Crikey I’ve missed some great stuff. How did Brexit get into the thread?

I find it disappointing that this thread has become attacking - or so it seems - towards the current owner of the Bath/Cardiff stores. Personally I wish them every success in selling and hope the demise of B&O (as I see it) doesn't affect their own personal life too much. £400k is a significant amount of money that could have a detrimental effect to a business owner and their respective family and I certainly wouldn't wish that on anyone. I do firmly believe now though that B&O as we traditionally knew them are finished and dead in the water. Sad times but they have done it to themselves with extremely poor decision making over the last 10 years and products and software that just don't stack up.

Get out while you can. I said this earlier on in the year and say it again now. There is no more Bang & Olufsen, only BeoPlay.

Simon.

Is Richard the owner?

Some of his comments ref retail etc were fair enough but as a new poster his attitude toward other posters absolutely stank!

Puncher wrote:

Is Richard the owner?

Some of his comments ref retail etc were fair enough but as a new poster his attitude toward other posters absolutely stank!

Judging by his posts and those of two years ago I would say that he's either the owner or very closely connected.

My previous post landed at the bottom of the last page....... it's the franchise that's for sale according to Daltons. That being the case isn't there a huge risk that if you do not meet the annual franchise targets set by B&O, they take you over and/or close the store, so your £400K is lost?

Graham

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Richard wrote:

This is the trouble when people who don't really understand business start discussing business. If you pay £400K for an asset it remains an asset and you are not looking to recover that £400K via profit. Profit is profit. The value of he business sits in the balance sheet as a positive and you'd recover the £400K by selling the asset on again. A business like this is worth it's fixed assets, goodwill plus a multiplier of previous profits. 

Brilliant. Assumptions. You're talking to quite a few successful people on this board - I don't run an international business with no idea of understanding how to operate a business.

What asset do you gain for £400K, exactly? The building is leasehold and you obtain no stock. Where's the value in the £400K? And you're assuming you can simply sell the business as an ongoing concern.

Frankly, you don't know what you're talking about.

Hi Richard,

B&O enthusiasts here can also be the harshest critics. Concerning risk, I personally know of a franchise loss and eventual closure by B&O due to targets not being met. I don't expect open discussion here about the detailed arrangements of a particular store, but isn't potential franchise loss a risk to be considered in a purchase?

Graham

vikinger wrote:

Hi Richard,

B&O enthusiasts here can also be the harshest critics. Concerning risk, I personally know of a franchise loss and eventual closure by B&O due to targets not being met. I don't expect open discussion here about the detailed arrangements of a particular store, but isn't potential franchise loss a risk to be considered in a purchase?

Absolutely. And bear in mind a) the two previous Bath stores went bust (which would indicate to me that Bath is a tough market) and b) the current store has only been in business 2 years - since 2015. And the owner wants to sell up. Most business owners don't sell if they see a profitable future.

Like I said in an earlier post, if the turnover is £700K/year and you make on average 25% profit, then the gross profit is only £175K/year. Take into account the rent on the building, wages and other daily costs, the profit won't be much more than about £75K/year.

So, with the up-front £400K (minus stock cost), you have to be in business for a good solid 5-6 years to make it a viable purchase: and bear in mind a) the previous two Bath stores went bust and b) current owners wants to sell after 2 years of trading.

Richard wrote:

I'm sorry if that's blunt but when you have people discussing business valuations with no understanding of risk and reward or even a balance sheet and profit and loss account it's a frustrating read. 

Hello Richard,

I just google-image reverse searched your avatar, and it's now clear I cannot question your understanding of business. However, you're in the open now and are fair game to have your brain picked.  :O)

Surely you'd be looking forward when valuing a business?  My combined turnover in 2013/14 was over £1m, with a GP of around 35%.  Valuing my business back then, with lots of merry projections, would have been great to see. In hindsight I should have tried to sell the business right then, but future-vision goggles weren't invented back then. If anyone has a pair, can I borrow them please?

Anyway... March 2017, and my turnover was set to be less than a fifth of that, with five figure losses every month.

Same business. Same product. Same level of service from my company. Nothing changed... apart from B&O. Something out of my control.

People's perceptions of it changing, multiple stores closing, pitifully poor advertising, demand evaporating, and the brand as a whole simply going off people's radar.  Despite my best efforts, I couldn't carry on.

So what to look at is not where a business has been, but where it's going. Surely?

Someone with over half a million pounds to spend would (if they had a shred of sense) look at how many stores have failed, the brands direction, the current and future direction of high-end consumer electronics, and that of B&O as a company?  After looking at those, would it look like a shrewd investment?

I'd genuinely be very interested to hear your views from another standpoint, and that's not from an argumentative perspective. 

Lee

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