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Bang & Olufsen Back Opening Shops Despite The Business Struggling

Bang & Olufsen is back doing what they did badly in Australia, opening their own retail stores in an effort to flog their expensive Danish sound gear.

Dumped by Melbourne based Aquipa due in part to retailers not wanting to stock their cheap consumer products, B&O share are down over 83% over the past five years from when they operated their own network of stores in Australia.

In the past month, the stock has fallen 15.5% and over 60% during the past year as the Danish Company moves to try and get traction back in the luxury products market by opening a store in Melbourne with another store set to open in Adelaide shortly.

Back in 2018 The Kennedy Group bailed out of their retail relationship with Bang & Olufsen with sales of all the Danish Companies products moved to Singapore based distributor Design Collection Denmark.

At one stage the Melbourne based Kennedy Luxury Group operated 10 stand-alone Bang & Olufsen stores in Australia and New Zealand but after poor sales and limited investment from the Danish Company they decided to out of all of them as leases become due.

The Danish Sound Company was initially set up in Australia by Melbourne based Andrew Donaldson in 1986. A Company that I owned at the time conducted the first ever PR launches for Bang & Olufsen.

Back in April, Bang & Olufsen announced the opening of a new 380 square meter Australian flagship store in Melbourne which they claimed was the first Bang & Olufsen store in Australia to introduce a new concept for the space, designed to showcase the Connected Speakers range of at-home products in a sophisticated setting, complete with an on-site café.

The only difference from previous stores is the introduction of a cafe said one premium audio dealer in Melbourne.

There is one big plus the on-site café will only offer coffee “sourced from regions across the globe” claims Danish Collection Denmark the operator of the Bang & Olufsen stores.

Recently Simply Wall Street analysts described the share slump in B&O stock as an unpleasant experience for long term holders.

They claimed that ‘some of the more recent buyers are probably worried, too, with the stock falling 41% in the last year’

They said that shareholders have had an even rougher run lately, with the share price down 39% in the last 90 days.

They added “While a drop like that is definitely a body blow, money isn’t as important as health and happiness”.

In Sydney Len Wallis is still selling Bang & Olufsen products despite the Swedish Company competing directly with retailers.

Analysts claim that recent sales increases are not enough to turn the business around.

Simply Wall Street claims “While the broader market gained around 19% in the last year, Bang & Olufsen shareholders lost 41%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade”.

Several analysts are warning shareholders about investing in the struggling business.



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