p.4 #1 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
Arka wrote:
These are incredibly valid concerns to me. I'd love to see data on what generally happens when PE comes into organizations - how often they flourish, how often they don't, how often the benefits are strictly profit, how often the benefits are of the kind customers can enjoy and support... There are so many ways it can go. When I was involved in PE deals early in my legal practice, I had my doubts that these guys were going to really make things better for the targets they were acquiring. My experience was a pretty small sampling though.
As it stands, it does seem to me that Leica is a bit stuck as a purveyor of artisanal quality goods with software and electronics that are often far behind other imaging companies selling their wares for a lot less money. Leica can (to a point) justify the premiums based on brand, heritage, build characteristics, and the uniqueness of the experience (at least with the M), but I do wonder if Dr. Kaufmann is wondering whether that approach is sustainable for the next 20 years. That their foray into wristwatches hasn't caught fire doesn't really surprise me given how brand- and heritage conscious watch buyers can be. No one is going to spend $10K on a Leica watch when they could get an Omega, Breitling, or even certain Rolexes for less. ...Show more →
I think it is likely that the path to growth through cameras for a firm like Leica is limited. Therefore the well known experiments in brand extension.
One of the problems in digital cameras is how to differentiate your product. In film days this was done primarily through build quality, workflow, and optics. One could choose and freely change what film was used in order to acheive the look one wanted.
Now the sensor influences so much about the look at camera produces. Sensors are in cameras are dominated by a single core technology. Various Bayer filter, BSI. CMOS, chips that slightly different architecture predominately around speed. These are really produced only by two companies. Sony and Canon. Since Canon only manufactures for its own products Sony is the only current valid option available to other brands. Camera companies are looking for a way to change this. But currently that is the state of the industry.
Difficult to differentiate a camera enough to justify higher prices and gain big market share expansion. Leica seems to do this the best at this time. But that is a tough road forward. Medium format used to be able to do it. But they are all using the same base sensor technology too. So, you are seeing them also competing on form factor at small price premiums.
Now we are see very strong entries into build and optics from low price production areas like China. These areas also have access to capital and technology. They are a big competitive force to go up against on the long term.
There are huge barriers to overcome for a small company because of this situation. Then one must consider the demographics of Leica's existing customer base. I think this may limit the potential of the brand extension growth strategy. Also to be considered is that Leica is not a mismanaged company being sold at a turn around potential price. In fact it looks to be priced at a premium exit level. As much as I love photography, and Leica products, I would not bet a billion of my dollars in this enviornment.
p.4 #2 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
No matter what will happen regarding ownership, IMO a few things are a safe bet to say:
+ Leica prices will remain high
+ Leica will continue to rely on its luxury brand
+ Leica will continue to keep a focus on collector items
+ Leica will continue the successful M- and Q-camera series including the M-EV series
+ Leica community and brand associations (Leica Gallery, LSI)
+ Mediocre Leica service support
What might change:
+ The L-alliance with Sigma and Panasonic. If another camera brand takes ownership, the current alliance might no longer fit well. If new ownership is purely based on capital investment firms, the L-alliance likely survives if the L-camera sales still fit the expectations.
+ Leica Camera brand accessories as mentioned by others above. If these stay significantly below sales expectations, then likely no more Leica watches for example.
+ Leica Monopan 50 film - might become a one-of-a-time production in a limited edition. Possible that this is already the case under the current ownership.
+ Innovation: How much focus on the current "Das Wesentliche" approach remains is questionable.
p.4 #4 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
So, I have a personal question to put to this group of predominately Leica lovers.
If Leica is bought by a Chinese PE orientated financial firm, basicaly the corporate version of house flippers. Would that influence your willingness to pay high premium prices for Leica products going forward?
Whether your answer is yes or no please comment on your reasoning and feelings that lead to your answer.
p.4 #5 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
1bwana1 wrote:
So, I have a personal question to put to this group of predominately Leica lovers.
If Leica is bought by a Chinese PE orientated financial firm, basicaly the corporate version of house flippers. Would that influence your willingness to pay high premium prices for Leica products going forward?
Whether your answer is yes or no please comment on your reasoning and feelings that lead to your answer.
If the stuff is still made in Germany (yeah I know much is made in Portugal then shipped to Germany), then no.
But if it is off shored AND the prices remain elevated, no way Joseph.
Many famous brands are owned by another foreign entity - Rolls Royce by BMW. Bentley by VW. Volvo and Polestar by Geely. LandRover and Jaguar by Tata Motors. Pentax by Ricoh. blad by DJI. Contax by The Grim Reaper.
p.4 #6 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
Steve, I would wait to see what they did with future releases before drawing a conclusion for or against.
If we started to see the equivalent of Hasselblad Lunar products, then I'd be out and would just be buying used Leica produced up until the point of decline.
If they were to continue to employ the type of people Leica has for the past 10-20 years, who have made Leica what it is now, and they continue to release products that are 'true' to what Leica is now, then I would still be interested in Leica at the current price premium. I'll qualify this: I wouldn't care if they were to introduce more 'non-traditional' Leica products outside the core photographic products, as long as they still maintained and developed the M system along the lines of the M's current philosophy.
p.4 #7 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
'The acquisition of Western brands by Chinese firms often focuses on fashion, automotive, or luxury goods sectors rather than legacy photography equipment.'
A move by an established Chinese industry participant would be best, in keeping with their industrial capitalism model, not the financial capitalism we now see in the west. They are masters of supply chains, sourcing, processing, systems.
They have a robust enthusiast sector and very good business sense. They would be in it for the long haul too. You could do much worse than say, DJI. I'd expect prices would drop considerably too. The company would simply be better managed, with synergistic opportunities abundant. Leica for the people!
p.4 #8 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
Desmolicious wrote:
If the stuff is still made in Germany (yeah I know much is made in Portugal then shipped to Germany), then no.
But if it is off shored AND the prices remain elevated, no way Joseph.
Many famous brands are owned by another foreign entity - Rolls Royce by BMW. Bentley by VW. Volvo and Polestar by Geely. LandRover and Jaguar by Tata Motors. Pentax by Ricoh. blad by DJI. Contax by The Grim Reaper.
Unfortunately Huss, it almost guaranteed that new Chinese ownership will delete the film scratching feature. They just don't have the respect for heritage that the Austrians have.
p.4 #9 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
I was waiting for a film scratch reference... yet Huss was uncharacteristically restrained!
philip_pj wrote:
I'd expect prices would drop considerably too.
Leica for the people!
Why drop prices if you don't have to? Leica currently appeals to a market segment (though not exclusively) that is price insensitive because it's a more exclusive brand/product. I don't necessarily like this but it seems to be working for Leica.
Sure, high prices also turn away a lot of potential customers. Does the high end offset lost opportunities at the low end? Vice versa?
Right now Leica is not perfect, but they're threading a needle in the market that somewhat insulates them from having to compete against the mainstream brands.
Lower prices means they would have to move more units to increase sales. Meanwhile I can imagine an investor paying a premium rather than a fire sale, will want returns to match the investment. It could imply moving production to Asia to leverage lower costs which could negatively impact Leica's existing global brand. Conversely such a move could also instill regional pride that Leica is now a domestic premium product, rather than foreign. There are only so many M camera/lenses that the market will bear (most people don't want a fully manual system) so they'd have to move a lot more SL. To do that, SL would have to be much more competitive with Canikony, feature-wise, technologically and price point. And offer some clear reasons to choose it over Canikony.
I think most of us would love to see Leica at half to one quarter the current prices, or even less. And I think it would bring people who were otherwise excluded from Leica, into the family. But would it be sustainable? I honestly don't know. The concern would be that sometimes what seems like a good thing (lower prices and more universal access) ends up destroying what made that brand/product good/unique/interesting/desirable.
p.4 #10 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
1bwana1 wrote:
So, I have a personal question to put to this group of predominately Leica lovers.
If Leica is bought by a Chinese PE orientated financial firm, basicaly the corporate version of house flippers. Would that influence your willingness to pay high premium prices for Leica products going forward?
Whether your answer is yes or no please comment on your reasoning and feelings that lead to your answer.
It is utterly irrelevant where the buyers are from. Only their intentions for the brand. I trust Chinese entities no less or more than those from the US or Europe.
The only historically relevant comparison thats current is the Dji investment in Hasselblad. Its been hard to argue anything other than thats been very good for the brand.
p.4 #11 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
rscheffler wrote:
I was waiting for a film scratch reference... yet Huss was uncharacteristically restrained!
Why drop prices if you don't have to? Leica currently appeals to a market segment (though not exclusively) that is price insensitive because it's a more exclusive brand/product. I don't necessarily like this but it seems to be working for Leica.
Sure, high prices also turn away a lot of potential customers. Does the high end offset lost opportunities at the low end? Vice versa?
Right now Leica is not perfect, but they're threading a needle in the market that somewhat insulates them from having to compete against the mainstream brands.
Lower prices means they would have to move more units to increase sales. Meanwhile I can imagine an investor paying a premium rather than a fire sale, will want returns to match the investment. It could imply moving production to Asia to leverage lower costs which could negatively impact Leica's existing global brand. Conversely such a move could also instill regional pride that Leica is now a domestic premium product, rather than foreign. There are only so many M camera/lenses that the market will bear (most people don't want a fully manual system) so they'd have to move a lot more SL. To do that, SL would have to be much more competitive with Canikony, feature-wise, technologically and price point. And offer some clear reasons to choose it over Canikony.
I think most of us would love to see Leica at half to one quarter the current prices, or even less. And I think it would bring people who were otherwise excluded from Leica, into the family. But would it be sustainable? I honestly don't know. The concern would be that sometimes what seems like a good thing (lower prices and more universal access) ends up destroying what made that brand/product good/unique/interesting/desirable. ...Show more →
I realize that I am in a unique greoraphic position, but I would not like to see lower prices if it reduced customer engagement and experiences offered by Leica's flagship stores. Five of which are located within two hours of my home. So many events to attend that enhance Leica ownership. My recent/ future attendance includes:
October in Florence.
December it was Florence.
January one event in Milan
Olympic event in Turin/Milan.
February Milan.
February in Bologna .
February/March (3 days) in Venice.
March in Rome.
May in London.
Most of them get up early and either drive or fast train to event and back sleeping in my own bed that night. Also, many at no or minimal cost.
p.4 #12 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
I don't think the nationality of new potential owners is the key issue, rather the intentions and goals of said owners. Leica is a hertiage nishe brand, and I assume (dangerous to to, I know) many of us would probably like them to stay in that lane with the focus on photography.
I think Chinese owners have provided much needed finance to other brands while letting them continue to operate locally, e.g. Volvo or Hasselblad are two good examples.
In a perfect world, I would like to see some billionaire buy it as a pet project, someone willing to invest but not doing it to maximize profits.
p.4 #13 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
1bwana1 wrote:
I realize that I am in a unique greoraphic position, but I would not like to see lower prices if it reduced customer engagement and experiences offered by Leica's flagship stores. Five of which are located within two hours of my home. So many events to attend that enhance Leica ownership. My recent/ future attendance includes:
October in Florence.
December it was Florence.
January one event in Milan
Olympic event in Turin/Milan.
February Milan.
February in Bologna .
February/March (3 days) in Venice.
March in Rome.
May in London.
Most of them get up early and either drive or fast train to event and back sleeping in my own bed that night. Also, many at no or minimal cost.
I agree with this. I have attended amazing events with e.g. Ralph Gibson, Alan Schallers, and several others at the Leica Store in Washington, DC when I used to live there. Now living in Paris, there are 3 Leica stores in this city alone, along with Leica focused dealers, both for new and used gear. France is the birthplace of photography after all...
On top of 3 stores in Paris, there 2 in London and 1 in Brussels, all accessible via train within 2 hours (London slighty more, Brussels in less).
p.4 #14 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
patotts wrote:
I agree with this. I have attended amazing events with e.g. Ralph Gibson, Alan Schallers, and several others at the Leica Store in Washington, DC when I used to live there. Now living in Paris, there are 3 Leica stores in this city alone, along with Leica focused dealers, both for new and used gear. France is the birthplace of photography after all...
On top of 3 stores in Paris, there 2 in London and 1 in Brussels, all accessible via train within 2 hours (London slighty more, Brussels in less).
Yep, you are blessed to have those kinds of amenities so close around you. Then multiply that with the photographer's paradise that is Paris and france in general. No other brand can compete on that level in your location.
Now, how about sharing some of those amazing images you are making here in the FM Leica threads? We would all love to see them.
p.4 #15 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
1bwana1 wrote:
Unfortunately Huss, it almost guaranteed that new Chinese ownership will delete the film scratching feature. They just don't have the respect for heritage that the Austrians have.
p.4 #17 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
1bwana1 wrote:
I realize that I am in a unique greoraphic position, but I would not like to see lower prices if it reduced customer engagement and experiences offered by Leica's flagship stores. Five of which are located within two hours of my home. So many events to attend that enhance Leica ownership. My recent/ future attendance includes:
October in Florence.
December it was Florence.
January one event in Milan
Olympic event in Turin/Milan.
February Milan.
February in Bologna .
February/March (3 days) in Venice.
March in Rome.
May in London.
Most of them get up early and either drive or fast train to event and back sleeping in my own bed that night. Also, many at no or minimal cost.
I understand where you're coming from with the above. Those events are paid for by Leica through their revenue/earnings by everyone who buys Leica. Yet few ever benefit from the 'extracurriculars' Leica offers. This could definitely be a cost-cutting target to improve profits. Currently it's a 'perk' of being a Leica user but if the average Leica user base became more cost conscious, and ownership became more cost conscious, such events could instead become fee based, or disappear entirely (perhaps due to staffing reductions (efficiencies)). I have mixed feelings about such cost cutting because there is some logic to it. But using a food analogy, removing all the 'fat' from meals also removes a lot of the flavour. And I think this is a risk any brand faces when cost cutting starts to eliminate perks here and there, niche, narrowly focused products, etc. The 'flavour' of the brand diminishes and the resulting blandness alienates a potentially significant portion of a brand's user base.
p.4 #18 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
rscheffler wrote:
I understand where you're coming from with the above. Those events are paid for by Leica through their revenue/earnings by everyone who buys Leica. Yet few ever benefit from the 'extracurriculars' Leica offers. This could definitely be a cost-cutting target to improve profits. Currently it's a 'perk' of being a Leica user but if the average Leica user base became more cost conscious, and ownership became more cost conscious, such events could instead become fee based, or disappear entirely (perhaps due to staffing reductions (efficiencies)). I have mixed feelings about such cost cutting because there is some logic to it. But using a food analogy, removing all the 'fat' from meals also removes a lot of the flavour. And I think this is a risk any brand faces when cost cutting starts to eliminate perks here and there, niche, narrowly focused products, etc. The 'flavour' of the brand diminishes and the resulting blandness alienates a potentially significant portion of a brand's user base....Show more →
Actually, based on the new hires I know and the focus of their training and job description, I expect that Leica will expand this line of customer engagement, and experiences. I Leica knows well that it will never compete on price of technology. This leaves engagement and experiences. This is core to the Leica company owned and operated global network flagship stores, and the philosophy of the galleries, and Leica Akademie in them. This is true of the camera lines, and the brand expansion lines that are currently in development.
I encourage everyone to try and take advantage of their closest Leica Store offerings and get to know the staff there. Although the price of Leica equipment is high, the price of the Leica experience/workshop offerings is quite low. As an example:
At the end of February Leica Akademie Italy is offering a 3 day street photography workshop in Venice Italy. The cost of the workshop is only $450 EU. That is only 150 EU per day. Way below what I see as prices on workshops in average in locations. Especially in an expensive location like Venice. This includes all materials, and free loaner equipment. In fact every participant is offered free use of an M11 and 35mm Summilux lens for the three days. Rental prices for this equipment is usually more than that. Venice is known for very high hotel prices. Leica has arranged accomodation for for us at only 89 EU a day. Since I can either drive of fast train there in about 2 1/2 hours transportation cost is lett that 100 EU. I can't recall seeing a three day workshop in a location like Venice of less. Ever.
This is just one example of a paid event. There are actually as many free events offered. Never mind that you can go to a Leica store, get you gear cleaned professionally including sensors, and borrow pretty much and gear you want to try for free. I think it reasonable to amortize these kinds of engagements into the cost of your leica gear. Unavailable from any other camera brand I can think of.
p.4 #19 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
Even if the less desirable outcome happens and a Chinese investment group or another buyer gains a controlling stake in Leica, I don't think it would really change much. This is a successful business with a strong brand and loyal following, and no new owner is going to want to break what's clearly working. Leica's reputation and German engineering heritage are huge assets, and any sensible business entity would want to protect that, not mess it up.
I think it's extremely unlikely they would ever move the headquarters in any potential sale...the German engineering and roots are a major selling point worldwide. They could, however, shift some aspects of production, like Leica has already done in Portugal or other locations including China. I've heard that Leica rangefinders (the actual mechanical piece) is produced in Porto, Portugal currently.
p.4 #20 · "Blackstone Could Sell Control Of Leica In 1 Billion Deal "
Fred Miranda wrote:
Even if the less desirable outcome happens and a Chinese investment group or another buyer gains a controlling stake in Leica, I don't think it would really change much. This is a successful business with a strong brand and loyal following, and no new owner is going to want to break what's clearly working. Leica's reputation and German engineering heritage are huge assets, and any sensible business entity would want to protect that, not mess it up.
I think it's extremely unlikely they would ever move the headquarters in any potential sale...the German engineering and roots are a major selling point worldwide. They could, however, shift some aspects of production, like Leica has already done in Portugal or other locations including China. I've heard that Leica rangefinders (the actual mechanical piece) is produced in Porto, Portugal currently. ...Show more →
New owner sees potential to improve the bottom line, period. The bottom line could be improved from both ends. Increased sales+cut costs on labour (with less on materials). So don't know if this would be good for Leica and us the end customers. Fact is that lots of new capital originates in Asia and the Middle East not in fumbled EU.
