Archived posting to the Leica Users Group, 1997/09/12

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Subject: Re: Pricereductions & Receivership
From: Stephen <cameras@jetlink.net>
Date: Fri, 12 Sep 1997 07:45:51 -0700

Eric Welch wrote:

> At 08:31 PM 9/11/97 +0000, you wrote:
> >Combining this information together with the rumour that sales have
> >decreased dramaticaly it looks that Leica is trying to get rid of
> >some stock over the backs of the customers who paid the full price.
>
> Really, that's being a bit unfair. They didn't cause the DM to drop in
>
> value on purpose. They have to sell cameras to keep the factory
> running and
> people employed.
>

Right now the price reduction is unconfirmed--for all we know its some
kind of misunderstanding.

But if it is true, Leica is making an incredibly bad mistake which could
well send them into receivership.  Leica employees , are you reading
this??

The problem is not with the price reductions themselves -- which will
stimulate sales short term.

The problem is the lost dollars and profits of the worldwide Leica
Dealer network.  They tied up their investments in existing stock bought
at the OLD PRICES.  Now they will have to sell for less than their cost
just to move the  product.  They are doubly screwed since not only will
they NOT be making a profit, they cannot reinvest their money at the new
prices until they sell the old stock.

This price reduction will put some small Leica dealers out of business,
and disillusion others to the point of selling Nikon or Canon.

The result?  Leica will lose most of their dealers.   From that point,
the  race is on to see who eventually buys them out.

My hope is Rolls Royce.  Wouldn't it be great to get a free Leica every
year when you trade last years Rolls for a brand new one?   Wow, the
Leica advertising department really nailed that one.

My sincere hope, even though I would buy cameras and lenses at the new
low prices, is that the marketing geniuses at Solms quietly forget this
idea--along with the Rolls Royce ads.

Earth to Solms?? Is anybody home ??

Regards,

Stephen Gandy