General Forum

Re: I'm thinking about applying to open a B&O store...

Greg — Sun, 06 Jul 2008 13:39:41 GMT

355f:
There is another aspect.
B&O historically had a product range that lasted for years but im not sure the high tech revolution has done the dealers many favours.
With flat screen technology moving so fast the prices of previous models falls in a dramatic way- what was a non HD BV5 worth - 12800 new - less trade discount. But to dispose of this the realistic value- 60% less. This is replicated throughout the flatscreen range.
So almost all dealers are discounting heavily to get business, which means it will be difficult to ask full retail, then one has to sell a lot of tvs to cover the losses on outdated stock.
In my opinion the game has moved on, B&O want to much money up front, demanding sites that are to expensive for the available business now. In fact they need to reduce the number of dealers in the UK by some margin as the new sales figures will not support the business as it once was.

You make some really, really spot on points here. A key aspect of B&O's appeal (to me, at least, and I suspect to many customers) was that they were rarely if ever first to market with a new technology, but would wait for it to 'bed in' and then come to market with a very good implementation, with very high build quality, which would last for years and be sold in more or less the same form for many years. This philosophy, while still appealing in some respects, is perhaps fundamentally at odds with the vastly increased rate of technological change in this industry over the last 5 years.

Having said that, I think there's a certain amount of 'tech fatigue' among consumers - I believe part of the slow uptake of blu-ray has been that consumers have already had to move from VHS to DVD, from CRT to LCD/Plasma, from non-HD to HD or Full HD. They also have to choose Sky or Freeview or Freesat or DVD recorder or HDD recorder or PC Media Centre or Apple TV or Location Free or Slingbox or.... it's become such a fast paced and complex world that I believe we're reaching the limits of consumer's appetite for change.

Also, the kind of changes that might happen in the next 5-10 years, and the hardware requirements for them, have already been amply telegraphed (e.g. adding gigabit ethernet and N wifi, with ability to play HD content from the internet or - B&O - home media server).

A bluray-capable DVD drive, 5 HDMI ports, and very high quality surround (with ability to decode HD audio formats) - even the ability to outsource audio processing to the anticipated new 'audiophile' B&O audio system - these things should be a given.

A company like B&O, if its new management are sharp enough, should be able to deliver something quite special that is probably future proof for 5-10 years.

Then, I think, there's scope for future business to sustain or create the right quality of dealership in the right places with the right customers. Agreed some existing dealers may go. I don't really believe that B&O are looking to take on more franchisees than they'd like, just to bank the franchise fees and put the stocking merchandise down as sales... surely the brand is too valuable to do that??

Re: I'm thinking about applying to open a B&O store...

355f — Fri, 04 Jul 2008 11:12:44 GMT

There is another aspect.

B&O historically had a product range that lasted for years but im not sure the high tech revolution has done the dealers many favours.

With flat screen technology moving so fast the prices of previous models falls in a dramatic way- what was a non HD BV5 worth - 12800 new - less trade discount. But to dispose of this the realistic value- 60% less. This is replicated throughout the flatscreen range.

So almost all dealers are discounting heavily to get business, which means it will be difficult to ask full retail, then one has to sell a lot of tvs to cover the losses on outdated stock.

In my opinion the game has moved on, B&O want to much money up front, demanding sites that are to expensive for the available business now. In fact they need to reduce the number of dealers in the UK by some margin as the new sales figures will not support the business as it once was.

Re: I'm thinking about applying to open a B&O store...

Greg — Fri, 04 Jul 2008 10:53:13 GMT

First of all, thank you so much to all of you who've given this great input. The initial information from B&O arrived in the post this morning, so I will review it all over the weekend and give it a lot of consideration! I will certainly keep you posted and will pick up with one or two of you offline which I hope is OK!

If I go ahead, it would be in an area I know well which is pretty affluent, and a reasonable density of population, but not already well served by existing stores (but not Plymouth, sadly - although the seaside is quite appealing!). As for salespeople, I would look to 'poach' some people I have already worked with at a well-known retailer of computers and mp3 players (and more recently phones). I also have someone in mind for the installation team, and have a reasonable level of tech and finance experience having done various systems management jobs in investment banks.

I guess what does worry me somewhat is the financial exposure - not sure I could afford to lose it all.

Anyway, more consideration required... I'm still far from certain it's a good idea!

Thanks again,

Greg.

Re: I'm thinking about applying to open a B&O store...

BMGHB — Thu, 03 Jul 2008 09:22:31 GMT

Hi Greg,

We will se in a couple of years whether you were insane or not!

I have just bought my own Bang & Olufsen store and i am willing to help you with some advice and tips.

First of all i hope that you know that this is the worst possible time open an Bang & Olufsen store ie. the world economy. EVERYONE can feel irt right now. Second; are you ready to drown yourself in papers en masse? the daily operation of a Bang & Olufsen store involves a lot of computer/accountant knowhow Third; are you ready for the econimical strees that will surface sometimes?

Then ask yourself these questions:

How many potential customers are there where you plan to open? Where is the closest Bang & Olufsen store? Have you got any salespersonnel lined up or are you the salestalent? Who will install and service the products? Do you have someone to fill out all the daily operation papers? What if you have a bad month? or two? or three? Will this break your private economy? Do you have a good network?

If you want some more advice from a recent storeowner dont hesitate to call me 0045 20303102

Henrik

Re: I'm thinking about applying to open a B&O store...

TerryM — Thu, 03 Jul 2008 08:37:06 GMT

One of the prime causes of failure of new venture start ups is inadequate working capital.

So,three basic questions.

Do you have enough start up capital,and an adequate contingency fund?

Could you comfortably weather the failure of the venture?

Have you identified the size of your target demographic in the proposed area of business?

Re: I'm thinking about applying to open a B&O store...

The Plumber — Thu, 03 Jul 2008 06:36:37 GMT

Greg:
...am I insane?
I should say I considered this very seriously, had all the figures etc from B&O, back in the late 90s but didn't go through with it. Now, should probably be an even less sensible idea since technology is moving faster than ever and B&O a little slower than usual... plus the whole 'credit crunch' situation... is this a crazy idea I should instantly park, I wonder...

Greg, I think you should go for it and set up a dealership in Plymouth, where its sunny all year round . I will be your first customer

Re: I'm thinking about applying to open a B&O store...

camshaft — Thu, 03 Jul 2008 01:46:15 GMT

I think its a bad idea. When you're talking about business, you can't let your passion for the brand be your driving force. If it were a 'widget' brand, rather than B&O, and you saw that this widget company was in the same current state and financial situation as B&O, would you be as eager to open your widget store?

Austin

Re: I'm thinking about applying to open a B&O store...

drevil2k2 — Thu, 03 Jul 2008 00:41:45 GMT

Over the pond and up north, the B&O store here in Toronto is on the prime high end shopping area (Gucci, Cartier, LV, Hermes, etc.). They are apparently quite busy and supported by a strong client base. Parking is not so convenient, but you can always double park briefly for loading.

I guess if you have deep pockets to grow and gather a loyal client base, then it could be a good time to get in. As an observation, most people who can truly afford luxury items are typically recession friendly. If they want one, they just buy one, regardless of world economics.

Not to beat a dead horse, product knowledge is key. Also, you have to consider technical support, install, and repairs.

Exciting times! Good luck!

Re: I'm thinking about applying to open a B&O store...

jk1002 — Wed, 02 Jul 2008 20:23:49 GMT

I think timing this is tough. I mean you have many month lead time before you open up. I personally would wait though, to see what moves they make with product releases.

Based on what I read here, they might get back on track. If we do get a new multi HDMI chassis for BV7 32 and a BV 8 40 and BC6 I would think that means they got the message.

Question is, how far are they with that. Current product range is in my opinion difficult to sell. And I am not talking about specs of the screen, I am not overly impressed with the minor improvement concept that the industry is driving. But some things just need to be there, read HDMI connections.

For Music systems I think they are cool, if they bring BS5 and it does bring the sparkle back into the eyes of the customer - great. If then they would bring that remote concept for the kitchen that we saw here, that should help as well.

So in a nutshell, I would look for the product introductions and updates in the years end report that comes out in August. Economy can swing either way between starting the process and opening the shop door for he first time, so I wouldn't worry much about that.

Re: I'm thinking about applying to open a B&O store...

darioazul — Wed, 02 Jul 2008 18:55:54 GMT

Sounds like a great idea. However, perhaps waiting a few months may be prudent, it would be of great interest to know what the new CEO's plans are for the company.

In the future, I am looking to be 'silent' partner in B&O store here in the US. Michigan lost its only B&O store. The market here could support a store.

Key is going to be the buying experience, which I think is something too many store forget.

Good luck and keep us posted,

Dario

Re: I'm thinking about applying to open a B&O store...

beoaus — Wed, 02 Jul 2008 17:57:45 GMT

I would say possibly...

"Buy in gloom sell in boom" . If you have the finance and can weather the storm you may have a good negotiation point for a start. This may lower your initial commitment, terms, whatever.

...It is really is tough to see where B&O are headed or where they will be placed in a few years. Then if B&O are focusing on rationalisation they may not even want new dealers...

Good luck, beoaus.

Re: I'm thinking about applying to open a B&O store...

beocool — Wed, 02 Jul 2008 16:53:28 GMT

9 LEE:

I do tend to agree there. High street locations are for impulse buyers in general. A high value Bang & Olufsen purchase is rarely an impulse purchase on a Saturday afternoon shopping with the wife and kids. It does help brand awareness of course, but that's the job that B&O should be looking after - as well as the franchise owner in a local sense of course.
Personally, a Bang & Olufsen purchase was an 'event' for me - as was even browsing, and in a stange way it made it even more special if i had to make an effort to get there. The cherry on top was an unhurried sales demo thanks to the lack of morons walking in off the high street to gasp at the prices, tell how his Sony was five times better and an eighth of the price and generally waste the salesmans time.
Sorry to mention the name on the forum, but when i chose the location for LifeStyle AV i purposefully went for a premises out of town. Not only was the rent over 60% less than a town centre location, the rates were cheaper and i know that every customer i see is a serious one. If someone visits my shop, i am delighted to give them all the time they need as they are serious enough about the brand to come and find me, even if they don't buy anything.
In boom times, it's great to have flagship stores in premium locations - but when it's time to batten down the hatches, overheads are everything..
Lee

I believe you're right Lee. I like to visit specialist shops myself and often find the best ones are not in the High street. There are exceptions to the rule of course...

Re: I'm thinking about applying to open a B&O store...

ed7 — Wed, 02 Jul 2008 16:37:07 GMT

definitely a quick way to be a millionaire but you must be a billionaire to start with

good luck

Re: I'm thinking about applying to open a B&O store...

9 LEE — Wed, 02 Jul 2008 16:28:55 GMT

I do tend to agree there. High street locations are for impulse buyers in general. A high value Bang & Olufsen purchase is rarely an impulse purchase on a Saturday afternoon shopping with the wife and kids. It does help brand awareness of course, but that's the job that B&O should be looking after - as well as the franchise owner in a local sense of course.

Personally, a Bang & Olufsen purchase was an 'event' for me - as was even browsing, and in a stange way it made it even more special if i had to make an effort to get there. The cherry on top was an unhurried sales demo thanks to the lack of morons walking in off the high street to gasp at the prices, tell how his Sony was five times better and an eighth of the price and generally waste the salesmans time.

Sorry to mention the name on the forum, but when i chose the location for LifeStyle AV i purposefully went for a premises out of town. Not only was the rent over 60% less than a town centre location, the rates were cheaper and i know that every customer i see is a serious one. If someone visits my shop, i am delighted to give them all the time they need as they are serious enough about the brand to come and find me, even if they don't buy anything.

In boom times, it's great to have flagship stores in premium locations - but when it's time to batten down the hatches, overheads are everything..

Lee

Re: I'm thinking about applying to open a B&O store...

355f — Wed, 02 Jul 2008 15:59:19 GMT

wtlc2zpx:

I would wait at least a year, and don't forget: location, location, location...

Not so sure about that one.

I think the high costs associated with high street stores is simply to much for the new climate we find oursleves in.

How many specialist hifi dealers have prestigous high street stores?