PANDORA, THE Danish maker of charm bracelets, lost about two-thirds of its market value in Copenhagen after cutting its full-year forecast and saying chief executive Mikkel Vendelin Olesen had left.
Pandora dropped 65 per cent, the biggest decline since the jeweller’s initial public offering in October. It has lost about 41.2 billion kroner (€5.5 billion) in market value since the stock peaked in January.
Pandora was Denmark’s largest public stock sale in 16 years.
The company, which sells silver bracelets for $65 and charms to add to them for $30 each, plans to abandon the price increases Mr Olesen implemented to combat rising commodity costs.
“Credibility and visibility is now completely shot,” said William Birch, an analyst at Jefferies International in London.
“Investors may regret ever opening this box of disappointments.”
Second-quarter earnings before interest and taxes fell to 440 million kroner, the company said, significantly below analyst expectations. Sales in July plummeted about 30 per cent.
Pandora declined 96.20 kroner to close at 51 kroner, giving the company a market value of 6.64 billion kroner. The results, published two weeks earlier than scheduled, are “totally unacceptable” and “self-inflicted”, chairman Allan Leighton said at a conference call with analysts.
Pandora was wrong to have increased prices, he added. “We have been doing that at a time when consumers have become more value conscious. We will move back to where we really should be, which is within affordable luxury.”
Pandora said yesterday that 2011 revenue won’t rise. The company previously forecast at least 30 per cent growth.
Mr Olesen has resigned with “immediate effect”. – (Bloomberg)
