Icon of luxury hifi Bang & Olufsen is running out of time
COPENHAGEN: For the past decade, investors in the iconic luxury TV and stereo maker Bang & Olufsen (B&O) have looked up to just one chairman. But during that time, they’ve had four chief executives. They’ve also seen the value of their investment drop by 40%.
It’s a history that suggests it’s time for B&O shareholders to start questioning the role of the chairman, Ole Andersen, according to Per Hansen, an investment economist at savings adviser Nordnet in Copenhagen.
Hansen says Andersen “can’t afford” to keep changing CEOS. B&O, which packages the latest audio and video technology in notoriously expensive design, has issued three profit warnings in the past year, triggering a 60% loss in market value since New Year’s Eve.
The 63-year-old Andersen is an imposing figure in Danish corporate circles. But his circumstances took a dramatic turn last year when he was forced to step down as the chairman of Danske Bank amid a Us$220bil money laundering scandal that’s still being investigated.
Andersen says his history at Danske has no bearing on his role at B&O. He also says he’s not considering stepping back from his responsibilities at the company.
“We’ve just had an annual shareholders’ meeting and there was very strong support among shareholders for me,” he said in a phone interview on Tuesday. “As long as I have the support of my colleagues on the board and the shareholders, then I don’t think I could, in a responsible way, just throw in the towel.”
On Tuesday, Andersen announced that 55-year-old Kristian Tear, whose career spans top jobs at Logitech and Blackberry, was replacing Henrik Clausen as B&O’S chief. The company’s shares initially gained almost 10% on the news before ending the day about 3.7% higher. The chairman made clear it’s a tough job, given that B&O is under “pressure all the time.”
“Bang & Olufsen has always been a really tough case,” Andersen said. “There have been four CEOS over the past 10 years – four or five of them. They have all contributed toward driving B&O in the right direction.” He also said Clausen wasn’t fired, but had asked to step down. That detail is worrying, according to Hansen at Nordnet.
“Andersen said it was Clausen who asked to be relieved of his duties with the company. I did not believe my own ears,” Hansen said by phone. “If the board doesn’t act on its own to accommodate shareholders, then the board has gone overboard.”