Pandora led a charmed life, one out of the box, till now

Pandora led a charmed life, one out of the box, till now

DANISH jewellery company Pandora has its charms, but a 70 per cent share plunge this week serves as a reminder of how not to invest in hype.For those who don't know the company, Pandora's sales have exploded over the past few years. From humble beginnings as a small jewellery shop in Copenhagen that opened in 1982, Pandora became a global purveyor of charms and bracelets that cost from $30 up to $3000, for one made of 14-carat gold.The company floated in October 2010, with an initial public offering that was handled by Goldman Sachs, JPMorgan, Morgan Stanley and Nordea Bank.

Pandora hit the boards with a market cap of 27 billion kroner ($A3.6 billion), which lined the pockets of the sellers - primarily the private equity group Axcel and the founding Enevoldsen family.As one wag at the Alphaville website quipped this week, Pandora had ''all the ingredients for an IPO flop'' - a private equity seller, an insider seller and the involvement of Goldman Sachs.Rising gold and silver prices, coupled with mayhem in retail markets, have slashed the company's profitability. Shares that traded as high as 367.5 kroner earlier this year have reaches lows of 39.3 kroner. Chief executive Mikkel Vendelin Olesen quit as a result.charming pandora beads for enchantment you.

Think of it as a 21st-century version of investing in the hula hoop. Or the yo-yo.Amid the worst retail downturn in three decades, rumours swirled that recruitment company Egon Zehnder had been tapped to find a replacement for Myer boss Bernie Brookes.It had all the ingredients of a salacious business story. A high-profile executive, a major float, a slumping share price and cloak-and-dagger work by the board. The paper duly reported ''talk that chairman Howard McDonald has Egon Zehnder looking for replacements for chief executive Bernie Brookes''.

The problem was, the story was not true. Myer did engage a headhunter to find a new executive - for the Sidney Myer Fund and the Myer Foundation. In other words, the philanthropic arms of the retail empire, not Myer itself. The search was for a replacement for Christine Edwards, who has run the charities for the past seven years and steps down next month. The rumour mill did the rest.