By Anthony Shevlin 
 

Electronics retailer Ceconomy AG (CEC.XE) over the weekend said Chief Executive Pieter Haas left the company with immediate effect and that Chief Financial Officer Mark Frese will continue in his role until a successor is appointed, following two profit warnings that have shaken investor trust.

Ceconomy said the company and Mr. Haas decided to part ways by mutual consent, with Mr. Frese and management board member Dieter Haag Molkenteller assuming Mr. Haas's tasks until a successor is appointed.

Mr. Frese has come to an agreement with the company that will see him continue to fulfill his tasks as a member of the management board until the company appoints a successor CFO and agrees an amicable termination of his contract.

"The process of filling the position of CEO and also the role of CFO will be initiated without undue delay," Ceconomy said in a statement.

Ceconomy's shares have fallen more than 60% since the start of the year. The decline accelerated in the past month when the company issued two profit warnings in quick succession, damaging its credibility among investors.

"In view of the latest developments there is agreement among all involved that now is the right point in time for a repositioning in terms of personnel. We are firmly convinced that this is the only way for Ceconomy to restore the trust that has been lost on the capital market," said Supervisory Board Chairman Juergen Fitschen.

On Monday, the retailer lowered earnings expectations, citing poor operating earnings at its MediaMarkt and Saturn retailers. It had cut guidance just three weeks earlier, a move it attributed to poor performance in Germany as well as the particularly hot European summer.

After Monday's warning, analysts at Bryan Garnier said the retailer now faced a 'crisis of confidence,' while Raymond James analysts flagged questions about internal controls procedures and capabilities.

"Clearly the magnitude of this warning, and coming so soon after the previous downgrade to guidance, raises further questions [...] around management and information systems in the business," JP Morgan said.

Mr. Haas had been the CEO of Ceconomy since the company's independent listing in July 2017. Mr. Frese has been the CFO of Ceconomy since July 2017.

The company said Ferran Reverter Planet, chief operating officer of the Media-Saturn-Holding, will assume Mr. Haas's role as managing director of MSH. Mr. Reverter Planet has been in his current role since 2015, the company said.

Write to Anthony Shevlin at anthony.shevlin@dowjones.com; @anthony_shevlin

(END) Dow Jones Newswires

October 15, 2018 01:46 ET (05:46 GMT)

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