[Leica] Neiman Marcus (was M campaign)

[Bill Erfurth <m6rf@yahoo.com>]

Hi Gang,

My wife received her Neiman Marcus Christmas catalog
in the mail today (wow, great photography).  And, what
camera do you think is in the catalog?  SONY digital.

Now, the marketing department at Leica Camera is an
excellent example of Vaporware...i.e. it exists in
name only.  If you are looking for ducks, you have to
look where there is water.  If you are trying to sell
a high-end product to new consumers, you have to put
that product where the potential buyers can see
it...i.e. Neiman Marcus, Sharper Image, etc (the
photographers already know about it).  This is not
rocket science, it's simple logic.  Yes, you are most
likely going to have to give Neimans' the cameras, and
probably a little cash also, but this has a better
chance of generating a positive return than the
current M-Campaign.

Neimans' is selling quality and therefore everything
in their catalog is "quality"...including the
photography.  Leica, hopefully, is trying to sell
quality cameras so everything in their catalog should
be "quality".  Well as you have read on the LUG and
will see if you get the M promotional piece, the
photography sucks...and that is not good when you are
trying to sell cameras.

I along with others (those in the investment
community)  are beginning to loose faith in Herr
Cohn's ability to effectively manage Leica Camera. 
The stock was down again last week (down 1.2% for the
week; down 13.3% for the month, and down a whopping
24.2% for the 13 week period).  How would you feel if
your investments or pension plans were loosing value
at that rate?  How do you think the stock holders
feel?

Herr Cohn has done a good job of cutting expenses at
Leica, but now someone has to come in and balance the
other side of the equation...i.e. SALES.  If Herr Cohn
is 'serious' about turning the company around (more on
this in a minute) he has to increase sales by
introducing new products, and also move that glut of
R8s he has sitting in the warehouse.  For what ever
reason, he has chosen to "blow off" the Christmas
season with out even an attempt to move the excess R8
inventory.  That to me is unbelievable. 

If Herr Cohn doesn't move to reverse this continuing
downward spiral, you are going to see another round of
layoffs at Leica Solms.  This would be a disaster
because once those talented people are gone, chances
are, you are never going to get them back.  

Now, about Herr Cohn "seriously" wanting to turn Leica
around.  A couple weeks ago, I had dinner with a 'big
time bean counter consultant', and fellow Leica user. 
His take on the situation is that Leica is a
respected, small, European company, with a reputation
for quality.  And, therefore, is a hot takeover target
(there are very few of these companies remaining). 
Thus, he feels that Herr Cohn may be just waiting
around for some large corporation to come in and buy
Leica for it's name (and at the same time buy out Herr
Cohn's contract) and that is why no great sales  or
promotional efforts are being made.  Bean counters
think like that.

My feeling, as an investor, is that there is going to
be one hell of a stock holders revolt if the price of
the stock continues to drop and hits the 5 or 6 Euro
range because that is where most of the major
investors bought in.  The have already seen the value
of their stock drop to HALF of what it was earlier
this year.  There has to be a point, if things
continue as they are, where the major players are
going to say 'enough is enough'.  I believe that most
of them are smart enough to know when it is time to
cut their loses.

Any way you look at it, Herr Cohn is running out of
time.  He says he is going to have a new more 'user
friendly' M body for Photokina next fall, but I feel
that the chances of him having it to market by then
slim...very slim.  If he lays off more Leica
employees, he will not have the production capacity he
will need if things ever do turn around.  And, if
Leica stock continues to drop, the Leica stock holders
are going to 'take up their clubs and torches and
march to the castle on the hill where Dr. Frankenstein
has been making monsters again'...but this time they
will be looking for Herr Cohn.

Who knows?  Maybe I should fax them my resume'.


Regards,

Bill Erfurth
m6rf@yahoo.com




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