,666 million in 2010. Pandora's own account of the year is blunt about the mechanism: the price increases "had a significant negative impact on our volumes in 2011." Management reversed course, announcing selected price reductions in January 2012 and refocusing on the affordable charm business. By 2014 revenue had recovered to DKK 19 billion.