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Leica is going Chapter 11


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I'll bet that a fairy godfather will come along and pull their fat out

of the chapter 11 fire. After all, a chapter 11 BR is a

re-organization BR. It doesn't mean that they are necessarily

going out of business. Their major creditor (probably a bank) will

appoint a caretaker board while they get their act together under

new management.

 

It might turn out to be the best thing for Leica - it will surely bring

some new blood in and likely bring their products and prices

more in line with the market.

 

No use crying over spilt pixels! ( : - < )

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I agree with AZ, did I really say that? The market for Leica is older enthusiasts many of which have their gear now. The purchasing power and market for camera gear is the 18-30 year olds. If a company can't get their product to the race track and have the odd win, then the consumer base isn't there to support the racing. You see no Leicas at events, or pro's clicking away with them, so the first time buyer automatically ignores Leica. The market for which Leica caters too is shrinking everyday. And that's people with a little bit left over at the end of payday for perusing hobbies, expensive ones at that. And with the number of complaints I've read here about MP's and M6 ttl's, their new product isn't rock solid and only defers their existing client base from future purchases. And the fresh young faces that will peruse this expensive hobby of photography, do you think it will be film or digital choice? It's the sum of all bad decisions while only using a medium, film, which will no longer be easily available soon. In my opinion, they should have made a cheaper more reliable Japanese built body years ago that had the quality control that is famous from Japanese assembly lines and then sold up to the keeners with a hand-made built in Germany body that had no issues because there were no financial struggles. I'm surprised they lasted this long.
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Roger: <i>this isn't the Leica Forum anymore...?</i> Sadly, you appear to be right. It's become the Leicabashers' backyard.<p>Anyway, here's just another 2 Eurocents... I guess Leica's problem starts with making a) hi-end products that are too good from the start, optically as well as mechanically, and b) by doing so creating a myth and c) feeding this myth, to the effect that instead of willing to get rid of their gear in order to buy the even newer, sexier, better model every other year customers keep using their cameras and lenses for well over five decades, passing on their gear from generation to generation, and investing in expensive CLAs and fostering a flourishing used market.<p>Now that it's too late for swamping the market with second rate junk, the only light at the end of this tunnel strategy, IMHO, appears to be a digital module/body for all those tens of thousands of owners of LTM and M lenses to lure them into investing into something that is sure to be technologically obsolete within a year, but - given the $$$$s invested into lenses - will be substituted by the customers on a regular basis, just like in Konicannonikonworld. <p>I'm dead serious.
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Ther is no chapter 11 in Europe and what has been published is a fairly common procedure. The banks will meet with the company to review its capital structure. They are most unlikely to ask for immediate payback of their loans but freeze them at current levels pending a restructuring. This may pressage a takeover by someone but whatever happens this is unlikely to be the end of Leica. They still make the best and most famous cameras in the world and someone will pay a high price for that.
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<i>I really doubt that Cosina would want to snap up a moribund, borderline-unprofitable like Leica.</i>

<p>

Yes, but your field of expertise is composing bitchy internet missives, not lens design, so your doubts have no real merit. I'd bet Mr. Kobayashi would love to acquire Leica's expertise, especially if he could "snap" it up at a fire-sale price.

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It occurs to me that there are some interesting parallels to be drawn with the state of leitz today, and the swiss watchmaking industry in the early 80s...which seems to have survived intact, it would seem. I found this link (from '97, but the circumstances haven't changed for the worse) quite insightful, YMMV <br /><br />

 

http://www.timezone.com/library/comarticles/comarticles631836909141718750

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I defer to our European members for knowledge on business practice "over there", so pardon my ignorance if this sounds ignorant. Is is possible that Hermes have positioned Leica in such a way that they can reap some kind of tax benefit? Or to shed debt from Leica? Or to force Leica to sell them a majority/controlling interest? Somehow I can't imagine Hermes (who seems to be a well-run business) have been kept in the dark about Leica's financials, nor that they don't have the credit rating needed to keep the wolves away. It just seems like there's more to this than meets the eye.
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I know nothing about this, but I would be surprised if Leica did not survive in some form.

Remember, they have gone through this before, what with the M5 debacle. FWIW, I think

the internet probably had a hand in Leica's troubles. It made the consumers highly

informed about what they were purchasing, the similarity of used gear to the current

offerings, and sites like ebay and KEH made it very easy to find used gear at very good

prices. Where someone before might just have bought new gear by default, now people,

especially younger people, go online and find that they can get a user M6 for 1500 dollars

less than the price of an M7. Unless money is really not an object, it is hard to convince

the new user to buy new. I hope Leica will come out of this, but they need to make their

new products offer something that is very compelling and unavailable in their previous

product lines. The most obvious is digital of course, but beyond that I am sure there are

other things that they could use to convince people to buy their new products. I think

Leica was trying to move in this direction with things like the Tri-Elmar, Leica a la Carte

program, 75mm summicron and Digital Modul R, but it must not be working. I am

guessing the extraordinarily high price of many of these things is to blame.

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max -- i think it was crazy for leica to spend a penny on digital follies. digital cameras are home electronics. that means you need a new model (and probably several) every few months to stay competitive. it also means makinhg money by making things that wear out quickly and need to be replaced by that more recent model. this is not what leica does nor what it should be doing.

 

the fact is, maybe leica was doomed the day the first digital camera appeared. no company is more wedded to old school photography than leica. lots of buggy whip mfrs went out of business, and the ones that survived weren't making buggy whips anymore.

 

would i care if leica survived making digital cameras?? probably not. i can buy better ones from nikon or canon.

 

personally, i believe -- as i have aid before -- that leica should have survived, even thrived, the way lots of turntable mfrs did after the digital audio revolution; i.e. by making superexpensive products for a boutique/specialty clientele. there is no shame in this, and if it meant more leica lenses for me, that's great in my book. i like the idea of non plus ultra products for those who can afford them, or for those who choose to save up for them.

 

bottom line: the notion that leica could have survived by embracing digital more firmly is poppycock. further, the notion that i would care if they did is also silly. i want a leica when i want a reliable, no battery film-based workhorse. when i want a digital, there are lots of places to look.

 

let's hope leica dies a graceful death; i'd hate to see the name on plastic cameras from china.

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"personally, i believe -- as i have aid before -- that leica should have survived, even thrived, the way lots of turntable mfrs did after the digital audio revolution; i.e. by making superexpensive products for a boutique/specialty clientele."

 

But that IS what they did, and it didn't work.

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