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AXXESS – Audio Group Denmark’s Strategic Change
2022 was a year of significant change for Audio Group Denmark.
During that year, group founders and majority shareholders Lars Kristensen and Michael Børresen sold 45% of their shares to Vækst-Invest, a private equity fund and Kent Sørensen previously group CFO was appointed as CEO.
Like any capital fund, Vækst-Invest, invests to scale the business and create significant growth in turnover and earnings via active co-ownership of the companies, with an eye on a profitable exit somewhere down the track.
Moving upmarket
At the time of investment, all three of the AGD’s brands; Ansuz Acoustics (cables etc.), Aavik Acoustics (electronics) and Børresen Acoustics (speakers) had experienced strong revenue and earnings growth. Vækst-Invest’s co-investment therefore was to facilitate and open further growth potential – but the question was how?
The initial reply came quickly in late 2022 with the release of the first of Borresen’s M-series loudspeakers. The M1, a state-of-the-art stand mount loudspeaker which retails for an astonishing US$100,000 per pair. This was followed in 2023 by the M3 & M6 floor standing speakers launched at High End Munich 2023. Using Michael Borresen’s patented and award-winning iron-free magnet system these speakers retailed for US$280,000 and US$550,000 respectively. One might think that such price points stretch reality, but it seems high end luxury goods are not constrained by price because Borresen is under pressure from well heeled customers in Asia and North America to now produce a US$1,000,000 statement speaker – limited edition of course.
Not to left out Aavik and Ansuz brands also released upmarket offerings; Aavik with its 880 series (the I-880 integrated amp retails for US$70,000) and Ansuz its gold signature series of cables, where a pair of 3M speaker cables retails for over US$100,000.
At its core, this is luxury branding - the continual improvement of products, attractive to a limited target market, but serves AGD’s interests in positioning their audio brands in a premium space, with premium profit margins to match.
While statement products push the envelope of technology and material application and position the brand(s) at or near the apex of high fidelity, this is not a recipe to seriously scale a business and thus a new strategic direction was needed.
AXXESS for Accessibility
At High End Munich 2023 AGD presented in a separate purpose-built room a new audio brand, AXXESS.
The creation of the AXXESS brand was not a spur of the moment business decision but a carefully calculated investment to connect hi-end audio with new and much larger audiences.
Since Borresen, Aavik and Ansuz were already premium brands it was not wise to dilute their brand equity with low-price entry-level products. Audio Group Denmark wanted to avoid a “Mercedes A-Class moment” when offering de-costed entry level product meant the entire ‘house’ brand lost prestige.
Furthermore, AGD was acutely aware of demographic and societal changes in the audiophile world.
Demographic changes were plainly visible at trade shows. Audiophiles are aging. In 2023 the median age for audiophiles is in the 51-60 cohort and 25% are in the 61-70 cohort. The implications are significant for the industry. Many audiophiles are retirees, and this group will grow significantly over the next decade.
Research suggests that many people contemplate downsizing as they approach retirement, typically around their late 50s to early 60s. The decision is frequently one of economics, a way to add to retirement funds and reduce maintenance costs. Heavy class A monoblocs and 6ft tall speakers – which seemed like a great idea in younger years – can now be a health risk. Weakening body parts and careless lifting or moving of heavy objects is a recipe for painful muscle tears and sprains, back injury, herniated disc, and other musculoskeletal disorders. Moreover, downsizing typically means less space for audio stuff especially if a dedicated audio space gives way to audio equipment in a communal space, such as the living room.
Another vexing issue which AGD needed to consider was how to connect with a younger audience. Sustainable business requires a steady and ideally growing stream of customers. Sustainable growth requires the acquisition of new customers and the retention and ideally upselling or cross-selling to existing ones.
Younger audiences love music too – even if it’s delivered through a single bluetooth speaker or streamed via mediocre headphones. It’s possible to enjoy music without being concerned on how its delivered. As an analogy, almost everybody walks but most people aren’t shoe enthusiasts.
Undoubtedly for some younger audiences the convenience and utility of music are more important than the quality of the playback. Those that have the opportunity to hear and appreciate music reproduced in higher fidelity commonly cite price tags and set up hassle as roadblocks.
AXXESS for all
Last year AGD successfully launched the now multi award winning Axxess Forté streaming amplifier series. The Forte combines an integrated amplifier, headphone amp, streamer and DAC into a single box. Connect to your Tidal or Spotify account and hook up your loudspeakers and you are done.
[video=youtube;M1aZPqeOo7M] https://youtube/watch?v= M1aZPqeOo7M[/video]
One good looking modest sized box, 18lb weight and US$5500 retail. It addresses the needs of retiring downsizers and new entrants alike.
But the story does not end there because AXXESS is not just a range of streaming amplifier it’s a complete ecosystem.
During 2024 the AXXESS brand will roll out 2 new AXXESS brand loudspeakers (L1 and L3), An AXXESS cable loom (power, RCA interconnect, loudspeaker, BNC digital interconnect and CAT8 ethernet cables), a power distributor and resonance control devices.
PHOTO: The upcoming AXXESS L1 stand mount loudspeaker. Retail price US$ 2750. Stand US$ 1100. Pricing to be confirmed at launch. Expected May / June 2024.
Despite the modest price, Axxess branded products will share the same DNA, sonic signature and aesthetic design for which Ansuz, Aavik and Børresen have become well known.
AXXESS products will be sold through dealers, giving those privileged to carry AGD brands something for nearly every budget. That’s how you scale a business. By connecting synergistically optimised hi-end audio solutions with new and much larger global audiences.
2022 was a year of significant change for Audio Group Denmark.
During that year, group founders and majority shareholders Lars Kristensen and Michael Børresen sold 45% of their shares to Vækst-Invest, a private equity fund and Kent Sørensen previously group CFO was appointed as CEO.
Like any capital fund, Vækst-Invest, invests to scale the business and create significant growth in turnover and earnings via active co-ownership of the companies, with an eye on a profitable exit somewhere down the track.
Moving upmarket
At the time of investment, all three of the AGD’s brands; Ansuz Acoustics (cables etc.), Aavik Acoustics (electronics) and Børresen Acoustics (speakers) had experienced strong revenue and earnings growth. Vækst-Invest’s co-investment therefore was to facilitate and open further growth potential – but the question was how?
The initial reply came quickly in late 2022 with the release of the first of Borresen’s M-series loudspeakers. The M1, a state-of-the-art stand mount loudspeaker which retails for an astonishing US$100,000 per pair. This was followed in 2023 by the M3 & M6 floor standing speakers launched at High End Munich 2023. Using Michael Borresen’s patented and award-winning iron-free magnet system these speakers retailed for US$280,000 and US$550,000 respectively. One might think that such price points stretch reality, but it seems high end luxury goods are not constrained by price because Borresen is under pressure from well heeled customers in Asia and North America to now produce a US$1,000,000 statement speaker – limited edition of course.
Not to left out Aavik and Ansuz brands also released upmarket offerings; Aavik with its 880 series (the I-880 integrated amp retails for US$70,000) and Ansuz its gold signature series of cables, where a pair of 3M speaker cables retails for over US$100,000.
At its core, this is luxury branding - the continual improvement of products, attractive to a limited target market, but serves AGD’s interests in positioning their audio brands in a premium space, with premium profit margins to match.
While statement products push the envelope of technology and material application and position the brand(s) at or near the apex of high fidelity, this is not a recipe to seriously scale a business and thus a new strategic direction was needed.
AXXESS for Accessibility
At High End Munich 2023 AGD presented in a separate purpose-built room a new audio brand, AXXESS.
The creation of the AXXESS brand was not a spur of the moment business decision but a carefully calculated investment to connect hi-end audio with new and much larger audiences.
Since Borresen, Aavik and Ansuz were already premium brands it was not wise to dilute their brand equity with low-price entry-level products. Audio Group Denmark wanted to avoid a “Mercedes A-Class moment” when offering de-costed entry level product meant the entire ‘house’ brand lost prestige.
Furthermore, AGD was acutely aware of demographic and societal changes in the audiophile world.
Demographic changes were plainly visible at trade shows. Audiophiles are aging. In 2023 the median age for audiophiles is in the 51-60 cohort and 25% are in the 61-70 cohort. The implications are significant for the industry. Many audiophiles are retirees, and this group will grow significantly over the next decade.
Research suggests that many people contemplate downsizing as they approach retirement, typically around their late 50s to early 60s. The decision is frequently one of economics, a way to add to retirement funds and reduce maintenance costs. Heavy class A monoblocs and 6ft tall speakers – which seemed like a great idea in younger years – can now be a health risk. Weakening body parts and careless lifting or moving of heavy objects is a recipe for painful muscle tears and sprains, back injury, herniated disc, and other musculoskeletal disorders. Moreover, downsizing typically means less space for audio stuff especially if a dedicated audio space gives way to audio equipment in a communal space, such as the living room.
Another vexing issue which AGD needed to consider was how to connect with a younger audience. Sustainable business requires a steady and ideally growing stream of customers. Sustainable growth requires the acquisition of new customers and the retention and ideally upselling or cross-selling to existing ones.
Younger audiences love music too – even if it’s delivered through a single bluetooth speaker or streamed via mediocre headphones. It’s possible to enjoy music without being concerned on how its delivered. As an analogy, almost everybody walks but most people aren’t shoe enthusiasts.
Undoubtedly for some younger audiences the convenience and utility of music are more important than the quality of the playback. Those that have the opportunity to hear and appreciate music reproduced in higher fidelity commonly cite price tags and set up hassle as roadblocks.
AXXESS for all
Last year AGD successfully launched the now multi award winning Axxess Forté streaming amplifier series. The Forte combines an integrated amplifier, headphone amp, streamer and DAC into a single box. Connect to your Tidal or Spotify account and hook up your loudspeakers and you are done.
[video=youtube;M1aZPqeOo7M] https://youtube/watch?v= M1aZPqeOo7M[/video]
One good looking modest sized box, 18lb weight and US$5500 retail. It addresses the needs of retiring downsizers and new entrants alike.
But the story does not end there because AXXESS is not just a range of streaming amplifier it’s a complete ecosystem.
During 2024 the AXXESS brand will roll out 2 new AXXESS brand loudspeakers (L1 and L3), An AXXESS cable loom (power, RCA interconnect, loudspeaker, BNC digital interconnect and CAT8 ethernet cables), a power distributor and resonance control devices.
PHOTO: The upcoming AXXESS L1 stand mount loudspeaker. Retail price US$ 2750. Stand US$ 1100. Pricing to be confirmed at launch. Expected May / June 2024.
Despite the modest price, Axxess branded products will share the same DNA, sonic signature and aesthetic design for which Ansuz, Aavik and Børresen have become well known.
AXXESS products will be sold through dealers, giving those privileged to carry AGD brands something for nearly every budget. That’s how you scale a business. By connecting synergistically optimised hi-end audio solutions with new and much larger global audiences.