Loewe's Strategic Shift: A Legacy TV Manufacturer Expands Its Horizons

The renowned German television manufacturer Loewe, which has been producing high-quality TV and audio devices for over a century, is embarking on a significant transformation. Previously facing financial challenges, the company is now diversifying its product offerings beyond traditional electronics to include items such as coffee machines.

As part of this strategic pivot, Loewe's CEO, Aslan Khabliev, emphasized the emotional connection many people have with coffee, stating that nearly everyone consumes it. The company plans to introduce a coffee machine designed for personal use, as well as a professional-grade coffee maker meant for restaurants and cafes later this year.

According to industry data from the gfu, the market for coffee machines in Germany has seen growth, with sales of espresso machines increasing by 3.5% over the previous year. Revenue from these machines rose by 6% to 74 million euros during the same period, highlighting a robust market demand.

Loewe has historically catered to a niche market focused on premium television products. However, Khabliev noted the inherent risks of remaining in a niche, referencing the company's previous bankruptcies in 2013 and again in 2019, which prompted a reevaluation of its business model. Under new ownership since late 2019, the company is determined to adapt to changing market conditions.

Market trends indicate a slight decline in demand for televisions in Germany, particularly for smaller screen sizes, while larger models continue to see stable or even increased sales. Consumer preferences have shifted, with technological features becoming more crucial than price when it comes to purchasing decisions. Many manufacturers are now focusing on integrating televisions into smart home systems, presenting a significant opportunity for innovation.

Khabliev noted that whereas televisions were once central to household entertainment, viewing habits have changed, leading to reduced screen time. Nevertheless, the demand for televisions remains, with every home and hotel room still requiring at least one unit.

The company has not been immune to broader economic challenges, including the impacts of the COVID-19 pandemic and geopolitical conflicts, which have affected sales across the industry. Loewe's revenue has not yet returned to pre-bankruptcy levels, with projected earnings of approximately 60 million euros for 2024, up from 44 million euros in 2023.

In an effort to bolster its brand presence, Loewe has partnered with football superstar Kylian Mbappé, who serves not only as a brand ambassador but also as a stakeholder in the company. This collaboration aims to enhance the brand's visibility and appeal in international markets.