Miami Company Buy Bangolufsen Stores
Written by Samantha Joseph on December 23, 2004
By Samantha Joseph
A Miami electronics company has purchased two high-end retail stores in a deal that it says will double its sales in the next six months.
REDD, an acronym for Revolution Entertainment Design & Development, bought two Bang & Olufsen outlets for an undisclosed sum from Tweeter Electronics. The acquisition is its first step in growing from a small firm in Miami’s Design District to an entertainment company with four outlets by next year, company officials say.
REDD acquired all the inventory at Bang & Olufsen stores at The Falls and Aventura Mall. Company officials say they will operate the stores under the Bang & Olufsen banner.
Bang & Olufsen is a Danish manufacturer of high-end electronics. REDD designs large entertainment systems, typically costing up to $100,000, for homes and businesses.
REDD officials intend to open stores in South Beach and Naples, where they expect to find a large population of urbanites to purchase products.
"With another store and the way we do business, I can see us achieving $10 million (in sales) within the next 12 months," said Managing Director Douglas Hirsch.
Before the deal, REDD had about $1 million in assets. The two Bang & Olufsen stores have sales of about $5 million a year.
"We’re already planning our expansion," said Mr. Hirsch, who had worked with Tweeter and led its introduction of Bang & Olufsen to Florida and Arizona in 1998.
Tweeter announced Sept. 24 that it would sell its Bang & Olufsen operations to focus on its five other brands, including Sound Advice.
"Since we could not focus on (the Bang & Olufsen stores), they were a financial drain on the company," said Tweeter CEO Jeffrey Stone.
Officials of Massachusetts-based Tweeter said dropping the brand would cost about $2.5 million but would result in a $1 million operating profit next year.
"They really didn’t fit Tweeter’s idea of the audio-visual business," Mr. Hirsch said, "but it’s something that we like."