Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently..

Lee

If your compare first and second quarter reports Beoplay sales are flat.  However the core A/V product sales dropped 25% and automotive dropped 23%.

9 LEE wrote:

Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently.

Maybe I'm wrong, but I'm assuming B&O have to pay for ceasing a dealer's contract, plus buy back stock and fittings?

moxxey wrote:

9 LEE wrote:

Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently.

Maybe I'm wrong, but I'm assuming B&O have to pay for ceasing a dealer's contract, plus buy back stock and fittings?

UK seems to have a mixture of franchised dealers and dealerships directly owned by B&O UK. The directly owned dealerships are, I believe, former franchises that failed to meet targets and were handed back under the terms of the franchise contracts. So in the case of the latter, B&O will have been in receipt of a funded operation, albeit with committed running and premises leasing costs.

Leases often run on a 7 year basis, and at the end of the 7 years landlords can be stupid and demand an unrealistic increase, tipping the business into a closing situation and leaving the landlord with empty premises. Presumably, if a franchise store is owned by a limited company, it can fold and default on leasing commitments. If, on the other hand, B&O triggers the closure itself by ending a franchise, you would imagine that they should pay for fittings and other costs. If the franchise is part of a multi AV business and not exclusively B&O, then it must get complicated. I can imagine the most vulnerable stores to be those owned by B&O that are getting near to the end of their premises leases, unless, of course, they are in good locations turning in good profits.

Graham

I see B&O's profit warning is featured in The Times, today. Says they expected to make a profit in 2013, but instead will record a £23 million loss.

Says B&O is blaming a downturn in luxury goods purchasing through Europe and that it has affected B&O's expected recovery.

vikinguk wrote:

UK seems to have a mixture of franchised dealers and dealerships directly owned by B&O UK. The directly owned dealerships are, I believe, former franchises that failed to meet targets and were handed back under the terms of the franchise contracts. So in the case of the latter, B&O will have been in receipt of a funded operation, albeit with committed running and premises leasing costs.

Leases often run on a 7 year basis, and at the end of the 7 years landlords can be stupid and demand an unrealistic increase, tipping the business into a closing situation and leaving the landlord with empty premises. Presumably, if a franchise store is owned by a limited company, it can fold and default on leasing commitments. If, on the other hand, B&O triggers the closure itself by ending a franchise, you would imagine that they should pay for fittings and other costs. If the franchise is part of a multi AV business and not exclusively B&O, then it must get complicated. I can imagine the most vulnerable stores to be those owned by B&O that are getting near to the end of their premises leases, unless, of course, they are in good locations turning in good profits.

Graham

I know this was a year ago, but and if it's still open good new for emerging markets. 

http://www.youtube.com/watch?v=yEgsPwTqlrA

Guilty as charged.

I was able to negotiate a 15 % discount on a new Beoport yesterday. Just doing my bit to keep the company afloat.

Sorry all.