July 7, 2020 / 9:08 AM / a month ago

UPDATE 1-Luxury TV and stereo maker B&O sees return to growth after near 30% slide in sales

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COPENHAGEN, July 7 (Reuters) - Struggling Danish TV and stereomaker Bang & Olufsen reported a slide in full-year sales to their lowest in at least 27 years on Tuesday, but predicted a return to growth next year through new product launches and stronger marketing.

Known for its modern Danish design and leading sound technology, Bang & Olufsen has seen sales of its luxury televisions and exclusive speakers with a price tag of up to $80,000 decline for nearly a decade.

The company raised 409 million Danish crowns ($61.9 million) via a rights issue earlier this month to help it survive the coronavirus crisis, which temporarily closed most of its shops.

B&O posted a 29% drop in revenue to 2.036 billion Danish crowns for the financial year ending May 31, the lowest in at least 27 years, according to Refinitiv data.

It made a loss before tax and interest of 347 million crowns, compared to a profit of 59 million crowns in the previous year.

“This has been a disappointing year for Bang & Olufsen,” said Chief Executive Kristian Teär in a statement.

In April, the company announced a new strategy that would boost its online presence and digital sales, focus on six core European markets, and accelerate growth among luxury consumers in China and South Korea.

Teär said he expects to return to growth next year, driven by product launches and stronger marketing.

Shares in the company, which are down 87% since a peak in early 2018, were trading 4.8% lower at 0806 GMT.

The company’s chairman acknowledged in August last year that “the warning bells” were starting to ring and that the board would listen if approached by a buyer.

“The investors need to look forward. The next six months will be crucial to see if B&O can continue as an independent company,” Nordnet analyst Per Hansen said.

$1 = 6.5937 Danish crowns Reporting by Andreas Mortensen; Editing by Jacob Gronholt-Pedersen and Jan Harvey

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