Mikkel Vendelin Olesen, chief executive officer of Danish jewelrymaker Pandora A/S, quit Tuesday after consumers rebelled against higherprices that resulted from his efforts to compensate for increased goldand silver costs.
The company posted better second-quarter salesand profits, but floundered in July and dramatically reduced its outlookfor the year. Pandora’s chairman Allan Leighton blamed the former ceofor the performance and described the company’s problems as“self-inflicted.”
Shares of the firm fell 64.5 percent Tuesday,as gold hit an all-time high of $1,664.20 an ounce.
“The ceo isaccountable for what happened and that is why he resigns,” Leighton saidon the company’s second-quarter earnings call. “This performance andthese results are totally unacceptable.”
The company declined toelaborate on Olesen’s resignation.
Leighton’s comments addressedJuly sales, which fell by about 30 percent.
Citing “poorexecution,” the chairman said Olesen, who has been replaced temporarilyby board member Marcello Bottoli, increased prices in an attempt tooffset rising gold and silver costs. But that tactic failed asspendthrift consumers kept their wallets firmly shut.
Known forits charm bracelets, Pandora, which sells its jewelry in more than 55countries, said sales would be flat this year at 6.67 billion Danishkroner, or $1.28 billion, at current exchange. Originally, the firmanticipated revenue growth of “no less than 30 percent.”
Pandoraalso said earnings growth before interest, taxes, depreciation andamortization margins would fall to close to 30 percent this year, asopposed to the minimum of 40 percent previously projected.
Second-quarterprofit totaled 626 million kroner, or $120.5 million, from 401 millionkroner, or $77.2 million, in the year-ago period. Revenue grew to 1.39billion kroner, or $268 million, from 1.32 billion kroner, or $258.6million.
Pandora said it planned on improving its pricing acrossthe board by offering more accessible entry price points, as well asdeveloping a more robust strategy to enter into emerging markets.
Foundedin 1982, the Copenhagen-based Pandora went public last year, and tradeson the NASDAQ OMX Copenhagen stock exchange in Denmark.
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