[Leica] Agfa

[mstoesz at wyoming.com (Mike Stoesz)]

Special Agfa Edition MMIE

  

Good morning;

Here is Wm. McCurry's take on the Agfa situation.


--------------------------------------------------------------------------------

    We've received many calls asking about Agfa's "bankruptcy" and its 
impact on the imaging industry. Too many to ignore . . .

    For the record, we've enjoyed doing the Agfa Success Seminars. 
(The last one was in November, 2003.) More recently, we've done the 
seminars for Fujifilm. Today, we have no connection with Agfa other 
than being a member of the industry that's trying, like all of us, to 
drive more printing at retail and thereby grow the pie.

    To say this as delicately as possible -If some retailers spent as 
much time working on their business as they spend gossiping, they 
would be rich. If this gossiping didn't cause the story to grow like a 
fungus each time, it was told it wouldn't be as harmful to others or, 
potentially, to the industry. 

    The fact is that people are making things up, misunderstanding 
"facts," and "piling on" to the story. In Agfa's current situation, 
Mark Twain's comment comes to mind, "The rumors of my death are 
premature."

    Let's put this in perspective. Remember way back to September, 
2003, when Kodak bonds were rumored to be "junk" and their stock was 
tanking? How much time/effort was wasted by retailers talking, 
rumoring, and gossiping instead of focusing on their core businesses? 
We're glad to report Kodak is alive and well today and their digital 
cameras are kicking butt. Who would have thought it two years ago?

    Many of you asked our opinion. If we tell you what we think will 
you promise to go back to work and invest your time/energy in what you 
can control and what you can benefit from - in other words, promoting 
your own business in your own marketplace?

    Here's what we think the situation is - but first we must state 
we've neither asked for nor gotten official confirmation from anyone 
at Agfa since they are under a gag order that requires approval from 
the German courts before they can speak publicly. So these are our 
opinions and nothing more.

AgfaPhoto GmbH is the "new" imaging company spun out of Agfa-Gevaert 
AG. 
As typically happens in these deals egos, personalities and emotions 
become involved, often resulting in misunderstandings between the 
parties. We believe AgfaPhoto chose the "nuclear option" of going into 
the bankruptcy court as part of a negotiating strategy. They wanted to 
get Agfa Gevaert's attention so the company would address festering 
issues. We understand there are overhanging issues - like pension 
funding - that aren't totally resolved. Consider how United Airlines 
hung their pension liability onto the U.S. taxpayers, and how General 
Motors is struggling with their pension issues. In Germany, the 
situation is even more onerous on employers. When cooler heads 
prevail, this and the other issues will be resolved. 
What AgfaPhoto did doesn't directly translate into what we understand 
bankruptcy to be in the U.S. We won't see a liquidation or other 
actions that we have come to expect based on the U.S. bankruptcy 
process. Our understanding is that the court-appointed official, has 
already said AgfaPhoto has too many assets and too few liabilities to 
be considered for insolvency. 
Some loose mouth started the rumor that Agfa Germany had decided to 
close all U.S. operations. This has to be totally bogus. Various 
financial sources have told us that AgfaPhoto US has been sending 
millions of dollars each and every month to Germany. AgfaPhoto US is 
financially very strong. It makes no sense for Agfa to shut down the 
division that represents around one-third of their worldwide profits 
and cash flow. Whoever spreads this malarkey just doesn't understand 
the situation. 
If you want hard facts on what's really happening, check out the PMA 
Newswire, which does a good job keeping you informed with industry 
news on a daily basis at 
http://www.photomarketing.com/dailynews/nl_default.htm 
    The best piece of advice came in an email from Mike Worswick, past 
PMA president, PRO president, and DSG (Damn Smart Guy). Mike said:

    "Will Agfa Photo survive? My guess is yes - in some form. Perhaps 
even in the same form. For the moment, I am going to forget the issue. 
There is nothing I can do today but worry about my investment in a 
machine. Since I do not want an ulcer or more stress, I choose to set 
the issue aside until I can make a meaningful decision. 
    For those of you thinking about buying a lab, I want to say how 
much we enjoy the function and work coming off of our D-lab. I clearly 
hope that information quickly becomes available that will allow you to 
make an intelligent purchasing decision. At Wolfe's, we have been 
talking about buying a second unit. We have been looking at the 
digital printer without the film scanner to give us added capacity and 
redundancy in case of a breakdown. 
    By the way, our finishing volume in May was about 2% higher than 
last year. Digital is making a difference."

    Okay, there you have it. Bottom line: Focus on bringing more 
business in your door today and leave the idle chatter to those 
without enough business to keep them busy. If you've got specific 
questions you think I can answer, I'm always happy to talk on the 
phone or by email - especially if they're questions about driving 
customers in to your store instead of analyzing corporate maneuvering! 

Have a successful and fun Summer Season,

Bill

  


--------------------------------------------------------------------------------

William J. McCurry, Chairman 
McCurry Associates 
301 North Harrison Street - Suite 677 
Princeton, NJ 08540 
(800) 553-1332 or (609) 688-1169 
Fax: (609) 688-1192 - Mobile (609) 731-8389 
wmccurry@mccurryassoc.com