[rollei_list] Re: OT: Speaking of Leica ....
- From: "Fox, Robert" <RFox@xxxxxxxx>
- To: <rollei_list@xxxxxxxxxxxxx>
- Date: Thu, 3 Mar 2005 09:39:43 -0500
Title: Leica suffers as its camera sales collapse
Feature: news
Date: 2 March 2005
A shock drop in camera sales has left one of the industry's premier
brands in severe financial diifculty.
Leica disclosed that it finished the 2004/05 fiscal year with a EUR10
million loss and that it suffered a 17.4% sales decline from the
previous year.
As a direct result, on 17 February, the company admitted it expected to
lose half its registered share capital this month, and subsequently
banks have partially terminated its credit lines.
A statement on the company's website explains that its remaining credit
lines cover its current needs and the company's management board has
negotiated a solution with the banks that will be presented to
shareholders at its annual general meeting on 31 May.
Gero Furchheim, at the company's headquarters in Germany, could not
disclose details of the emergency package but did say that the present
financial troubles will not affect product developments. However, he
continued that the delay on the release of key products, including the
Digital Modul-R, which was launched at Photokina late last year and was
due for release in December, has worsened matters. The Digital Modul-R
is now likely to appear in April but the loss of predicted turnover
until then, Furchheim says, will be damaging. In addition, those in the
trade were reluctant to place orders before products were officially
launched at the trade show in Cologne, further aggrevating the company's
problems.
Leica's introductions seem unlikely to compensate for the loss of
analogue sales. Furchcheim explains: 'There is still the potential for
us to make a profit (from film cameras). At the moment though, our
research is showing that more people are buying second-hand rangefinder
cameras than new ones but we believe that this is a short term problem.'
The company is looking to the Far East as a market with the potential to
bolster sales and is to go ahead with the plan, announced in January, to
establish a Japanese subsidiary. To date, the distribution and the
promotion of Leica products has been handled by an independent
distributor, Nihon SiberHegner K.K. However, Furchheim says sales of
Leica products have decreased most dramatically in territories where the
company does not have its own sales organisations. 'More than 80% of our
turnover is made outside of Germany. Because of changes in our
situation, our distribution overall is suffering.'
Despite the worrying signs, Furchheim is confident that the Leica brand
will survive but the company, he says, must adopt a unique approach to
marketing its products. 'We want people to see that we are bringing new
ideas to the market. However, economically it doesn't make sense for us
to release new products every month. Our marketplace has changed. As the
levels of quality have reached a pinnacle, photographers have realised
that long term factors, as opposed to new innovations, are more
important.
Because of this, we are fighting with a lot of energy, because we
believe there is a lot of potential in the Leica name.
'The announcements we had to make by German law brought us into a
difficult situation but we are confident in our strategies.'
Source:=20
(c) Incisive Media Investments Ltd 2004=20
=20
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