COPENHAGEN, DENMARK — After seeing two of its biggest competitors make major acquisitions in recent months, hearing aid maker William Demant is seeking ways to minimize the impact on its global sales. According to a June 8 Reuters article by Ole Mikkelsen, the company (which owns major hearing aid brands Oticon, Bernafon and Sonic Innovations) says it “will not hesitate” to purchase retail chains if necessary to protect the sale of its own-brand hearing aids.
At last week’s investor meeting in Copenhagen, Chief Executive Niels Jacobsen was quoted as saying, “We are looking at what is coming up for sale and if it fits in our strategy then we are ready to buy”. Without providing details on the amount the company would be willing to spend on its acquisition plans, he indicated that company cash flow was “strong”.
“It’s purely defensive moves,” analyst Daniel Jelovcan told Rueters about recent acquisitions in the hearing aid industry.
Renewed Attention to Retail
William Demant’s increased attention to retail comes weeks after its biggest competitor, Sonova, announced that it had missed its full year sale and profit targets, which were blamed in part on the company’s struggles in Costco where it’s Phonak devices have been struggling to compete with Costco-branded (Kirkland Signature, currently manufactured by GN ReSound) hearing aids that recently underwent a price reduction of $100/unit.
While it has a presence within Costco under its Bernafon brand, William Demant has said it has so far refused to sell its premium flagship hearing aid brand Oticon to Costco, a company that now accounts for 10 percent of all hearing aids sold in US.
Defending its retail acquisition plans, the company said that “up to 70 percent of the money made in the hearing aid business comes from the retail side”
William Demant, which recently purchased major French retailer Audika, currently accounts for an estimated 23% of global hearing aid sales.
*title image courtesy pehub