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Logitech On A Roll, New Categories Coming As Profits Climb

Logitech On A Roll, New Categories Coming As Profits Climb

Now the Company is working on seven new growth categories. 

Late last year restructured their Australian operation, now the Company has tripled their profits after a horror three years when they struggled with poorly designed products and a lack of cut through products that consumers wanted to buy. 

The man credited with turning the Swiss based Company around is Bracken Darrell who joined the PC peripheral in 2012 and became CEO in 2013. 

During a recent interview with US trade magazine TWICE Darrell said that Logitech was now undergoing a “revolution” he said of Logitech who has tripled its profits over the last two years.

“We’ve tripled our profits. We’ve got the highest earning per share in seven years. If you look at the business in constant currency, and then you look at just our retail and e-tail business – excluding OEM and LifeSize, which are different animals – we were declining 8 percent a little over two years ago, and then last year we grew 7 percent. We’ve really flipped. Now it’s all about becoming a growth company” he said.

He now describes Logitech as a design Company which is a similar approach to what arch rival Belkin took when they acquired IDG, the LA based International Design Group. 

“I knew design would be centre of the game plan when I came into the company but I didn’t share that very broadly with a lot of people. But I immediately started hiring the chief design officer, and we immediately started building design principles we’d operate by and then staffing up design”.

 I think Logitech was always pretty good at design. We didn’t have any conventionally trained designers in positions, but we’ve always done a good job at design. I ran the Braun organization out of Germany from 2004 to 2008, and if you know anything about Braun, you know that it was really a design company originally. . That point forward I decided that I wanted everything I did to have something to do with design”. 

He said “I think the consumer perception of a product they use for an iPad is different than the one they use for a PC. I’m not sure it actually has to be, but it’s the way we played it. We played it in a more functional role for the most part in PC peripherals”. 

The key to tablet accessories is that people want to carry it around. They want people to see it. They need it to be beautiful, amazing and functional. It gave us a chance to really create something that’s both beautiful and functional, and I love what we started to do in tablet accessories because I think it’s a little foreshadowing for what we’re going to do on everything else downstream.
Darrell said that since taking over the running of Logitech the consumer appetite for consumer electronics has changed. He said that what Logitech was selling when he took over as CEO was not a good fit for the market. 

“In the beginning of the turnaround we needed to get our costs right. Our cost had gotten ahead of us. We had to do a restructuring; we had to reduce the number of employees. That was the worst thing we had to do. In terms of the biggest challenge – and I don’t know if it really was challenging; it was actually a lot of fun – was starting to put the right players in place and products in place. We were and will always be all about products. . That will always be the challenge – making sure we deliver something that’s differentiated and superior”.

Going forward he said that things were changing at Logitech and that further changes were tipped as the Company changes direction.

“Our strategy is pretty simple. We’re optimizing profitability in our PC peripherals business. We’ve moved a lot of resources from PC peripherals into growth categories, and we’re also working on six or seven new [growth categories]. I don’t know if they will all launch”. 

“We’ve killed a couple; we’ve added a couple. They’re sort of secret projects that are staffed like start-ups. We’ve got different kinds of people running them. It’s like a learning lab as well as a creation lab. We’ll enter new categories over time, although we’re not ready to share right now”. 

He added “Tablet accessories, Bluetooth speakers and video collaboration essentially didn’t exist for us three years ago, and today they’re almost $400 million in sales. So we’re creating the categories now, and it’s our intention to keep doing that and to sustain the growth on the ones we’ve created. It’s a cool, fun strategy.