THEY are the cameras that have captured the most famous faces in history and caught many of its dramatic moments.
In the hands of Henri Cartier-Bresson, Eve Arnold or Robert Capa, Leicas have produced immortal images — from portraits of Picasso and Marilyn Monroe, to the D-Day landings of 1944 and the Maoist revolution in China in 1949.
But Germany’s Leica, the company that invented the 35mm camera, woke up late to the digital age and almost went under. Two weeks ago it surprised the industry by turning to American businessman Steven Lee for salvation.
Lee was appointed to the board of Leica, based at Solms, north of Frankfurt, with a brief to spring the company back into profit.
The 52-year-old American had been vice-president of Best Buy, America’s largest retailer of electronic goods. Before that he was with IBM, among others, where he carved out a reputation as a marketing and strategy high-flyer.
But Lee’s glittering career did not seem to cut much ice in his first encounter with the managers at Leica — who treat their cameras with a passion beyond business acumen.
“I arrived at 10 o’clock and we went head-to-head for nine hours straight. No meal breaks,” said Lee.
Last year Leica faced going out of business for good. It reported losses of more than €9m (£6.1m); and, worse still, admitted it was in danger of losing half its operating capital.
Banks took fright and many of them cut their lines of credit, plunging Leica into an unprecedented crisis. Its departure from the Frankfurt Stock Exchange seemed highly possible.
“When he said he had once worked in a laboratory the atmosphere in the meeting eased noticeably.
“People felt he would understand what we were doing at Leica. It opened a lot of doors for him,” said one manager who heard Lee explain his background.
The lab “confession” was fortunate for a man who admits that all he knew about Leica was that he owned several and paid £8,800 for a 1963 black paint Leica M3 at an auction.
“The people who work at Leica are totally passionate about what they do,” said Lee. “Anything less than perfect is not good enough for them.
“This is the heart and soul of the brand. But this singular focus has cost them a tilted perspective towards professionalism and not enough towards business.”
Indeed, Lee’s title as board member for corporate strategy and marketing did not previously exist at Leica.
“They kept climbing further and further into this ivory tower, with other people just as passionate about Leica telling them they were doing great,” he explained.
“The ivory tower is the right place to be because that is the Leica heritage, but we need to reach into the iPod generation who don’t know how great the cameras are and who would be just as passionate about a Leica as they are about an iPod.”
Lee was originally approached last year but turned the company down.
“At the time the situation was very unstable and it was not suitable for me to join Leica. So we parted but kept in touch.
“In the end, the company’s sheer enthusiasm for the brand and the restructuring persuaded me that I had to join,” Lee said. “I loved the camera so I joined the company.”
After the banks threatened to pull the plug in February last year, a series of meetings led by the chairman, Josef Spichtig, managed to stave off liquidation until an extraordinary general meeting in May.
Despite opposition from some small shareholders, Spichtig won agreement to raise €23m of fresh capital by offering 13m new shares at €1.70 each. The inventory was cut from €39.4m to €28.8m.
These measures restored some sense to the balance sheet and provided sufficient liquidity for the company to carry on. But as Spichtig warned, “a sustained increase in the group’s equity must be achieved through the profits we are planning to make in the coming years”.
In other words, the company needed to grow the customer base for its cameras.
“Leica is the play toy of a lot of well-to-do people who are steeped in the Leica tradition,” said Lee. “Now we need to reach people who could and might use a Leica. I use the example of the American ‘soccer mums’ who would love to take better pictures, who are the keepers and recorders of their families’ history. It’s not the men. These are well-to-do families interested in excellent photography. They are our new potential customers.”
To this end he wants to beef up the retail operation and offer a clear brand image. The first Leica boutique in the company’s red-and-black colours has opened in Berlin.
The greatest problem for Leica has been its inability to compete with the explosion in digital photography.
Now, with the launch of the M8, a digital version of the famous M series begun in 1954, the company believes it has a camera that combines all the qualities of a Leica film camera in a digital format.
Last week Leica announced it had bought a majority stake in Sinar, a Swiss company that produces professional digital cameras.
“It’s late in the day to be making the M series digital,” admitted Gero Furchheim, Leica’s spokesman.
“It was difficult to do what we wanted as the old management still strongly believed in analogue.”
Indeed, since Leica revolutionised photography in 1924 with the first practical 35mm camera, it has moved steadily towards the specialist professional market.
With the arrival of photo- journalism and magazines such as Life and Look, and with Cartier-Bresson pioneering an entirely new style of photography, Leica lost touch with its popular roots.
“What Leica needs is a pragmatic approach in building the company back to what it was,” said Lee.
As he sets about doing this, Lee is conscious that he is a Yank in the court of a national icon. The founder’s son, Ernst Leitz, treated his employees like an extended family and in return they were devoted to designing the best.
Yet he was a paradox. He equipped Hitler’s army with field glasses and cameras, but also risked his life to smuggle 300 of his Jewish workers to the United States.
“I think the differences between people are not between race or nationality. I believe that in the company we all share the same passion that will make Leica go to a better place,” Lee said. “Being an American is not going to make a shred of difference.”
