A family-controlled German camera brand that revolutionised modern photography over a century ago with its mass-produced lightweight cameras is looking beyond its past as it charts a future in the smartphone age.
While a collector last year paid €7.2mn for a 102-year-old prototype, Leica Camera’s chief executive Matthias Harsch told the Financial Times that relying too much on nostalgia was “always dangerous”, as he seeks to build on the revival of a company that almost collapsed two decades ago.
Leica, which launched its revolutionary 35mm camera in 1925, almost went bust in 2005 as its high-price analogue cameras struggled to compete with cheaper and more versatile digital cameras made by Japanese rivals such as Canon, Nikon and Sony.
The company, which was saved by Austrian investor Andreas Kaufmann, is determined to learn from past mistakes when it was slow to embrace digital transformation. It is launching new products and seeking to take advantage of consumers’ enthusiasm for traditional photography, even as smartphone cameras become ever more advanced.
“The supposedly dead camera industry has actually returned to growth mode,” Harsch said at Leica’s headquarters in Wetzlar. “Never before have so many people been involved with photography.”
Under Kaufmann, now the company’s chair, Leica invested in new digital models and top-of-range optics including modern versions of the M rangefinder series that was first launched in 1954. In 2008, it brought out a 50mm lens that exceeds the human eye’s perception capabilities, and retails for as much as €12,350.
The former school teacher, who inherited a fortune from an aunt, oversaw projects that played on Leica’s legacy and defied some industry conventions, including introducing a digital camera with a black and white sensor, and another without a viewing screen.
Kaufmann’s changes inspired a roaring comeback for Leica, which had record revenues of €596mn in the year to March, 8 per cent higher than a year earlier. Sales were just €94mn in 2004-05. Harsch said profitability also reached an all-time high.
Leica, in which private equity group Blackstone holds about 45 per cent, does not disclose profitability numbers. It grew annual sales by an average 10 per cent in the two decades following its near collapse. The company was delisted in 2012.
Leica cameras and lenses blend Bauhaus design and high-quality engineering, and make up a quarter of global sales for cameras priced at more than €4,000, according to company data. The latest addition to its flagship M series has a list price of about €8,000 excluding a lens.
The first mass-produced 35mm still Leica I was launched at a trade show in Leipzig in 1925, after years of tinkering by Oskar Barnack, a technician at microscope maker Ernst Leitz Wetzlar, as he sought alternatives to the bulky and heavy glass plate cameras of the time.
Weighing less than 500 grammes, the Leica I started a new era of reportage photography and made the company a leader in the market for top-end cameras.
Its rangefinder series — the M system — was launched in 1954 and was until the early 1970s the gold standard among professional photographers such as street photography pioneer Henri Cartier-Bresson and enthusiasts including the UK’s Queen Elizabeth II.
But as consumers moved first to autofocus single-lens reflex cameras and later to new digital technology, revenues collapsed and Leica narrowly avoided bankruptcy in 2005, having been late in developing its own film-less efforts. Its new cameras also suffered from teething problems, with the first digital M requiring cumbersome external infrared filters.
The recovery initiated by Kaufmann, who started buying shares in 2004, has grown Leica into a 2,400-strong company, split between its Wetzlar factory, a production site in Portugal, and a global network of stores and distributors.
Leica has sought to maintain its premium image through collaborations with celebrity fans and in-house auctions that highlight the value of its cameras as collector items. Many of its stores double up as art galleries.
The cultivation of a community of photographers and collectors is a “major part of their strategy”, said Peter Coeln, founder of one of the first Leica shops in Vienna, whose business was bought by the German company in 2014.
Leica-owned branded shops, now at more than 120 worldwide, had also made a “difference” as it competed with brands that tend to market their products through high street retailers, said Harsch.
The company has also sought to combine its heritage with modern trends, meaning that the newest digital cameras are compatible with lenses dating back to the 1930s.
“What’s really, really unusual with the core Leica M cameras is that they are a very direct evolution from 1925,” said Sean Reid, an expert who writes about cameras and lenses at reidreviews.com.
Leica added Bartolomeo Rongone, the boss of Italian fashion house Bottega Veneta, to its supervisory board last year in a move to further position the brand in the luxury market, and has collaborated with Chinese manufacturers Huawei and Xiaomi on smartphones.
It has also developed an app that gives smartphone pictures its signature feel. After starting its range of luxury watches, Leica is now also moving into eyewear, although Harsch said the camera business, which generates 80 per cent of revenues, will remain the sales engine.
Harsch, chief executive since 2017, is betting that this time, instead of being a victim of disruption, Leica will benefit as consumers swap TV sets for projectors, boosting its projection kits that sells for €3,500 apiece.
The segment will capitalise on Leica’s expertise in lens making but flip the way the image is processed, he said. Instead of filtering light through to a camera sensor, the projectors beam it out on to a surface.
“You have to bring your own areas of expertise into new business areas,” Harsch said, adding that the new ventures will take time to deliver.