Bang & Olufsen 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."
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