Struer, Denmark –
turned around years
of losses in its latest fiscal year and announced a five-year growth plan whose
initiatives include redesigns of B&O-branded stores, entering a new product
category by the end of the year, increasing its sales volume through channels
other than B&O stores, and launching sales through its own online store.
B&O also said
it would decrease the number of B&O stores in mature geographic markets and
accelerate store openings in the BRIC countries (Brazil, Russia, India and
China).
Future store
designs will focus on integrated audio/video solutions.
The company’s
global sales of home audio and OEM-automotive audio rose 4 percent to 2,867
million Danish krone ($554.6 million) in the just-concluded 2010 to 2011 fiscal
year, with net profits hitting 28 million krone ($5.42 million) compared with
the previous year’s loss of 32.9 million krone ($6.36 million).
Operating profits
hit 59.8 million krone ($11.6 million) compared with the previous year’s loss
of 33.8 million krone ($6.53 million), and profits before taxes hit 40.1
million krone ($7.76 million) compared with a year-ago loss of 49.6 million
krone ($9.59 million).
North American
sales were up 22 percent, presumably including retail home audio sales, sales
to upscale hotels and automotive OEM.
For the current
2011 to 2012 fiscal year, the company projected sales gains of 4.6 percent and
a 150 percent increase in profits before taxes to 100 million krone ($19.3
million).
To boost sales and
profits over a five-year period, the company’s new initiatives will include an effort
to “leverage the scale and competencies of technology partners to a
significantly greater extent than is the case today,” a company statement said.
The company itself will focus more on its core competencies in sound and
acoustics to deliver more innovative products, the company said.
“By leveraging the partnerships, we will be
able to launch more successful audio and video products and increase our
effectiveness in product development, which will allow us to focus our
innovation drive on truly differentiating elements,” CEO Tue Mantoni said.
At the retail
level, B&O will redesign its stores to “create a more dynamic and engaging
customer experience” in B&O-branded shops around the world. “Whereas our
retail concept was revolutionary 10 to 15 years ago, today there is a
disconnect between our innovative and beautiful products and the look and feel
of our shops,” said Mantoni. “We want people to come into our shops, feel
welcome, play with our new products and get truly excited about Bang & Olufsen
and what we offer.”
Although
independently owned, B&O stores are staffed by “enthusiastic and
knowledgeable retailers deeply passionate about Bang & Olufsen products,” the
company said in a statement. “Bang & Olufsen will find ways to convey this
passion in an even stronger way to the customers and demonstrate the fantastic
experiences that people can have with our products.”
A spokesman
declined to offer many details about plans to further expand worldwide sales
outside the B&O-branded store channel other than to point out that the
company signed an agreement to sell some products through Apple stores in
Europe to complement already established distribution through select Apple
stores and Apple’s online store in the U.S.
In the U.S.,
B&O has been selling its BeoSound 8 iPhone/iPad speaker system and BeoLab 4
PC speakers through about a dozen Apple brick-and-mortar stores and through
Apple’s online store. “Whether other distribution channels in the U.S. will be
included in the future, I cannot comment further on that,” he said. “But I can
mention that Bang & Olufsen in a few months is launching its own Bang &
Olufsen-branded digital online shop.”
The B&O online
store will be one of the outlets for the unnamed new product category that the
company will enter by the end of the year. The other outlets for the category will
include B&O stores and “complementary retail channels,” the company said in
a statement.
