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© mariusz-szachowski-dreamstime.com Electronics Production | July 31, 2013

Loewe and Hisense agree on strategic partnership

Loewe AG, and the Hisense International Co. has agreed on a joint strategic partnership. The executive boards of both companies have signed an extensive partnership agreement in this context.
The objective of the strategic partnership with Hisense, a Chinese manufacturer of consumer electronics with an emphasis on TVs, is to promote shared synergies in purchasing, production, development, and sales. The partnership is meant to enable Loewe to offer more TVs in the premium brand’s entry level segment in the future. In addition, Hisense will give Loewe long-term access to the latest TV panel technology and attractive markets in China.

“The strategic partnership with Hisense is a central milestone in the continued restructuring of Loewe,” said Loewe CEO Matthias Harsch. “Above and beyond consolidating purchasing potentials, Hisense will give us continuous access to the latest fundamental technologies. This will also strengthen our production facility in Kronach, which we will continue to develop for the manufacture of highly individual home entertainment systems.”

In return, Loewe is offering Hisense a distribution network in Western Europe, in particular in the German-language markets and the Benelux countries. As a first step, Loewe will take on the exclusive distribution for Hisense in the Austrian test market for the introduction of the latest Ultra-HD technology. In addition, the strategic partnership can give Hisense access to Loewe’s TV software encompassing the entire range of functionalities of televisions, including all multimedia and Internet applications.

“The strategic cooperation between Hisense and Loewe is benefiting both of us and will help us to gain market share in Europe based on advanced technologies like UHD,” says Dr. Lan Lin, Executive Vice Precident, Hisense.

After its negative year-end results for 2012, the general weakness of the market for LCD TVs in Europe led to a significant decline in Loewe’s sales for the first half of 2013 as well, dropping by 39% to EUR 76.5 million (H1 2012: EUR 125.6 million). Due to a considerable reduction in sales and production volume, Loewe recorded an EBIT loss of EUR 24.2 million (H1 2012: EBIT loss of EUR 2.1 million).

Another step toward the restructuring of Loewe will be a capital increase involving existing and new investors. This move is meant to strengthen the company’s capital resources. “Our agreements with Hisense have brought us a big step forward in our focus on strategic partnerships,” says Harsch. “In addition to creating the conditions internally, we have now established a solid basis for the ongoing talks with potential investors.”

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