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UPDATE 1-Bang & Olufsen signs deal to boost China presence
January 29, 2013 / 2:52 PM / 5 years ago

UPDATE 1-Bang & Olufsen signs deal to boost China presence

(Adds detail, background, CEO comment, share price)

* B&O trying to lessen reliance on Europe

* Shares rise 1.6 percent in weaker market

COPENHAGEN, Jan 29 (Reuters) - Danish luxury stereo and television maker Bang & Olufsen said on Tuesday it had signed a deal with Chinese partner Sparkle Roll to open more than 50 new stores in the country.

It said Sparkle Roll would operate three Bang & Olufsen stores in three cities and more than 50 smaller stores across the country dedicated to its lower-priced “Play” products.

The aim of the smaller “Play” stores was to build awareness of the Bang & Olufsen brand and drive customers to Bang & Olufsen stores selling its more expensive products.

The company’s top-of-the-range offering is the 103-inch BeoVision4 TV costing around 100,000 euros ($134,600).

“These steps are part of our overall strategy for China, that we want to do significantly better in the country,” said Chief Executive Tue Mantoni. “Today’s deal is a step in the right direction.”

Bang & Olufsen is turning its focus to growth markets such as Brazil and China as it tries to lessen its dependence on crisis-hit Europe.

This month, the group cut its revenue forecast for the year and said it would close up to 125 stores, mainly in Europe, due to weak sales.

B&O generates about 3 percent of its revenue in China and wants that to rise to between 20 and 30 percent within two to three years.

Last July it took Sparkle Roll and private equity company A CAPITAL aboard as strategic investors to help it develop in China.

B&O shares traded up 1.6 percent at 1357 GMT compared to a marginal fall in the local mid-cap index. ($1 = 0.7429 euros) (Reporting by Mette Fraende; Additional reporting by Shida Chayesteh; Editing by Tom Pfeiffer)

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