Pandora pain lands a fresh blow to IPOs

JEWELLERY maker Pandora was deserted by investors yesterday just ten months after it listed as it admitted spiralling sales had caused it to rip up its profit forecasts for the year.

Shares in Pandora, known for its charm bracelets, plunged a record 65 per cent after it said sales had slumped 30 per cent in July alone and its chief executive Mikkel Vendelin Olesen had resigned.

The collapse in support for Pandora so soon after its flotation will unnerve the already fragile IPO market.

Pandora’s 10bn Danish krone (£1.1bn) flotation in Copenhagen was touted as a gold standard for IPOs, with Goldman Sachs, JP Morgan, Morgan Stanley and Nordea Bank bookrunning.

Pandora’s IPO adviser was NM Rothschild, which boasts of its work on the deal on its website. Rothschild was awarded the EMEA equity issue of the year award last year by the industry specialist IFR.

But Pandora’s share price has fallen from 210 krone at flotation to just 51 on concerns over its cost base and reliance on sales of its charms.

Pandora said the sales crash came after it hiked the prices of its jewellery by more than 15 per cent to insulate it from the rising cost of silver.

But its chairman Allan Leighton, the Sky director and former Royal Mail chairman, also blamed “our own inadequate operational sales and marketing execution”.

Pandora said its full-year revenues would be flat rather than 30 per cent higher and its margin on earnings before interest, taxes, depreciation and amortisation would be “in the low thirties” per cent instead of at least 40 per cent as forecast.