Big bang at Logitech: the old boss resigns immediately – the share price collapses

Bracken Darrell feels comfortable on Linkedin. The American is one of the CEO types who like to share their insights – private or business – with their online community on the platform. His last post from Wednesday morning deals with both personal and business matters. Because the former director of the French-speaking Swiss manufacturer of computer accessories Logitech is leaving. Immediately.

“After 11 years, today I’m announcing my departure from Logitech,” writes Darrell, starting with a list of his accomplishments during this time. The company’s market value has increased tenfold, the video conferencing business is now the leader, computer game sales have grown from $40 million to $1 billion, and the once-dormant desktop business is now worth more than $2 billion.

“Today I’m Going to Play Basketball”

After a long thank you, the always easy-going 60-year-old finally hints that he’s taking on some new adventures soon: “I’m going on new adventures soon… but tonight I’m going to play basketball.”

It is doubtful that everything was really sporty when Darrell left. So it remains unclear where the American is going now and whether this has led to disagreement with the board of directors. Since 2019, it has been managed by American Wendy Becker, who also holds British and Italian passports. There is also no successor for Darrell. Instead, board member Guy Getch will take over on an interim basis.

In addition, Darrell emphasized in almost every interview to the last that he didn’t know why he should leave Logitech. He loves his job. An insider, meanwhile, does not believe in a hasty exercise: “Bracken always said he would stay for ten years, now it has become eleven. His interests extend far beyond the dimensions of the company, so it is quite possible that he will do something completely different.”

Star influencers and emojis

Darrell was also popular with investors – and successful. Before taking over the executive chair at Logitech in 2013, the mouse group had to contend with headquarters in Lausanne and Silicon Valley.

Darrell, the father of three adult children and consumer goods companies such as Procter & Gamble, Braun and Whirlpool on his resume, managed to give the brand a modern image by focusing on strategy and prioritizing design. For example, Logitech recently launched a colorful keyboard with integrated emoji buttons instead of numbers. And in advertising, Darrell relied on stars like American singer Lizzo.

However, the actual booster took place without Darrell doing anything. The corona pandemic caused unprecedented sales growth, because office workers all over the world installed themselves in the home office and needed mice, screens, keyboards or headphones to do so. And Logitech was there. Sales increased so much that the company, with offices in more than 30 countries, even drove the traditional Swiss company Swatch out of the Swiss Market Index (SMI), which reflects the price development of the 20 most valuable and most traded stocks on the Swiss stock exchange. This also boosted Darrell’s annual salary, which was recently around $10 million.

But the setback was inevitable, because at some point all home offices were set up. But Darrell was not deterred even after the first signs of it: “I’m definitely very optimistic about long-term growth,” he said in an interview with this newspaper two years ago.

minus 22 percent

Only: the numbers recently spoke a different language. From January to March, turnover this year fell by 22 percent to 960 million francs. In the previous quarter, the minus was 22 percent. Because in addition to the fact that the need for mice and keyboards decreased after the pandemic, the company felt the economic environment with supply bottlenecks and inflation weighing on consumer confidence.

This had consequences not only for turnover, but also for profit. This, at the EBIT level, recently fell by 47 percent. “Despite the drop in sales, we are significantly larger than before the pandemic,” said Darrell. But the forecasts for the further course of events are also based on contraction.

On the Swiss stock exchange, the share price of Logitech fell by about 9 percent on Wednesday morning to less than 53 francs. In the spring of 2021, shares reached an all-time high of CHF 125, after quickly rising to this level in the wake of the pandemic.

Will the expulsion from the SMI follow?

Logitech’s market capitalization is now only about 9 billion francs. This is by far the lowest value of all SMI companies. It would therefore come as no surprise if the Index Committee of the Swiss stock exchange decided in mid-July to replace Logitech in the SMI with another stock. For example, the shares of the dental implant manufacturer Straumann have been waiting for a rise for some time.

The computer mouse pioneer still has some 300 employees at Logitech’s Swiss headquarters on the EPF campus in Lausanne. There are more than 600 in Newark, the San Francisco Bay Area and other locations in the US. Overall, Logitech has more than 8,000 employees. The computer accessories are manufactured in China, among others – in Suzhou and Shanghai. Founded in 1981, the group produces around 150 million products annually and sells them in more than 100 countries. (aargauerzeitung.ch)