Pandora Names Anders Colding Friis as CEO, Peder Tuborgh as Board Chair

Anders Colding Friis 

Danish jewelry company Pandora is going through another round of leadership changes as it plans to appoint a new CEO and board chairman in the coming months. 

The company said Thursday that it will name tobacco company executive Anders Colding Friis as its fifth CEO since the company went public in 2010. He will succeed current CEO Allan Leighton in March 2015. 

Allan Leighton

In addition, Pandora said it plans to make Peder Tuborgh chairman of its board of directors in October. He will replace Marcello Bottoli, who announced previously that he will step down due to other professional commitments. 

The Denmark-based company with manufacturing facilities in Thailand is known for its popular charm jewelry and other affordable jewelry pieces. It is also known for raising approximately $2.1 billion in its IPO in October 2010, for incredible sales growth during its first three quarters as a publicly traded company followed by a sudden approximate 65 percent decline in its stock price based on a company report that dramatically reduced its outlook. 

The company has experienced steady growth in sales and stock value since then but its top executive position continues to be in constant change. 

Peder Tuborgh

In this case it appears Leighton’s turn as CEO was planned as a temporary move. He was already chairman of the jewelry company when he replaced Bjørn Gulden as CEO in July 2013. Gulden accepted a position as CEO of athletic apparel company, Puma. Bottoli also served a stint as CEO during the company’s time of turmoil.

Friis, 51, is a Danish citizen and since 2006 has been the Group CEO of Scandinavian Tobacco Group, the world’s largest manufacturer of cigars and pipe tobacco. He also is chairman of Monberg & Thorsen, deputy chairman of IC Companys, board member of Topdanmark and Confederation of Danish Industry.

Marcello Bottoli

Leighton will step down from his role as CEO after reporting Pandora’s full year results for 2014. At the next annual general meeting, Leighton is expected to be named the company’s co-deputy chairman of the board.

Tuborgh, 51, is a Danish citizen who holds an MBA from Odense University and has held a series of management positions in Arla Foods, an international dairy company, before becoming group CEO in 2005. He is also deputy chairman of Aarhus University and board member of Royal Greenland.

“A managed succession at the top of the company, at a time when its performance and opportunities have never been stronger, has been a key objective for the board,” Bottoli said. “I am delighted with the result and to have been an active part of this.”

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Pandora’s Troubles Continue as Q2 Profit Falls 90% and Revenue Drops 9.5%

Pandora Group, home of the international silver jewelry brand that became famous for its charm jewelry, had another disappointing quarter.

The Danish company with manufacturing facilities in Thailand said that year-over-year sales for its Pandora branded jewelry fell by 9.5 percent to 1.26 billion Danish krone ($210.2 million) in the second quarter of 2012. Profit during the same period fell 89.9 percent to 63 million Danish krone ($10.5 million).

Pandora reported losses in every region it operates. The company noted that a stock rebalancing campaign launched in the first quarter is a major reason for the disappointing results, which the company said are in line with expectations. It said it received returns of discontinued products valued at 183 million krone ($30.5 million) and replaced it with 310 million Danish krone ($51.7 million) worth of new inventory.

Björn Gulden, Pandora CEO, said the company will continue with the stock rebalancing program and will cap it at 800 million krone ($133.5 million).

“The execution on the stock balancing campaign continued into Q2 2012 and was very well received by our retail partners across all our markets,” Gulden said. “Even though the stock balancing campaign, short-term, hurts our revenue, cost ratio and profitability in 2012, the campaign has proven to be the right action to help our retailers improve the quality of their stock.”

By region, revenue results are as follows:

* Americas decreased by 5.1 percent (14.6 percent decrease in local currency)

* Europe decreased by 16.6 percent (17.4 percent decrease in local currency)

* Asia Pacific decreased by 8.1 percent (14.1 percent decrease in local currency)

Branded revenue as percentage of total revenue increased to 75.3 percent in the second quarter of 2012, from 73.4 percent in Q2 2011; and gross margin was 67.9 percent in Q2 2012, compared to a gross margin of 74.4 percent in Q2 2011.

Pandora projects revenue for 2012 to be above 6 billion krone ($1 billion), down from 6.66 billion krone ($1.1 billion) in 2011.

“Feedback from our retailers on our Autumn/Winter 2012 collection has been very encouraging and with an additional 94 new Concept stores opened in H1 2012, we are on track to deliver on what we have promised the market in our financial guidance for the full year,” Gulden said.

Pandora also announced a number of organizational changes. Among them:

* Scott Burger, former COO of Pandora North America, was named president for Pandora North America, succeeding John White, who is taking up a position outside Pandora.

* Sten Daugaard, chief development officer, has been assigned to head Pandora's Asian headquarters in Hong Kong “in order to secure senior management attention to an important future region.”

* David Allen, former VP of Sales of Pandora Australia, has been named president of Pandora Australia with the responsibility for commercial operations in Australia, New Zealand and the Pacific, succeeding Karin Adcock, who retired as planned on July 1.

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Pandora Q2 Sales Down in Key Markets, Downgrades Outlook, CEO Resigns, Company Blames Price Increases and Poor Execution

Has the bubble burst for Pandora? The Danish company known for its charm jewelry announced the sudden resignation of its CEO, Mikkel Vendelin Olesen, effective immediately due to lower-than-expected growth, which the company blames on commodity price increases and “inadequate” execution.

“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,” said Allan Leighton, Pandora board chairman.

Marcello Bottoli was named the interim CEO as the company, which experienced spectacular growth in recent years and a $2 billion IPO in October, 2010, seeks a permanent replacement.

“The re-set of our affordable luxury positioning, improved operational execution and restoring growth trajectory is now the focus of our company,” Pandora said in the same statement. “This re-set will take up to 18 months to see through. In addition, the company has instigated a strategic review to test or confirm certain elements of the company strategy.”

The announcement came following the early release of a condensed second quarter earnings report Tuesday that contained negative growth rates in its biggest markets and a downgraded outlook. The financial report was scheduled to be released August 16. No reason was given for the early release and the full report will still be issued on the expected date.

The company changed its outlook from expecting a revenue growth of no less than 30 percent for 2011 and an EBITDA margin of minimum 40 percent to 0 revenues and EBITDA margins in the low thirties for the year.

After the release of the financial report, Pandora stock fell a spectacular 65 percent, according to news reports.

Pandora reported that revenue increased 3.6 percent to 1.4 billion Danish kroner ($265.3 million). In the Americas, revenue increased 16.2 percent. However, sales in the U.S., its largest market, fell by 0.7 percent. The U.S. accounted for 39.2 percent of all sales during the period for Pandora.

In Europe it was even worse as sales declined 11.9 percent. The U.K. and Germany, its two largest markets in Europe, fell 13.1 percent and 20.1 percent, respectively. The U.K. accounted for 11.9 percent of all sales, down from 14.2 percent in the second quarter of 2010. Germany accounted for 8.5 percent total group sales, down from 11.1 percent in the second quarter of 2010.

The Asia-Pacific region increased 7.6 percent for the period. However, in Australia (another large market for Pandora), revenue was down 14.6 percent.

The company implemented price increases in all markets during the first quarter except in Australia where it increased prices in April 2011. Price increases in Germany were implemented at the end of first quarter. “Our price increases introduced during H1 2011 have had a significant negative impact on our volumes in the quarter,” the company said.

Other financial highlights include:

• EBITDA decreased by 6.2 percent to 512 million kroner ($97 million) resulting in an EBITDA margin of 36.8 percent compared to an EBITDA margin of 40.7 percent for the second quarter of 2010.

• EBIT decreased by 8.3 percent to 440 million kroner ($84 million) resulting in an EBIT margin of 31.6 percent compared to a EBIT margin of 35.7 percent in Q2 2010

• Reported net profit increased by 56.1 percent to 626 million kroner ($119.3 million), compared to a net profit of DKK 401 million kroner ($76.4 million) in the second quarter of 2010. Adjusted for revaluation of the CWE earn-out provision based on revised outlook for PANDORA CWE, second quarter net profit decreased by 17.7 percent to 330 million kroner ($62.9 million).

Pandora Names Allan Leighton as CEO

Allan Leighton

Pandora said Thursday that Allan Leighton, current chairman of the jewelry company, will succeed Bjørn Gulden as CEO on July 1.

Gulden is stepping down to join sports brand, Puma, as its new CEO. Pandora’s board of directors will recommend that Gulden remain part of the company as a board member.

Marcello Bottoli, who is currently deputy chairman, will succeed Leighton as board chairman.

Bjørn Gulden

“Pandora is a great business which is performing well, but the sports industry has always been a major part of my life, and my role at PUMA will also allow my family to remain in Germany,” Gulden, a former professional soccer player said in a statement.

Leighton added: “Bjørn, Marcello, the management team and I have worked very closely on delivering on the company strategy and the board believes that continuity in that execution and understanding of the business is key to our continued success.”

The Danish manufacturer, marketer, distributor and retailer of fine jewelry is still recovering from a very difficult 2011, which saw a sudden 70 percent drop in its stock price following a less than glowing second quarter report that year. Prior to that drop the company, which designs its popular charm bracelets and silver jewelry in Copenhagen and manufacturers them in Thailand, was the darling of jewelry retailers and the investment community as it experienced spectacular growth. The company’s IPO in 2010 raised $2.1 billion.

Gulden began at Pandora in March of 2012 and by November 2012 the company, working off a stock rebalancing program, returned to profitability in the third quarter reporting a revenue increase of 14.3 percent, year-over-year, and net profit increase of 11.4 percent. However, it wasn’t enough to save the year as revenue for 2012 was essentially flat while net profit fell 41 percent.

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High Flying Pandora Returns to Earth with No Growth in 2011 Revenue

A tumultuous year for Pandora came to an end after a 10-percent drop in revenue for the fourth quarter, leaving the jewelry manufacturer and designer with a 0.1 percent decrease in group revenue to 6.65 billion Danish kroner ($1.18 billion) in 2011.

This is a far cry from the spectacular results the company, known for its silver charm jewelry, reported from 2009 until the mid-year of 2011. The bottom dropped out for the fast-growing brand—a darling of investors, retailers and consumers—with a second-quarter report released in August where the company changed its outlook from expecting a revenue growth of no less than 30 percent for 2011 and an EBITDA margin of minimum 40 percent with flat revenue and EBITDA margins in the low thirties for the year. This report resulted in the immediate resignation of its CEO, Mikkel Vendelin Olesen, and a one-day 65 percent drop in the value of its stock.

The company also announced Tuesday that it has begun a campaign to buy back unsold stock from retailers for the first two quarters of the fiscal year that will negatively affect 2012 results. The company estimates that the campaign will cost 500 million to 800 million Danish kroner.

“The campaign will encourage Pandora retailers to exchange discontinued, merchandise for appropriately priced best-sellers, on a one-for-one basis,” the company said. “(It) will likely generate a corresponding negative impact, due to cannibalization of forward sales, on reported numbers across the whole of 2012.”

Among Pandora’s results for 2011:

* Sales in Americas increased 7.9 percent (12.4 percent in local currency);

* Sales in Europe fell 8.3 percent (down 7.7 percent in local currency);

* Sales in Asia Pacific decreased by 0.2 percent (down 4.3 percent in local currency);

* Gross margin increased to 73 percent in 2011 compared to 70.9 percent in 2010;

* EBITDA margin was 34.3 percent in 2011 compared to 40.3 percent in 2010;

*EBITDA decreased by 15 percent to 2.28 billion Danish kroner ($406,503 million);

* EBIT margin was 30.9 percent in 2011 compared to 36.2 percent in 2010;

 EBIT decreased by 14.8 percent to DKK 2.05 billion Danish kroner ($366,323 million);

* Reported net profit increased by 8.9 percent to DKK 2.03 billion ($362,684 million) in 2011. Adjusted for a revaluation of the CWE earn-out provision based on a revised outlook for PANDORA CWE, 2011 net profit decreased 18.4 percent to 1.52 billion Danish kroner ($247,228 million).

In its outlook, Pandora it expects 2012 revenue growth to be in mid-single digits; gross margin in the low 60s, driven by the impact of commodities prices and a reduction in our selling prices; and EBITDA margin in the mid 20s.