For a company that makes it money selling charm pandora charms uk bracelets, Danish jewellery firm Pandora has only brought investors bad luck.A shock profits warning sent the shares into freefall and even an arm load of its shamrock, laughing buddha and angel-shaped talismans could not have changed the fate of Mikkel Vendelin Olesen, its chief executive, who resigned with immediate Pandora Beads effect.The shares, worth more than £25 when the company floated last autumn, plunged nearly 70% to touch a record low of 39.30 kroner (£4.61) after the Copenhagen company scaled back its sales and profits targets for the year.BGC Partners market analyst Louise Cooper said the misfiring company was now in pole position to win the prize for "worst IPO in the last 12 months".That tag is embarrassing for the jeweller's high profile British chairman Allan Leighton – the former boss of Asda and the Royal Mail who is also on the board of BSkyB – who described the dire figures as "totally unacceptable".
In a damning critique of what has gone wrong Leighton blamed the once-feted and fast-growing Pandora Bracelets company's loss of form on "poor execution" and successive price increases which alienated an increasingly hard-up mass market customer base.The listing of the private equity backed business on the Copenhagen stock exchange last October was celebrated at Pandora Charms the time. The shares gained 25% on their debut and demand for the stock resulted in twice the normal daily turnover for the entire bourse.But it was a different story in Tuesday's unscheduled update, when Pandora warned that sales would no longer grow at 30% but be at the same level as in 2010. Indeed sales in the US and the UK – two of its most important markets – declined in the second quarter.The company had been "over-hyped", said BGC's Cooper, and she suspected there would be some "red faces" in the City: "Despite soaring silver prices, weak consumer spending and a faddy product, 10 out of the 12 analysts who covered the stock rated Pandora as a buy. I wouldn't want to be making those calls to fund managers and investors who bought the stock recently."
To the uninitiated, the jewellery firm, which started as a Pandora Earrings Copenhagen shop in 1982, is best known for its charm bracelets or "Pandoras" which generate more than 80% of sales and have been flying off their velvet display pads for much of the last decade.Aimed at a broad church, the bracelets come in pink leather for £45 or in gold with a price tag of £1,100. The charms range from £20 for a silver frog to £720 for a 14 carat gold crown. There is also a Pandora "club" website where devotees can assemble a Pandora Rings virtual jewellery box of purchased and coveted trinkets.Some analysts had previously pointed to Pandora's reliance on a single product not least given the backdrop of a soaring gold price, which touched a record high last week. "No one in their right mind can say Pandora looks like a company in control," said Jyske Bank dealer Kim Seidelin.Leighton, who has a major turnaround on his hands at struggling set-top box maker Pace, said acting chief executive Marcello Bottoli would lead a 60-day "deep dive" review of the business while he worked on a longer range "hot house" strategic review aided by consultants.The main thrust, however, would be to reposition the brand firmly in the mass market and to cut prices."We are not a luxury goods business," said Leighton. "If we start to pretend or think we are a luxury goods business, we've got a problem."
$12.29 (04/25/08)
