Loewe's woes might be good news for Chinese TV manufacturers

NewsCenter

Asian brands poised to rescue struggling German outfit

High-end German TV manufacturers, Loewe, are desperately seeking outside investment in order to avoid total collapse, as the Company filed for insolvency yesterday.

In an interview with Reuters, the Company's CEO, Matthias Harsch, admitted that Loewe just couldn't currently keep up with mass-market rivals such as LG and Samsung who are able to sell their TVs at comparably lower prices.

Loewe's TVs are priced somewhere between the high-end sets from the established mainstream manufacturers and below those of the luxury brands like Bang & Olufsen. Much of the price premium can be attributed to the impressive speakers and audio technology that Loewe put in to their TVs but the public just aren't buying in to their offer, in sufficient numbers.

The news of Loewe's problems preceded an announcement that B&O had posted increased year on year losses for the first financial quarter, on the back of weak European sales.

The news isn't necessarily so bad for Loewe, with Harsch revealing that the firm had sufficient capital to keep going until the end of 2013, by which time he believed a suitable investor would be chosen.

"We have six bids from investors from which we will choose in the next four weeks," Harsch told Reuters.




In July, Loewe embarked upon a strategic partnership with Chinese manufacturers, Hisense, in the form of technology and local knowledge sharing but the Chinese didn't put any cash on the table.

Harsch didn't reveal the names of any of the potential investors but, back in August, he told German magazine, Der Spiegel, that the Company was in talks with Asian manufacturers including TCL, Changhong, Skyworth, as well as Hisense.

With the TV market in somewhat of a state of flux, with the advent of 4K and OLED technologies, Loewe's name might well prove very appealing to the likes of TCL, as they look to branch out in to Western markets. One of the biggest potential stumbling blocks, for the emerging Asian manufacturers, is in gaining consumer trust and an established Western brand, such as Loewe, could help alleviate that.

From our perspective, we've had very little success in securing TV review samples from Loewe - and we're not alone there - so we hope that any new investors would insist that the Company gets their product out there, in to the hands of the media, in a more timely fashion. A lack of reviews from trusted sources is certainly not going to help their cause, after all.

Predictably shares in the Company dropped dramatically when the news broke but hopefully calmer waters are ahead for Loewe.