Re: "Blackstone Could Sell Control Of Leica In €1 Billion Deal "
Arka wrote: patotts wrote:
I know LBO is used widely as a turn around tool, and there are examples of it succeeding, like Hilton Hotels, but personaly I am just higly concerned when these companies get involved deeply. They are seldom customer-centric and do what is best for the consumer/product - they are in it for maximizing profits.
I hope I am wrong for Leica, but as pointed out in the thread, it is higly likely that they will focus on making Leica a powerful fashion/luxury brand first.
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.
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. As much as I love photography, and Leica products, I would not bet a billion of my dollars in this enviornment.
Re: "Blackstone Could Sell Control Of Leica In €1 Billion Deal "
Arka wrote: patotts wrote:
I know LBO is used widely as a turn around tool, and there are examples of it succeeding, like Hilton Hotels, but personaly I am just higly concerned when these companies get involved deeply. They are seldom customer-centric and do what is best for the consumer/product - they are in it for maximizing profits.
I hope I am wrong for Leica, but as pointed out in the thread, it is higly likely that they will focus on making Leica a powerful fashion/luxury brand first.
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.
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. As much as I love photography and Leica products, I would not bet a billion of my dollars in this enviornment.
Re: "Blackstone Could Sell Control Of Leica In €1 Billion Deal "
Arka wrote: patotts wrote:
I know LBO is used widely as a turn around tool, and there are examples of it succeeding, like Hilton Hotels, but personaly I am just higly concerned when these companies get involved deeply. They are seldom customer-centric and do what is best for the consumer/product - they are in it for maximizing profits.
I hope I am wrong for Leica, but as pointed out in the thread, it is higly likely that they will focus on making Leica a powerful fashion/luxury brand first.
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.
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.
Jan 26, 2026 at 08:31 PM
Previous versions of 1bwana1's message #16974849 « "Blackstone Could Sell Control Of Leica In €1 Billion Deal " »
