Kaufmann provides new focus at Leica

Not all entrepreneurs are founders of businesses. Some take an existing brand and inject fresh life into it. Such is the story of Andreas Kaufmann and Leica, one of Europe’s few remaining camera manufacturers.

Leica has just celebrated its 100th anniversary by moving into purpose-built headquarters in its home town of Wetzlar, 70km north of Frankfurt.

“This offers us more space, but also shows the new Leica in its architecture,” explains Mr Kaufmann. He says the company is expanding internationally and is aiming to develop a branded accessories business, including a new touchscreen camera, designed by Audi and milled from a solid block of aluminium, then polished by hand for 45 minutes.

Leica won its place in the history of photography in 1925 with the first ever 35mm-format portable camera. The camera was later made famous by Henri Cartier-Bresson and his fellow Magnum photographers, and allowed events such as the Spanish civil war, the communist revolution in China and George VI’s coronation to be captured on film with a realism that heavy, stationary cameras could never have achieved.

Later innovations included patenting the first autofocus lens and the M-system that continues to be Leica’s benchmark range. By 2004, however, the company had lost its way and was facing insolvency.

A self-styled “leftist” former schoolteacher, Mr Kaufmann is not, on the surface, a natural turnround chief executive. A life among the mountains and lakes of southern Germany and his early political ambitions to “reform the world”, as he puts it, were not obvious training grounds for the corporate boardroom.

“I had a great childhood. We lived in an idyllic part of southern Germany and I went to a Waldorf-Steiner school,” he says. “In the late 1960s, I was what you might call a leftist. I left school, and with a group of friends we were investigating the so-called ‘dritter Weg’ [third way], as a combination of communism, socialism and capitalism.” Later, he helped found the German Green party.

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But Mr Kaufmann has business in his blood. His family, with the Hartmann family, owned Austria’s largest pulp and paper company, Frantschach, and from the early 1970s Andreas and his two brothers became heirs.

“It was decided,” says Mr Kaufmann, “that none of the family would go into management.” His elder brother entered the family holding company and looked after the investment.

“At that time I led a double life,” recalls Mr Kaufmann. “One half working as a teacher; the other looking at real estate investments in the US.” For all the family wealth, “until the early 1990s, I was always checking my bank account”, he says.

A 15-year career as a teacher came to an end when, he says, he “felt the need to do something different – something on my own to use some of the money”, and so he bought the fabled but failing Leica in 2004.

The brand was facing insolvency, not, says Mr Kaufmann, as a result of being a late entrant into digital photography – on the contrary, Leica had launched its first digital camera in 1996 – but because there were difficulties marrying Leica’s core M-system range with digital electronics.

However, Leica’s first digital camera was in “the upper, upper, upper, upper segment of the market”, he says, and the company only made about 165 of the 75-megapixel models. After co-operating with Fuji in Japan, the company launched its first consumer digital camera in 1998.

“Money is a tool,” says Mr Kaufmann, but he does allow himself one indulgence: “I have quite a few nice classic cars, because our family always loved cars, but never German cars – Alfa Romeo – only the best. It’s not an investment . . . it’s a passion.”

The ex-schoolmaster took just five years to put Leica back into the black. Today, the company has sales of €330m and makes some 140,000 cameras a year at its German headquarters, in Japan and in a preproduction facility in Oporto, Portugal.

Mr Kaufmann’s personal shareholding has contracted from the initial 100 per cent to 55 per cent since Blackstone, the private equity group, bought 45 per cent of Leica in November 2011.

“I am not an investor,” Mr Kaufmann says. “I am fully involved in the strategy of this business.” He lives in Salzburg, Austria, where he has an office, but he has a German passport and sees the straddling of the two countries as immaterial. “It is a kind of border situation,” he says.

At one time, customers would have to wait a year to own a new Leica M. Today, it usually only takes a few weeks, although there may be a wait of three to six months for more specialist lenses, says Mr Kaufmann.

No other camera manufacturer controls its retailing as Leica does. The first Leica store opened in Tokyo in 2006 and today there are 130 Leica outlets worldwide, including a superstore in Los Angeles. “To try to control the price is an interesting effort,” he says, but “it helps maintain a more stable pricing policy”.

Some might see brand legacy as a straitjacket, but for Mr Kaufmann it is “a huge gift for us, an honour. If we can continue to innovate according to the brand’s DNA, the heritage is only advantageous.”

For Leica’s chief executive, entrepreneurship is better expressed by the German word Unternehmungsgeist. “It means to go for it, to do something without stopping,” he says.

“For me it’s also about responsibility: responsibility for the product, for the brand, for the customer and for the staff. As an entrepreneur, you cannot do anything by yourself.”