Pandora CEO resigns as profits fall
Pandora¬ís chief executive Mikkel Vendelin Olesen resigned yesterday as the Danish jewellery retailer drastically cut its outlook for 2011.
The company said its Board of Directors had updated its financial expectations following a sharp revenue deterioration in late Q2 and a worsening of trading conditions in July, where revenue declined by approximately 30% year-on-year.
Pandora said its guidance for 2011 had changed from revenue growth of at least 30% and an EBITDA margin of 40% to revenue in line with 2010 (6.67 billion Danish kroner) and EBITDA margins in the low thirties.
The company has been struggling following the introduction of global price increases in an attempt to offset soaring gold and silver prices.
Pandora said that poor sales, marketing and operational execution had also been a contributory factor.
Allan Leighton, Chairman of the Board said: “Although our price increases combined with some destocking are significant contributors to our slowdown in sales and profitability, our own inadequate operational sales, and marketing execution is as big a factor.”
The news wiped nearly two-thirds off the company's market value. The shares, worth more than £25 when the company floated last autumn, dropped nearly 70% to a record low of 39.30 kroner (£4.61).
Vendelin Olesen, who resigned with immediate effect, has been replaced by current Board Member Marcello Bottoli will become interim CEO whilst the company seeks a permanent replacement. Bottoli was previously chairman of Louis Vuitton and is a former chief executive of Samsonite.
Founded in 1982 by Danish goldsmith Per Enevoldsen and his wife Winnie, Pandora sells jewellery, including its signature charm bracelets, in 55 countries.
The news comes less than a year after the IPO which gave the company an initial market capitalisation of about DKr27bn.
Pandora said it was now focussing on the re-set of its affordable luxury positioning, improved operational execution and restoring its growth trajectory although this process would take up to 18 months to complete.
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