Ritz Camera Seeks Bankruptcy Protection

By Randall Chase, Business Week

Dover, Delaware—Ritz Camera Centers, the nation's largest retail photography chain, has filed for Chapter 11 bankruptcy protection.

The Beltsville, Md.-based company submitted its filing Sunday in federal bankruptcy court in Wilmington, estimating assets and liabilities at between $100 million and $500 million. The list of its top 30 unsecured creditors is led by Nikon Inc. and Canon USA Inc., which are owed a combined $40 million in trade debt.

The company said revenue from its profitable photofinishing business has declined significantly with the shift from film to digital cameras, and that 2008 holiday sales were "materially lower" than prior year sales. It also said an increase in gasoline prices, along with other economic factors, led to a sharp drop in sales in its Boater's World recreational marine business last year.

Ritz has about 800 photo stores in 40 states, operating as Ritz Camera, Wolf Camera, Kits Cameras, Inkley's and The Camera Shops....

READ ON at businessweek.com

Mike
(Thanks to Les Hibbert and Jeffrey Greer)

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Comments

[hugh crawford]

Nikon seems to be having much worse luck with this that Canon. Nikon is owed $26.6 million but Canon is out "only" $13.7 million. Nikon is also owed $14.9 from Circuit City whereas Canon doesn't show up on Circuit City's list of top creditors.

[Ken Sky]

So with 2 major chains (Ritz & CC) going out of business, wither bricks & mortar camera shops to give photographers a hands on feel for new camera purchases? Looks like Sonystyle stores will give Sony DSLRs an edge over Canikon - but only if they get some knowledgeable sales staff.

[charlie d]

They should liquidate and be done with it. They were a perfect example of how NOT to run a retail business.

[Rich Read]

It is hard to believe they are gone. I purchased my Pentax istDS from them a few years ago and they delivered it to me here in Ontario,Canada very efficiently.

[Bron]

This is beginning to be scary, in a most unpleasant way. Hopefully Ritz won't go the route of CC, and go away.

[Rich Mattingly]

Since Ritz stole pro photographers' images for a national advertising campaign (the fabulous Kaisers of The Image is Found last year) I have a hard time shedding any tears for them.

[Geoff Wittig]

I recall reading Thom Hogan's predictions for 2009 back in November, and immediately recognizing the accuracy of his observation about camera retailers. He noted that many were hanging on by their fingernails, hoping that a big holiday season would get them over the hump and clear out some of their inventory. Well, we all know how that turned out.

Camera retailers have been on life-support since the photofinishing revenue stream evaporated. Prints from digital cards, inkjet paper and so on provide only a tiny fraction of that revenue. Camera stores were beloved by us fanatical hobbyists, but the sad fact is that they were kept financially afloat by all those 4x6" prints of birthday parties and ballet recitals shot by the masses. And almost all those pictures now remain 'virtual' for their entire existence, e-mailed and sent to cell phones without ever being printed.

Our loss.

[Adam Isler]

I have to say my 2 experience with them have been bad (as in dishonest). So while I'm not sad to see them go, I'm worried about what this means more generally both for the economy and for the photographic cornucopia we've enjoyed so far this millennium.

[Alex Seagull]

Ritz Camera store in my neighborhood close more than a year ago.
I still remember arrogant staff, high prices and poor selection… no, I’m not going to miss them.

[Dick Glaser]

They were always too high priced and had too many gimmicks. Their stores were an alternative to our two local photo retailers here in Milwaukee, tho.

[Daniel Clements]

This is pure speculation, but the reason Nikon took a larger hit on this, and with Circuit City could be because as they muscled their way up from the #2 slot, they would be prone to offering extended terms to the big boys.

As far as an industry shake out is concerned, I wouldn't be too worried. The most susceptible are the very large and the very small. The nimble "fox" size companies will only grow stronger as the field thins a bit.

[Edward Taylor]

I feel for the people who will ultimately lose their jobs, but not for management. I bought from them online about 5 or 6 years ago. I apparently clicked twice and got two cameras instead of one. I couldn't return the extra one without paying a restocking fee. I was so annoyed that I ended up keeping it. I eventually sold it to my brother for a loss.

[Mike]

Ditto all the previous comments. When film reigned, Ritz routinely failed to process it on time. When digital took over, all of their kiosks managed to be on the fritz simultaneously. Plus rude staff who knew next-to-nothing about cameras. Good riddance.

[misha]

Why am I not surprised?

[Bill Rogers]

Ritz Camera and Circuit City had one thing in common: each store had a poorly-trained group of employees. Their product knowledge about cameras and computers was terrible. What's more, they didn't know how much they didn't know, so they would argue with a knowledgeable customer. I won't miss them.

[robert e]

Tough times for leveraged predators.

[Dennis]

I guess we all have our Ritz tales ... I won't miss them either. (I'll actually miss Circuit City a little). It had to be tough - they were a brick & mortar struggling to compete with online businesses, then you get the transition from film to digital and what's Ritz left with ? You can plug your SD card into their machine and pay more for prints than at Walmart ... you can buy a few cameras and maybe get some "expert" advice. (I put that in quotes as a result of my own Ritz story). And you can get cheap Quantarray tripods, filters and cleaning kits. It had to be tough to make rent before the economy turned.

[Randolph]

The big fish eat up the little fish, then the big fish get sick and die. Isn't that the story of the economic bubbles? I won't weep for Ritz, which was a pretty bad place to do business, but I worry about the state of the art.

[Isaac Crawford]

Umm, they are filing for chapter 11, not chapter 7. So they are not "going away," not yet at least. They are trying to restructure their debt to continue being a going concern.

[misha]

"Umm, they are filing for chapter 11, not chapter 7. So they are not "going away," not yet at least. They are trying to restructure their debt to continue being a going concern."

They're finished. They are drowning in debt, and they will not be able to get out from under it. They're going the way of CC. And they're not going to get a bailout.

Businesses have a life span, like a person.

[Jeffrey Byrnes]

This comes as no surprise to me. Based on the conversation I had last week with a Ritz employee and how their store is going to be closed on Sat and Sun/s because of the economy. The discussion also lead to how over the past 4 years Ritz's business has slowed down drastically. Not just based on the economy, but the mere fact that people are not shopping solely at camera shops any more when Major retails such as Best Buy sell the same cameras.

[Charles Hueter]

I haven't frequented many Ritz/Wolfs, but none that I have were any help from the Pentax shooter's point of view.

One of their stores did, however, print 8" x 12" black and whites that blew the prints from HEB (a Texas-based supermarket) out of the water. I'm not interested in printing on my own yet, so I'll need to do more testing to find a decent place.

[bob Rapp]

It is all about the "survival of the fittest" and Ritz has been not well for years.

Nikon, Canon and probably Sony will be the hardest hit due to their marketing strategies.

[Mani Sitaraman]

What? They're still around? I last walked into a Ritz camera store in the late 1970s. Pleasant experience, back then.

[Chaz L]

Isaac's right-- they are attempting a reorganization, although with $13 billion in debt it is hard to like their chances.

And as to the photography companies with the biggest exposures, Fuji Film USA has not only $8 million in receivables, but also a $197 million investment in Ritz (last paragraph of article). Ouch.

[erlik]

"The company listed more than 30 unsecured debtors, including Nikon, which is owed $26.6 million; Canon USA, which is owed $13.7 million[...]"
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/23/AR2009022302669.html

"Ritz owes another $8.4 million to Fuji Photo Film USA Inc., whose affiliate invested about $197 million in Ritz between 1996 and 2001, according to court papers."
http://www.bloomberg.com/apps/news?pid=20601103&sid=ajH_4din7HNU&refer=us

"According to court records, the company entered into a $200 million revolving credit facility in October 2007 with a group of lenders, led by Wachovia Bank as agent. As of the bankruptcy filing, the company owes the lenders about $47.7 million in revolving credit, and $6.8 million in letter of credit obligations."
http://finance.yahoo.com/news/Ritz-Camera-seeks-bankruptcy-apf-14441347.html

And this bankruptcy could be a hard hit for Nikon, coming so soon after Circuit City and their $15M debt. 42 million dollars is not a small thing.

[Mark Finkenstaedt]

I'm not a amateur camera store user but whenever I happened into a Ritz the experience was always underwhelming. I shed no tears for the corporation but I feel for all the employees, vendors and suppliers. This doesn't bode well for any of us.

[Devon]

I got my camera at Ritz and found the staff to be very knowledgeable and helpful! It was more expensive than online, but they offered a super great warranty/insurance program which I purchased. If they go out of business, will that be void??? Or do they use a third party company for that sort of stuff?

[Leigh Youdale]

Well, whatever. Maybe there'll be a flow of new but reclaimed Canon and Nikon cameras and equipment being heavily discounted in the market - either Ritz or the camera manufacturers are going to have to clear stock - probably at cost. And if there are new models in the pipeline they'll want to do it in a hurry.

[amadou diallo]

Times are tough. The NYTimes reports today that Annie Leibovitz has pawned off her copyrights to secure million dollar loans.

[Robert Roaldi]

Funny how the internet has changed things. Initially, it was going to be a force for democratization. Instead, it seems to be becoming a force for monopolization. Instead of a large number of web-based "stores" to choose from online, where supposedly low start-up costs and easy access was a boom for competition, we have a small number of major online suppliers of equipment. Is this good?

[Paul]

In a way I'm surprised, but not really. It seems to have been a poor business decision to stick with photo processing, especially given the ubiquitous influence of the digital camera and inexpensive printers. That's a bit of poor business acumen.

Also, the could have closed a few of the brick and mortars and stuck with the Internet stores. Good luck to all of those employees during the restructure. I hope that they make it.

[Ron W]

I will miss Ritz for color film processing (and they did good work) and the local Ritz store close to where I work (which closed for good President's Day weekend) was always pleasant to deal with. I had good experiences with them, but as other have said, the big box stores and the 'net really undercut much of the retail market. At first, I was using them for digital processing, I stopped because they would not give me full frame 4/3 frames unless I would pay extra. This also undercut their photo printing business.

[Mike Johnston]

Robert Roaldi,
That change had long been underway before the internet ever got here. When I was a kid you'd seldom buy from the "discounters" listed page upon page in the back of Popular Photography and Modern Photography magazines, because of the aura of gypsy retailing and unreliability that hung over them. By the time I was editing photography magazines in the '90s, B&H Photo was selling a third of all the cameras sold in America.

Actually, Ritz was one of the big chains that helped cause the demise of the old stuffed-to-the-rafters big city stores and the quirky little mom-and-pop camera shops in the exurbs where you could get anything and then some. Those are the types of stores whose passage is really to be mourned--they were very cool places, photographic general stores, part junk shop, part museum, where an extended visit was like exploring treasure caves. And, truth be told, the business environment was *never* particularly favorable for places like that. Unless it was well before my time. But I doubt even then.

Mike

[charles wick]

Ritz bought out Providence, RI's premier professional camera store a few years ago.Adlers was and (I hope ) will be a very fine family owned store that was an excellent custom photofinisher as well as dealer for Leica, Nikon and Pentax. I can only wish Jerry and the others the best and hope that he can recover the store from the trustee and keep on with his fine, expert and friendly service.

[eric mac]

More of a reason to visit your local camera store for your stuff. After these chain stores push the little guys under, we are stuck with Ritz/Wolf, who eventually go under due to a poor business plan. My local Ritz use to have an old timer who enjoyed photography and had some good conversations with him, but most of the employees didn't know much about anything. I'm lucky that we still have Helix (just there last week) and Central Camera in Chicago, although I do shop at the local Calumet (a multinational) from time to time for my film and chemistry needs. Going slightly off topic, they have the Fred Picker Zone VI trilogy on dvd now.

Eric

[Tom]

I'll miss ritz photo. Why it seems like only yesterday that they were leaving a greasy thumbprint on the end cell of every negative strip of mine they ever worked with. (Every $*(#)@! one.)

I always loved the "Dude, my last job was at Arbys." look I would get when I would ask about anything related to photography.

Loved the Quantaray lens kits that were "just as good" as the OEM's lenses.

If Ansel Adams ever visited a Ritz I feel pretty confident he'd have driven his Escalade through the front of the store.

(I still have scans of those thumbprints in photoshop and if I find you ...)

[Andreas Friedl]

Ritz reminds me of Radio Shack. I can't figure out how they can possibly still be in business - in this or any other economy.
Andreas

[Bruce Appelbaum]

If they close the local mall store, will no longer have a place to go to get passport photos. That's all I ever bought from them.

[John Roberts]

Ritz always struck me as being to camera stores what Taco Bell is to Mexican food.

[Randolph]

Next, look for the big box stores to go under. Best Buy is having problems already. Shopping is going to get really difficult.