Bang & Olufsen fires CEO as sales slump
Saturday 12 January 2008
Bang & Olufsen has dismissed its long-serving chief executive Torben Ballegaard Sorensen as a result of a dismal sales performance over the past six months and concerns over the strategic direction of the high-end stereo and TV manufacturer.
B&O reported a 37 per cent drop in sales this week, news that wiped a third off the Danish company's share price. Although a slowdown in sales of luxury consumer electronic products could have been anticipated since the credit crunch started to bite in August, it appears that Mr Sorensen paid the price for diversifying the business away from its core audio and visual products.
Jorgen Worning, chairman of B&O, said the company's sales performance over the past few years, not just months, had been disappointing and that the company had failed to take advantage of the booming economic conditions during Mr Sorensen's six-year tenure. The 56-year-old Dane, who previously led Lego's development of robotic toys, has left the company immediately after negotiations with the board in the wake of this week's profit warning.
B&O is famous for its iconic stereos and TVs but also sells luxury mobile phones and car accessories. But with consumers tightening their belts, the company has suffered a decline in sales in the UK, one of its largest markets, and has slashed its profit forecasts for the rest of the year. Analysts argued that the company, which was founded in the 1920s, had failed to get its product range right.
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