Bang & Olufsen loses value over lower sales forecast

Bloomberg

Bang & Olufsen A/S lost more than a quarter of its market value after the Danish maker of luxury TVs and stereos warned sales won’t grow this year
because of distribution snafus.
The shares sank as much as 28 percent, shrinking the company’s value to 4.4 billion Danish kroner ($674 million) and heaping pressure on Chief Executive Officer Henrik Clausen. The hi-fi maker is worth a third of the value at its peak in 2006.
The mishap is the latest blunder by Bang & Olufsen, which has struggled to keep up with consumers who have been switching from bulky stereo systems in their living rooms to portable music players and headphones. As CDs and rec-ords get relegated to attic, B&O has come up with new products such as Bluetooth speakers,
but the company hasn’t been agile enough in modernising its distribution network.
B&O expects revenue will stagnate in the full year, compared with an earlier forecast for growth of more than 10 percent, according to a statement sent by the Struer, Denmark-based company.
Bang & Olufsen is suffering in almost all its markets. The company has been switching to a more direct sales model in Europe and the Americas that includes e-commerce, which isn’t yielding many benefits yet. The company also suffered delays from a new logistics partner in those regions.