Pandora CEO Resigns as Sales Disappoint

RAPAPORT… Pandora CEO Anders Colding Friis has stepped down after
second-quarter sales missed the jeweler’s expectations and forced it to cut its
outlook for the year.

Global sales were flat year on year at $749 million (DKK 4.82
billion) for the April-to-June period, the Danish charm-maker reported
Thursday. Revenue in the US fell 12% in local currency, while sales in the
wider Americas region decreased 6%.

Pandora noted weak demand for its charms, as well as a soft
performance in the wholesale division due to reduced inventory.

”New rings, earrings, neckwear and bracelets delivered
growth as expected, but the new charms are not fueling the reignition of charms
revenues as anticipated,” the company said.

Asia-Pacific revenue performed better, climbing 11% in local
currency to $177.5 million (DKK 1.14 billion). That rise was mainly due to China, where
sales increased 29% in yuan as the jeweler opened new stores in the area.

Pandora now expects sales growth in the 4%-to-7% range, versus earlier guidance of 7% to 10%, it said earlier this week. In an
effort to increase profitability, Pandora will also lay off nearly 400 workers,
primarily from its manufacturing center in Thailand, it added. Global net
profit fell 4.7% to $162.3 million (DKK 1.04 billion) in the quarter.

Jeremy Schwartz will join Pandora as its new chief operating
officer on September 1, and will jointly manage the company alongside chief
financial officer Anders Boyer until it finds a replacement for Colding Friis (pictured).

Pandora expects to open approximately 250 concept stores
during the year, up from the previously planned 200.