August 22, 2014 / 12:01 PM / 3 years ago

TV maker Loewe sticks with "Made in Germany" in strategy U-turn

* Loewe to keep main production lines in Germany

* Previously planned to shift more production abroad

* Co-CEO says Loewe TVs to remain luxury goods

* Targets Chinese demand for high-end products

KRONACH, Germany, Aug 22 (Reuters) - German TV maker Loewe, which became insolvent last year and was bought by an investment group five months ago, has binned plans to shift production abroad and decided to continue making most of its models at home.

“For our main production lines we are sticking with ‘Made in Germany’,” part-owner and co-Chief Executive Mark Huesges told Reuters in an interview at Loewe’s headquarters in the Bavarian town of Kronach.

Loewe, started by brothers Siegmund and David Ludwig Loewe in 1923, sought protection from creditors in July 2013 and filed for insolvency in October after a strategy to combat the economic downturn by focusing on premium customers backfired.

Consumers in Europe, where Loewe generates 97 percent of its sales, had shied away from paying between 1,000 euros and 5,000 euros ($1,300-$6,600) for flat-screen TV sets, as Samsung and LG Electronics among other rivals presented far cheaper mass-market models.

Following its insolvency, Loewe planned to shift production of many models abroad to cut costs and allow it to sell cheaper TVs. But Munich-based investment group Stargate Capital, which bought the firm for an undisclosed sum - described only as “high single-digit million euros” - in March, has now changed tack.

“There will be no cheap Loewe,” Huesges said. “A Loewe should be a luxury item, but one that you can still afford.”

Loewe has struck a partnership with Chinese technology supplier Hisense and now sells TVs via four retailers in China to tap demand for luxury goods there.

“Especially in China there is a desire for quality, which customers there value,” Huesges said, adding Loewe aimed to increase the number of outlets it sells through in China to seven by the end of the year.

Keeping production in Kronach also means that fewer additional jobs may be cut than planned, he said. Loewe has already reduced its workforce to just over 400 from more than 1,000.

$1 = 0.7535 euro Reporting by Jens Hack; Writing by Maria Sheahan; Editing by Pravin Char

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below