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Local sales reflect Leica turnaround

July 6, 2010: Leica Germany has announced something of a turnaround in financial results on the back of its new camera releases through 2009 – 10.
In the financial year ended March 31, the company recorded an 18 percent increase in sales to US$195 million, and a modest return to profitability.

The turnaround came late in the financial year, with Leica actually announced a loss for the first nine months of the year.

Australian Leica distributor Adeal says that local results have reflected the positive global results.

‘We’ve seen an impact due to new products releases over the last 12 months,’ said Gary Pertot.

‘Improvements in the M System have had a particularly big impact, with a doubling of sales from financial year 2009 to 2010.’
He added that the digital still compact segment had also seen growth of close to 50 percent through the same period, led by the X1 and the V-Lux 20 – which have only been available in the last quarter.

He said that the M9 was still on backorder in Australia.

Beyond the fundamental customer demand for the new products, Pertot attributed the result to a consolidation of the number of dealers handling Leica cameras, and conceded that bringing local pricing into line with the rest of the world had had positive impacts on demand for the prestige marque.

Leica Germany cited the the S2 professional camera system (pictured above right in the hands of film director, Wim Wenders), the Leica M9 (the smallest digital system camera of the world featuring a full-format image sensor) and the interchangeable lens Leica X1 as major contributors to the positive result.

New products in the company’s sports optics division such as the laser distance meter Leica CRF 1600 were also well received by the international markets. Products introduced during the last nine months now account for 50 percent of Leica’s sales, the company said, adding that a successful restructuring process, reduced expenses for purchasing and general administration and the implementation of a new sales structure also contributed to the turnaround.

‘Leica is back. More and more enthusiastic buyers around the world appreciate our innovative technical solutions, the outstanding product quality and the unique design marked by our legendary red dot. The successful turnaround has become possible through the joint efforts of Leica’s employees and the management to actively pursue our common targets while accepting the necessary changes,’ said Rudolf Spiller, CEO of Leica Camera AG.

COMMENT: First it has to be said that Leica is different. But could other well-regarded camera brands learn something from Adeal’s local marketing strategy? Instead of grabbing shelf space any old place it could find it, Adeal actually reduced the number of outlets ‘qualified’ to sell Leica – adding to the cachet of the brand, motivating those dealers who were appointed authorised resellers, and no doubt reducing distribution costs. Oh, and customers benefit by dealing with sales staff who actually know what they are talking about. It also brought local pricing into line with what was going on in the rest of the world, limiting sales seepage to private imports. Tasco is doing something similar with its Ricoh range.

Hmm…keeping local prices more in line with overseas sellers, and making sure that sales staff are genuinely equipped with sound product knowledge. How quaint!

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