Mark Vadon, who cofounded Blue Nile after an unsatisfactory experience in a jewelry store, is stepping down as chairman of the company and from its board.
After Dec. 31, Vadon will no longer have a formal role at Blue Nile, company spokesman Josh Holland said. He will be succeeded as chairman by current CEO Harvey Kanter.
In a conference call after the release of its second quarter financial results on Aug. 1, Kanter said that Vadon’s decision to step down was a “reflection of the strength of the management team,” and the company plans no change in its strategy.
A filing with the Securities and Exchange Commission said that Vadon’s decision “was not tendered in connection with any disagreement with the company on any matter relating to the company operations, policies or practices.”
In 1999, Vadon, a former Bain and Co. consultant, told JCK that he was spurred to get into the diamond business after having an unsatisfactory experience in a jewelry store.
“I was out shopping for an engagement ring a year ago,” he said. “I went on the Internet trying to get information and ran across Internetdiamonds.com. I got a fantastic ring, and it was just a very good customer experience, and I was intrigued with the model.”
He eventually bought the business and rebranded it Blue Nile.
Vadon had been CEO of the company since its inception, but in 2008, he ascended to the post of executive chairman. In 2011, following the resignation of CEO Diane Irvine, he took on a more active role in the company.
Vadon’s departure comes as the company reports impressive sales growth and better profits.
Net sales for the second quarter (ended June 30) increased 18.7 percent to $108 million, compared to $91 million for the period last year. Operating income totaled $3.4 million, and net income was $2.2 million. Net income for the second quarter lin 2012 was $1.6 million.
“This is our fifth consecutive quarter of consecutive revenue growth,” Kanter said on the conference call. “We continue to set records in the number of people buying engagement rings.”
During the conference call, Kanter talked up the company’s “band matcher” program, which lets consumers get matching wedding bands with their engagement rings. He added the company continues to have success in mobile platforms and social media.
“We continue to believe that we serve the next generation of consumers better than our competitors,” said CFO David Binder. “We think we can be really ahead of the industry.”
After Vadon—also cofounder and chairman of baby and kid flash sale site Zulily—steps down, the size of Blue Nile’s board will be reduced from nine members to eight. Blue Nile will continue to have a lead independent director.
“Mark revolutionized the diamond industry and founded Blue Nile on the principle that there is a better way to buy diamonds and fine jewelry by offering unique online tools, high quality diamonds, and incredible values,” Kanter said in a statement. “That is and will always be his legacy, and the company will continue to execute his vision and bring the Blue Nile advantage to consumers.”