Pandora CEO Friis resigns after profit warning

The jewellery maker on Aug 6 lowered its outlook for 2018 profit and sales, sending the shares down 24%

by BLOOMBERG

COPENHAGENPandora A/S CEO Anders Colding Friis will step down after the world’s biggest jewellery maker earlier this week lost almost a quarter of its market value following a profit warning.

Friis, 54, will leave as of Aug 31. The Copenhagen-based company has started a search for a replacement, while it also hired former Body Shop CEO Jeremy Schwartz as COO. The shares rose more than 10% in early trading.

Struggling to keep up growth after a rapid global expansion, Pandora on Aug 6 lowered its outlook for 2018 profit and sales, sending the shares down 24% and sparking speculation whether Friis would be able to keep his job.

The company said yesterday it was beset by a range of problems, including weaker than expected sales of new charm bracelets and rising costs.

Friis had at the start of the year sought to reset the company’s targets, seeking more “realistic” goals as its expansion slows. While he now acknowledges that he had been “a bit too optimistic”, Friis said he still believes in the strategy he had laid out for Pandora.

“I don’t have a lot of regrets when it comes to the things we’ve done together at Pandora,” he said in a Bloomberg Television interview.

The CEO’s departure will probably “be taken positively by the market as many eagerly awaited a re-shuffle in Pandora’s management team”, Zuzanna Pusz, an analyst at Berenberg, said in a note.

The company late on Monday said it expects sales to grow 4% to 7% in local currencies this year, down from a forecast of 7% to 10%. It warned its profit margin on earnings before interest, tax, deprecation and amortisation will be lower than anticipated at about 32%, down from a prediction of 35%.

Pandora has in recent years battled retail weakness in the US and this year, problems also arose in China where a grey market eroded sales and profits. At the same time, hedge funds have built short positions against its stock, cashing in on the decline.

The shares have lost an annualised 15% since Friis started in March 2015, according to data compiled by Bloomberg. That compares to a 3.1% decline in a peer group of companies.

Schwartz will come on board as COO as of Sept 1. He will jointly manage the company with CFO Anders Boyer until a new CEO is found, the company said. — Bloomberg