Bang & Olufsen has been a long time, basket case in Australia with their latest financials revealing that revenues in the region are again down with lastest quarter revealing a 20% slump and dealers overstocked with inventory.
ChannelNews has been told that the Singapore based distributor of the B&O product range who currently operate a retail store in Melbourne is set to be close their Prahran store with the business currently considering a move to a consignment model for retailers selling their products.
but despite this the business has lifted their margins in products being ranged by the likes of Sight & Sound Galleria in Melbourne and Len Wallis in Sydney as well as their own stores in Sydney and Melbourne.
The business that saw APAC revenues fall from A47M to $37M a fall of over 20% in the last Quarter, is still trying to flog $30,000 TV’s in Australia which is a tad down on their disastrous Bang & Olufsen $40K TV’s that they tried to sell in the past via Bang & Olufsen partner stores that were closed down after a falling out with a local operator.
In the specialist channel it’s Loewe and Sony TV’s that are proving popular.
B&O margins in APAC were dramatically lifted this year from 28.8% to 48.9% according to their latest financials.
Investors in the Danish audio Company have been waiting fifteen years for a “turnaround” after years of uninterrupted decline in sales.
Despite poor management and products that struggle to sell through, B&O’s directors have refused to sell to Chinese billionaire Qi Jianhong.
In Asia Pacific China accounts for 54% of revenues and that market is tanking for the European Company.
APAC revenue fell 20.9% while the Chinese market declined by 26%.
The Company claims in their latest financials that their APAC channels declined in the last quarter, with “high inventory levels” contributing to the downturn.
The only real good news in recent months comes from an operating from the fact that the business is not haemorrhaging losses due in part to the normalization of production costs.
Observers are now questioning whether the Danish business still has a role to play in the audio and home entertainment market due to what’s been described as a plethora of well-made competitors?
“Its design culture and premium positioning set it apart, but its brand – once synonymous with prestige and precision – has largely lost its cachet with consumers, in price ranges that are hard to justify against alternatives of equivalent quality” claims one analyst.
