An audiovisual entertainment company that sells $45,000 televisions and $110,000 speakers shouldn’t grow in a flat economy.
But Danish heritage brand Bang & Olufsen is confounding convention, as it is set to announce 15 per cent growth in the last financial year.
“What it shows is there is a demand out there for Bang & Olufsen that’s untapped,” said Julian Kipping, general manager for the company in Australia and New Zealand.
“I wouldn’t say it’s because of any decisions I’ve made or we’ve made that has changed it so dramatically,” he said. “We’ve just stoked the fires, lifted a few key items and people have gone, ‘Oh, yeah, Bang & Olufsen’.”
A number of changes have helped, particularly an increased marketing push, an active Australian owner, and the introduction of the Band & Olufsen Play ‘‘on-the-go’’ range of speakers and headphones that allow consumers access to the brand’s sleek design at a low entry point.
Price accessibility helped a luxury brand in a flat market, Mr Kipping said.
“I’ve worked for the brand for 18 years and I can absolutely, unequivocally say this is the best brand portfolio that we’ve ever had,” he said. “You can buy into Bang & Olufsen headphones at $200 or go up to our new speakers, the Beolab 90 at $110,000, and we do everything in between.
“So it’s become a lot more accessible in one sense and a lot more luxurious and exclusive in another ... we’re appealing to more and more people.”
The 91-year-old Danish brand has also had an injection of cash from aspiring luxury brand conglomerate Emerald Group Investments. The group, led by former Deutsche Bank analyst James Kennedy, former Australian manager of Prada Melinda O’Rourke and Allister Smith, has been the Australian “master dealer” of the home entertainment brand for a year, adding to its stable that includes Graff Diamonds, Rolex, Patek Phillippe, LK Boutique and, soon, Spanish brand Loewe.
EGI clearly has designs on being an Australian version of French luxury multinational LVMH.
“That’d be nice to be in the same sentence as them,” Mr Kipping said. “We very much want to be the finest purveyors of luxury retailing. And we want to give people a luxury experience in these various categories.”
He said the investment came at the right moment. “Really to grow the business here, an investment was needed, an investment in stores, in distribution and general profile.”
EGI recently opened the Bang & Olufsen “flagship sensory store” on Melbourne’s Russell Street, the fourth-largest store for the brand globally.
Mr Kipping said Mr Kennedy wanted to clear old expectations of the audiovisual sector by “giving the industry something that’s not expected, the experience you might expect in a Rolex boutique”.
EGI hopes it will consolidate the investments in staff and marketing that have seen stable single-digit growth for the brand pop into the double digits.
“We’ve invested in stores and we’ve invested in marketing straight from the get go because Bang & Olufsen is a brand that most people in our target market have heard of but they don’t know it,” Kipping said.
Mr Kipping said the addition of a business development manager had brought instant results, working with architects, interior designers and property developers.
For example, a Miele kitchen no longer offers the point of difference for property developments it once did. Some developers and designers are now asking for exclusivity on Bang & Olufsen installations.
“As a brand, Bang & Olufsen is certainly upping the game in terms of what they’re bringing out while still staying true to design, quality of sound, materials and craftsmanship and I think that shines through,” Mr Kipping said.