Why Leica Is Opening So Many Stores

Selling a $27,000 camera is no snap—especially when that hefty price doesn’t even include the lens. For Leica Camera, the challenge is compounded by the fact that it has lost more than a third of its U.S. dealers, who have fallen victim to competition from the likes of Best Buy (BBY) and Costco Wholesale (COST). So at a time when an increasing number of brands are bolstering their ability to sell online, the German camera maker is rolling out its own stores to woo serious photography buffs.

Leica’s first U.S. outlet opened in Washington, D.C., last month, and the company is rolling out two more stores in Miami and New York this summer. By March 2016, Leica says its current roster of 37 stores will have grown to 200 worldwide. They’ll stock a range of models from the entry-level $700 V-Lux 40 point-and-shoot camera to the top-of-the-line $27,000 S2. “It is a high-risk strategy,” says Walter Loeb, president of retail consulting firm Loeb Associates. “Leica needs to establish itself more directly in the U.S., but it’s a small market for high-priced cameras, and it’s highly competitive.”

Leica is opening stores at a time when U.S. consumers are buying fewer cameras, given the quality and convenience of taking photos with smartphones such as Apple (AAPL)’s iPhone. Last year, Americans spent $6.2 billion on cameras, down 8.3 percent from 2010, the Consumer Electronics Association estimates. The average price per camera was $173. Leica says it has less than 1 percent of the U.S. market, while Canon (CAJ) and Nikon together command 42 percent, says researcher Mintel.

Photograph by SSPL/Getty ImagesThe original Leica, in 1925, was far smaller than the bulky shooters of its time

The retail rollout is the latest step in Chief Executive Officer Alfred Schopf’s turnaround strategy for the Solms (Germany)-based company. In 2004 the company dodged bankruptcy; two years later, French luxury handbag maker Hermes International (RMS)sold its 36 percent stake. Sales have since recovered, as Leica managed to merge its engineering prowess with new digital technology.

Leica’s new stores are luxurious and minimalist, like its cameras. The outlets feature black leather furniture from Germany and gray tiles from Italy. The sole color accent: the red featured in the Leica logo. Stores include a retail space, a studio area to demonstrate products, and a gallery—to exhibit photographs shot with Leica cameras—that can be converted into a lecture room for the company’s Leica Akademie photography courses. “We stand for a certain image of quality, and this is something we wanted to show in this environment,” says Schopf, who wouldn’t say how much Leica is spending on the stores. “We are showing a dedication to the quality of photography.”

Leica’s compact cameras, introduced in 1925, were revolutionary compared with the heavy plate cameras of the day. In 1932, about 90,000 Leicas were in use; by 1961, a million. Leica cameras, popular with photojournalists, went on to capture many an indelible image, from Alberto Korda’s portrait of Che Guevara to Huynh Cong Ut’s “Napalm Girl” to Jim Marshall’s iconic photo of Janis Joplin with a bottle of Southern Comfort.

By the time it introduced its first digital compact in 1998, Leica had lost customers to Canon and Nikon. Sales rallied after it introduced digital versions of its 1950s-era M camera, and today digital models bring more than 90 percent of sales. Revenues last year surged 57 percent, to €248.8 million ($309.7 million), while income leapt tenfold. Managers says the stores will draw more customers. Says Roland Wolff, director of corporate retail for Leica’s U.S. arm: “We want to share what people can do with the product.”

The bottom line: Mimicking luxury clothing designers, pricey camera maker Leica will open 160 of its own stores by 2016 to sell the allure of photography.

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<em>Tintin</em>: Opening in Theaters Far from You

By Ronald Grover and Michael White

By the time director Steven Spielberg walks the red carpet on Dec. 11 for the New York premiere of his animated movie The Adventures of Tintin, the film about a boy reporter in search of sunken treasure will already have sold well over $200 million in tickets—all far from the U.S. Tintin, featuring Jamie Bell and Daniel Craig, is based on the graphic novels by Belgian author and illustrator Georges Remi, better known as Herge. The film opened first in Europe in late October, then, three weeks later, in Asia. When U.S. audiences get their first peek at Tintin and his fox terrier Snowy on Dec. 21, the film will already have played in more than 50 countries, including France, Germany, China, Japan, and even tiny Estonia.

U.S. studios are simply following the money. This year, moviegoers in Europe, the Middle East, and Asia will spend a combined $21 billion on movie tickets, nearly twice as much as the $12.2 billion spent in the U.S. and Canada, according to consultants PricewaterhouseCoopers. Box-office sales in some big emerging economies will grow by double digits annually through 2015, PwC predicts. “There’s tremendous expansion going on outside the U.S., which is a pretty mature market,” says Jeff Blake, vice-chairman of Sony Pictures Entertainment, Tintin’s distributor in most overseas markets.

Tintin was a natural for a European opening. The character has been a favorite among children and adults alike there since his debut in 1929. The 24-volume series features the Boy Scout-like Tintin with his trademark cowlick unmasking evil thugs engaged in drug smuggling, gun running, and other dastardly activities amid sweeping historical backdrops such as the Russian Revolution or the eve of World War II. The books, translated into about 80 languages, have sold 350 million copies worldwide. In France, where the film opened during a 10-day school break in October around La Toussaint, or All Saints’ Day, Tintin so far has grossed more than $50 million.

Paramount Pictures’ Tom Cruise action film Mission: Impossible—Ghost Protocol, will open in France, Germany, and Japan ahead of its Dec. 21 release in the U.S. Sony plans to release the James Bond thriller Skyfall in Europe next October, two weeks ahead of the U.S. debut. That will boost ticket sales during midterm school breaks in the U.K., France, and elsewhere, Blake says. “We keep a very large calendar of events all over the world,” says David Kosse, president of international distribution at Universal Pictures.

Hollywood is already raking in foreign cash. In April, Universal released its car-racing heist movie Fast Five in the U.K., Australia, and South Korea before its U.S. release in late April. It collected $626 million in worldwide ticket sales, $416 million of which came from outside the U.S., according to researcher Box Office Mojo.

Studios are jostling to beat rivals into overseas exhibition, one of the industry’s few growth segments. Universal rushed to release Fast Five ahead of Paramount’s Thor in several markets. That movie, about a hammer-swinging god, took in $267.5 million of its $448 million global haul from foreign sales, according to Box Office Mojo.

Box office receipts outside North America will grow at an 8.1 percent compound annual rate through 2015, says PwC, compared with a 6 percent forecast for the U.S. But some regions will see more robust increases, with Central and Eastern Europe logging 11.5 percent annual growth and Asia 11.3 percent. “What Hollywood sells, and the rest of the world wants, are great franchises, great stars, and superstar directors like Steven Spielberg,” says Vincent Bruzzese, president of market research firm Ipsos OTX’s worldwide motion picture group. “You no longer need the buzz of a large opening in the U.S. for a film to sell well overseas.”

The bottom line: The Adventures of Tintin, a film to be released in the U.S. at Christmas, has already logged $207 million in foreign ticket sales.

Grover covers the media and entertainment industry for Bloomberg Businessweek in Los Angeles. White is a reporter for Bloomberg News.

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