Difficulties At Omas In Bologna ?

[tragique]

I had no idea OMAS wasn't doing well. It would be a shame to lose them, but such is life.

Edited November 16, 2015 by tragique

[flipper_gv]

 

I think that the question is not how much cash you have to put in to buy the company the first time but how much you have to continuously inject to cover the losses and keep it alive.

 

Isn't it like 4:30 pm in Italy right now? How late can this decision be?

[FriendAmos]

 

 

 

This Chinese holding company that owns Omas also holds the Omas brand name and can produce Chinese made Omas pens at a fraction of the production costs in China than in Italy.

 

And the Chinese holding company is not interested in keeping production in Italy and paying Italian salaries to make Omas pens.

 

If the Chinese own the brand and can produce Omas pens in China, then they could have undertaken such production in China from the very day they bought the company. That they did not do so indicates that they have not been averse to paying Italian salaries. What's more, there is no indication that they plan to start producing Omas pens in China.

[Phormula]

 

Isn't it like 4:30 pm in Italy right now? How late can this decision be?

 

So far, no news.

[DevrimJan]

So let me get this straight. I come to appreciate the sheer beauty and majesty, the finesse and elegance of Omas pens just last Saturday, and while looking up some info on Omas on FPN I stumble upon this topic and find out that Omas' is in its death throws, and its fate will be decided upon today. Seriously?

 

To think that the fate of a legacy of 90 years of continuous manufacture of fine pens is to be decided within the next hours is really a terrible thought.

[Phormula]

It seems that for a luxury fountain pen producer the only way to survive is to add other items, such as leather accessories, watches, gift items, ... to the product line.

This is the experience of many small firms.

 

Up to not so long ago OMAS was making everything in-house and they already let go of some employees in an attempt to surive, the headcount was reduced from 30 to 17.

 

Yes, production can be moved to China but I think that the Chinese owners wanted to have the pens manufactured in Italy as luxury items in small volumes for their home market.

A Made in China pen would not had been the same.

[FriendAmos]

O Luxe's interim financial report for 2015 shows that they are in rather sad shape. In such cases it is normal practice worldwide to unload non-profitable operations. That is a more likely explanation than fantasies about stealing Italian technology, shutting down the original company, and then producing them cheaply by the truckload in China.

[freakman]

I am interested in how much a small but important pen company is worth with what sound like perpetual losses. It would be fascinating to me to see their financials.

 

It's also interesting that the latest article says the Chinese owner bought the company so they could use the pens as gifts.

It took Oluxe 60 million USD to acquire OMAS from its previous owner. And by that time(2011), OMAS was already in debt for about 11 million USD for loans.

And Oluxe was planning to put another 16 million USD for expanding the sale network and production earlier this year but due to the poor performance of its business in sales and mining(mainly due to the massive anti-corruption action in China that greatly affects the sales of luxury items), the fund was cut in an annoucement made on 9/18 this year. Oluxe itself is also suffering from heavy losses( 8 million USD per year?), so it might be a reasonable choice to close down the factory.

[jar]

Omas is about the same size as Yard-o-Led in personnel and they each faced similar problems. :Yard-o-Led was lucky enough to get purchased by Filofax where there was a natural synergy and simpatico. Hopefully a similar relationship might be found for Omas.

[freakman]

O Luxe's interim financial report for 2015 shows that they are in rather sad shape. In such cases it is normal practice worldwide to unload non-profitable operations. That is a more likely explanation than fantasies about stealing Italian technology, shutting down the original company, and then producing them cheaply by the truckload in China.

Oluxe was a former jewelry company and they produce much better metal parts comparing to OMAS. The 'technology' OMAS has is not in manufacturing but in designing.

There're a lot of jewelry companies here in China that make forgeries in real gold and platinum and sell it for much less(like 20% to 30% of the original item), and the things they made looks exactly the same comparing to the original one, some are even better. But they just can't afford a good designer, because any failure in design might cause huge losses, and by 'stealing' good designs from others they're still profitable.

[FriendAmos]

Oluxe was a former jewelry company and they produce much better metal parts comparing to OMAS. The 'technology' OMAS has is not in manufacturing but in designing.

There're a lot of jewelry companies here in China that make forgeries in real gold and platinum and sell it for much less(like 20% to 30% of the original item), and the things they made looks exactly the same comparing to the original one, some are even better. But they just can't afford a good designer, because any failure in design might cause huge losses, and by 'stealing' good designs from others they're still profitable.

 

Is anyone making forgeries of or stealing designs they already own? That would be interesting.

Edited November 16, 2015 by FriendAmos

[freakman]

They won't risk themselves to develop pens that are probably profitable even if they can produce it in China with much lower prices.

There're many other ways for Oluxe to make their cash more profitable than putting them in OMAS. And it's even possible that Oluxe itself is having some serious financial problems.

Too bad they spend so much on OMAS which make it almost impossible to buy the brand if they want to recover thier losses by selling.

[freakman]

Forgeries need to be sold in large quantities. And sadly only Montblanc, LAMY and some Parker models are well known enough to sustain such a market.

[FriendAmos]

And it's even possible that Oluxe itself is having some serious financial problems.

 

 

This is what they say in their report:

 

The Group’s turnover for the six months ended 31 March 2015 decreased by 60.0% from

approximately HK$393.9 million last year to approximately HK$157.5 million. The decrease

was mainly attributable to (i) the weakened consumption of luxury goods in Hong Kong and

China (ii) the increasing trend of consumer purchase luxury goods directly from Europe due

to weakened Euro, and (iii) the disposal of retail business in Liaoning in June 2014.

[FriendAmos]

Forgeries need to be sold in large quantities. And sadly only Montblanc, LAMY and some Parker models are well known enough to sustain such a market.

 

That might be so. But I was more interested in this idea of people stealing or forging things they already own (by way of legal purchase with good money).

[esteroids]

I saw a good example of owning the forgeries in the classic car market. I met a fellow member in a car club who bought the name and production rights of a famous car that closed decades earlier. He produced some fiberglass replicas, but he also owned and was a collector of the real thing.

At their national marque meeting and concours he promoted a judging class for the fiberglass replicas. Many owners wanted the replicas kicked out as fakes. But he stopped them by declaring that they are real - "I own the company - I made them!"

 

The funny thing is, he did all of this as much as a joke on the pretentious classic owners as a way to lose a little money doing something he loved.

[jar]

Forgeries need to be sold in large quantities. And sadly only Montblanc, LAMY and some Parker models are well known enough to sustain such a market.

That's simply not correct. There are fake Cartier, ST Duponts, Dunhills and even fake Heros.

[tryphon]

I am interested in how much a small but important pen company is worth with what sound like perpetual losses. It would be fascinating to me to see their financials.

 

It's also interesting that the latest article says the Chinese owner bought the company so they could use the pens as gifts.

 

Rumor is that when the Richemont Group sold Montegrappa back to the Aquila Group, the selling price was one Euro.

[Keyless Works]

 

Rumor is that when the Richemont Group sold Montegrappa back to the Aquila Group, the selling price was one Euro.

Haha...Aquila got robbed

 

On the plus side Oluxe actually has a pretty healthy balance sheet...though cashflows are poor.

[fabri00]

Rumor is that when the Richemont Group sold Montegrappa back to the Aquila Group, the selling price was one Euro.

Normally this happen because the new owner take charge of some millions euro of debts with banks.

 

Is always nice to talk about business of other people's, but offen a real picture is missing, if only part of the total deal is considered.