MediumRoastSteam Any commercially driven enterprise will have to be ruthless as they aren’t a charity. While we completely understand the technology, innovations and critically after sales (customers), eventually companies will have to a make a choice; either stand up to competitions or allow it to be sold or taken over.

As a owner, if a big corporation dangles the carrots - equity stake which can grow in the long term, attractive monetary offers on the table, run a division, and so on, it’s going to be very hard not to fall into these monetary temptations.

A company has worked so hard to get up to where it is at this juncture; if some one is giving the owners big figure sums as profit, status quo under a new roof; they may not say no unless they like their entrepreneurial freedom so much. They can see how it goes, see if it works out and go from there. These hold good for any small company.

As far as the customers are concerned, oh well. It’s another story.

      LMSC If they want to place Lelit in high street stores, how might Breville-Lelit want to play it?

      Another question will be, would Breville keep Lelit’s current after sales business model?

      Do you think they would be planning to go into High Street stores, though? I suppose it depends on the definition of “High Street store”. Personally, I see espresso machines as a bit of a niche (pun unintended) market, so …. John Lewis, yeah maybe, but Argos? A bit too specialist, too low-volume? I’d think they’re better marketed through specialists that actually understand the product they’re selling, because by and large, it’s a pretty knowledgeable customer buying them.

      As for after-sales business model, I hope the reason for buying Lelit is that they’re successful as-is, and if so, monkeying with their formula is a recipe for messing up what they bought it for. I’d also hope the terms of the deal include whoever in the current ownership is the driving force behind it stays on, in an executive role, at least part-time. That certainly is a model that works, if done right. A friend of mine recently sold his medium-sized but very successful company to a multi-national, but part of the deal is staying on for several years in a management role. He agreed, in large part because he trousers a big chunk of cash, but also because he offloads a large chunk of the stress and pressure, and gets a good salary to boot. The multi-national get a good addition to their portfolio, but get to keep the person driiving the ethos, the bit that actually made it a success in the frst place. The very worst thing they could do is replace someone like that, someone with the entrepreneurial flair, with a corporate suit with the business soul of a tax accountant.

      Breville will mess with the ‘soul’ of a company like Lelit at their peril. By all means bring their finance clout, and sure, there may be aspects they can streamline, but if they mess with the customer-facing bits too much, they risk killing the golden goose.

        LMSC As far as the customers are concerned, oh well. It’s another story.

        We have seen big corporates swallowing smaller corporations/private enterprise. This is always done to monetise and improve profits. When it happens, both sides always promise they just want to make things better for the customers. They want to inject money, improve R&D, refine the products, enhance user experience - basically, they are philanthropists with only one goal - to make the world a better place and ensure prosperity and happiness to man kind and future generations (this is what VS promised to do with CFUK, didn’t they?)

        Sorry for being a little suspicious and not naïve enough to buy this BS. Both Lelit and Breville are corporates, and as such their prime objective is to make money. Lelit did this up till now by developing and making innovative coffee machines many of us like. Many of us also like their approach to helping customers service their own machines (Lelit Insider videos). Basically - many of us like the company as it was up till now.

        Enters the big fish, smelling money making opportunity and makes Lelit an offer they can’t refuse. For me, being the cynical person that I am, this is warning bell things are likely to change, and this change is unlikely to be to my benefit.

        Every cent Breville puts in - they will want to make a profit on. They will want to squeeze every drop out of their new lemon. Will they succeed and how they will try to do it - I don’t know. But their aim will be to make a profit on their investment. If the best way for them to maximise profits will be to make better machines and give customers better value and better service - then sure, this is maybe what they will do. But in my opinion this is unlikely. From my experience looking at this sort of takeover, in the very best case Breville will let Lelit keep going as they did before without changing much. In the worst case - they will completely ruin it as VS did to CFUK. And of course there are all the grey shades in the middle. The one thing I am sure of is that the ultimate objective of such a move is to make a profit on the investment, and that, in my opinion, is unlikely to benefit coffee enthusiast.

          High street is a loosely defined concept, which has a price point for all buyers. Lelit can find a spot in JL, Currys, Harrods, Selfridges, etc. Can it be sold in Argos? May be, the lower end of the range.

          I do hope they will retain Lelit’s current customer support. In the end, they may retain the current operating model as long as it doesn’t hurt them too much. But, we have to remember it runs contrary to their current after-sales business practice. At the same time, most of the people here won’t mind DIY. This isn’t in the case of the mass market. Perhaps, they may give us a choice - fix it if we think we can with a loss of warranty if we mess it; otherwise, we will fix it for you. Is it fair, may be for some and may not be for others.

          Businesses are run to make money. Let’s not forget it. A few businesses have excellent customer support. If Breville can do that, it’s good.

            LMSC High street is a loosely defined concept, which has a price point for all buyers. Lelit can find a spot in JL, Currys, Harrods, Selfridges, etc

            Getting more coffee machines into ‘high street’ stores would be a huge bonus in my opinion. Depending on where you happen to live, I assume there are some specialist shops (Bella Barista?) where you can view before you buy. For a lot of people, if they wanted to see a machine before buying then their only real choice is Gaggia Classic which is sold in Selfridges or The Breville range sold in JL.

              Having been involved in the purchase of multiple small busineses, it will be very difficult for the Lelit owners to stay motivated under the new owners. Having made a lot of money through the transaction and offset significant responsibilities to Breville; a regular salary won’t be a good enough reason to endure the Breville bureaucracy and ways of working, let alone continue to work hard and take risks.

              There is usually a retention incentive (ownership of shares; price adjustment, etc.) but they only last for so long. Non-compete clauses can sometimes play a role, but with people who don’t need a job or in certain geographies these have little effect… And who knows, we might find the same people working under a different brand in a few years.

              As to Breville, the temptation will be to rationalize what Lelit did and possibly improving the market access of their products. There may be ways to cut costs (custom parts made in China rather than expensive Italian stuff), focus on the most profitable products and possibly invest in the plant to increase volume, but keeping the creativity and risk taking mindset of the original owners will be difficult.

              All in all, Kudos to the Lelit family but I’m not sure that coffee amateurs will gain much from this transaction.

                I feel they might have to look at the Lelit aesthetics if they want to sell their lower end machines to a wider market, I would imagine most coffee amateurs would rather a Sage machine in their kitchen on looks alone.

                Eiffel As it happens the previous owners more often than not, after getting the fat cheque, might stay to hand things over but inevitably go in the end. And who can blame them, their vision is no longer the new company driving force and little would depend on their will/decision.
                Let’s hope the good work done at Lelit will survive and the quality the Lelit’s name epitomise will stay for years to come.

                Current setup: ACS Vesuvius, Nuova Simonelli Mythos One. Past experience, Nuova Simonelli Apia 1 gr., San Remo Capri 1 gr., Bezzera BZ 35e, Fracino Heavenly. Anfim Super Lusso.

                Contact me at: john_yossarian11@yahoo.com

                  DavecUK I’m not sure it can, at least in Canada. Both a Breville dual boiler and an Elizabeth from Lelit are over 2000 dollars each. It’s already a lot. In Australia a BDB costs about a third of it. So we’ll have to wait. I’m happy I have bought my Elizabeth before any modification possibly happening to the quality of this nice espresso maker.

                      Fredcafe I think for everyone everywhere the prosumer machines are a significant purchase. Sadly world events over the last few years mean they are likely to rise further in price. Component prices have increased significantly, and production costs are rising.

                      Contact me

                        2 years later

                        A lot of time has passed, yet Lelits continue to be built in Italy and Inside Lelit continues to provide help and answers on its YouTube account. I bought a MaraX a few days ago (maybe it will arrive at my house today) and the Italian seller confirmed to me that they are built in Italy and that nothing has changed. Opinions?

                          That is good to hear. I have an Elizabeth, and want them to keep making them!

                            dndrich I confirm, at the online store where I purchased (I don’t know if I can give links), Tommaso one of the sellers told me that I had to wait one more day because the Letit 220v had just arrived from Brescia.