Pandora fires CEO after profit warning
COPENHAGEN: Danish jeweller Pandora A/S ousted its chief executive officer yesterday to try to regain investor confidence after the company said this week it would cut jobs and warned on profits.
Shares in Pandora, known for its silver charm bracelets, rose as much as 9% on the news and as it appointed former The Body Shop CEO Jeremy Schwartz to jointly run the company with newly-named chief financial officer Anders Boyer in the interim.
The shares had plunged by more than 15% since the company cut its 2018 sales growth outlook to 4-7%, and its EBITDA margin outlook for the year to around 32% on Monday, the latest in a slew of bad news.
The profit warning came just seven months after CEO Anders Colding Friis, who has been criticised by investors for poor communication during his threeyear leadership, set out the goals as part of Pandora’s strategy towards 2022.
He is the second top executive to quit the company after CFO Peter Vekslund resigned earlier this year after the firm missed its own 2017 sales forecasts and said margins would be thinner.
The company is also struggling to gain market traction for new charms for its bracelets.
“It’s the board’s decision,” a Pandora spokesman told Reuters when asked whether it was Colding Friis’ decision to step down.
He added the decision was taken at a meeting in the morning but would not be drawn further on the sequence of events this week. Colding Friis could not be immediately reached for comment.
Pandora sells customisable jewellery such as charms, bracelets, rings and pendants, at a lower price than competitors like Swarovski.
Prices for its newest collection, Shine, range from $20 for a charm to $200 for the most expensive bracelet, prices from its US online store showed.
Pandora acknowledged that the new strategy it launched in January, aimed at rectifying a lack of innovation and weak growth in key markets, was not progressing as fast as expected.
“It has especially been challenged by consumers buying fewer charms per bracelet,’’ Boyer told Reuters. “We had expected we could reverse that trend with all of our new products, but that hasn’t happened yet.”
Sales of charms, the backbone of Pandora’s jewellery assortment, declined 7% in the second quarter. Sales of other jewellery in its new Shine collection, launched in March, had been well received, it said.
Pandora confirmed preliminary second-quarter sales of 4.8 billion crowns and an EBITDA margin of 31.1% released on Monday in connection with the profit warning.
Boyer stuck to the company’s midterm target for the period until 2022 for an EBITDA margin of 35% and sales to increase by 7-10% per year in the period, which was announced in January.