Embattled luxury audio brand Bang & Olufsen has suffered a massive sales plunge as its “innovative products” fail to make an impact on consumers causing revenue to plummet 14%.
CEO Henrik Clausen says that the company has “a great deal of work ahead of us” to make up sales loss.
Weak demand in Europe especially hurt the results and television sales, in particular, are suffering.
According to reports, consumers have been put off by the extortionate prices of the audio brand’s high-end televisions, like the US$15,000 BeoVision Eclipse TVs.
Bang & Olufsen’s revenue has fallen as far as 14% in its latest fiscal year, ended 31 May — the company had expected a fall of 10% — and earnings were narrower than predicted.
Free cash flow was negative DKK 275 to 300 million (A$59.44m to A$64.84m) in the fiscal year, compared with the DKK 200 to 250 million (A$43.23m to A$54.03) the company had expected.
Despite the losses, Clausen remains optimistic that the company can return to profitable growth in the coming year thanks to the “innovative products” released in the past year.
“Despite a disappointing development the past quarters, it is important to stress that we have come a long way with the transformation of Bang & Olufsen,” Clausen said.
“All in all, today we have a profitable business despite the current growth challenges. But we are far from finished with the transformation and know that we still have a great deal of work ahead of us.”
The company will release its annual report for 2018/19 on 11 July 2019.
