Tweeter Home Entertainment Group is divesting its six Bang & Olufsen retail stores.
The chain acquired the franchised stores — five in Florida and one in Phoenix —with its purchase of Sound Advice in 2001. But Tweeter's president/CEO Jeff Stone described them as a “financial drain” and said that exiting the B&O business will add between $500,000 and $1 million in operating profit in fiscal 2005.
“As Tweeter worked through its turnaround strategy [over] the last 24 months, it became apparent that having six uniquely different stores in our fleet just didn't make sense for us,” Stone said, adding that “We could not focus on them.”
Working with Bang & Olufsen American (BOA), Tweeter has already transferred two of the leases to new operators and plans to transfer two additional leases this month. The two remaining leases have been terminated, effective Sept. 26 and Dec. 31, 2004. Tweeter expects total exit costs and related charges, including lease termination fees, to be between $2.4 million and $2.6 million.