Pandora’s Purge of Top Ranks Moves a Step Closer to Board Level

Pandora A/S has spent 2018 purging its upper ranks, including getting rid of its chief executive and its chief financial officer.

The question now is what’s in store for its board, which oversaw an abysmal year in 2018 as shareholders in the Danish jewelry maker suffered a 61 percent slump in value, the worst in seven years.

The company’s share-price decline -- equivalent to more than $7 billion in lost market value -- is even worse even than the 47 percent slump at Danske Bank, which is under criminal investigation for being at the center of Europe’s biggest ever money laundering scandal.

Pandora said on Dec. 20 it wants two new people to join its board, bringing the number of members to nine. The proposed additions are John Peace, who used to chair Burberry Group, and Isabelle Parize, who was CEO of Parfumerie Douglas.

Analysts are now trying to figure out what the changes mean for the current Pandora chairman, Peder Tuborgh.

Tuborgh “needs to look long and hard at his own position,” Per Hansen, an investment economist at Nordnet, said by phone.

He “has been unable to stabilize the stock price and there have been many days under his watch where the company has been humiliated on the stock market,” Hansen said. “It’s not unrealistic that Peder Tuborgh plans to hand over the chairman post to one of the new candidates, perhaps late in 2019.”

Pandora declined to comment specifically on Tuborgh’s position, saying it’s up to the shareholders to decide on board members at the next annual general meeting. “The normal procedure is that the board only after the AGM decides on its composition and designates the various roles,” Johan Melchior, a spokesman, said by email.

Shareholders will vote on whether Peace, 69, and Parize, 61, can join Pandora’s board in connection with the March 13 AGM. They’re both set to start working for Pandora as advisers on Jan. 1.

Janne Vincent Kjaer, an analyst at Jyske Bank, says it’s clear that “Pandora needs people who can help it focus on improving the performance of the existing stores.” That’s because the company no longer has the same ambitious expansion plans it had when it wanted to take over all its big franchise holders, she said.

“Pandora is in a situation where it now needs some other skill sets,” Kjaer said.

Copenhagen-based Pandora, which makes more pieces of jewelry than any other company in the world, has struggled in both the U.S. and China, two of its most important markets. In the U.S., Pandora is dealing with the same retail issues that others in the industry are being pummeled by. In China, the company has been fighting cheaper imports. Failure to address those issues adequately led to Anders Colding Friis being fired as CEO in August. Pandora hasn’t found a replacement yet, and no deadline for doing so has been set.

“It probably doesn’t make sense to change the chairman in a situation where the company is also still looking for a new CEO,” Soren Lontoft Hansen, an analyst at Sydbank, said by phone.

No matter what happens, Peace and Parize will help Pandora “drive a well-known brand in an unpredictable and challenging retail market,” he said.

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