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Loewe Oz Distributor Backs Restructure

German electronics maker Loewe has announced it will temporarily cease manufacturing and restructure so it can get rid of its union workers and replace them with a smaller workforce to try and increase productivity and profitability, a move its local distributor said should have happened five years ago.

Loewe was founded in 1923 by brothers Sigmund and David Loewe, and began developing televisions six years later.

David died in 1936 and Sigmund fled Germany in 1938 for the US, but regained control of the company in 1949.

After Sigmund’s death in 1962, Loewe was majority acquired by Philips, who shifted the company focus primarily to televisions.

Philips sold its shares in the company in 1985 and Loewe went back to being privately owned.

Loewe declared bankruptcy in October 2013 after failing to keep up with the rise of Korean companies like Samsung and LG, who had gained mass-market appeal and lowered the average price of televisions to a level the German company couldn’t compete with.

The company managed to survive by moving into a self-administrated insolvency, before being acquired in March 2014 by an institutional investor based in Munich.

Loewe CEO Dr Ralf Vogt told German newspaper Frankenpost the company was now owned by the Clearsight Turnaround Fund based in Luxembourg, Tube Capital Partners in Switzerland, and by Loewe itself.

He told the paper the company will try to keep as many employees as possible as it “streamlines” its operations to compete better in the international market.

Loewe will temporarily cease operations from July 1 to restructure.

The company’s Australian distributor Indi Imports welcomed the news but said the restructure should have happened in 2014.

Indi said Loewe televisions it has sold over the past two years will remain “fully backed and serviced” and consistent stock supply will mean Australia “won’t feel a thing” from the company’s restructure.

Indi Imports director Paul Riachi said Loewe has seen strong growth in Australia and his company will continue helping its growth in the future.

“We have re-positioned price, re-advertised the brand, and stocked the complete range for immediate delivery…we are 100% focused on the brand and we will push through this period of re-structure.”

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