Ritz Camera Files for Second Chapter 11 Bankruptcy in Three Years
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Ritz Camera Files for Second Chapter 11 Bankruptcy in Three Years

July 10, 2012

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Ritz Camera & Image, the Washington, D.C. based photography retail chain, filed for Chapter 11 bankruptcy protection last month for the second time in just three years, according to a report from the Washington Post.

Sources say that Ritz Camera was never able to gather enough capital to keep its operations running after leaving bankruptcy in the winter of 2009, despite the recent investment of $8 million by one optimistic investor.

According to the company’s chief restructuring officer, Marc Weinsweig, the company saw sales increase by more than 20 percent last month, but the increased revenues were not enough to keep the company from filing for bankruptcy again.

In Weinsweig’s view, the company had to "exit the less profitable stores" due to its significant overhead costs. He also said that Ritz tried to renegotiate leases with its landlords, but after failing in this effort, decided to head to bankruptcy court.

As part of the company’s restructuring plan, it is looking to close 128 of its 265 consumer electronics stores. In addition, the company plans to lay off 50 percent of its 2,000 employees. Currently, Ritz operates stores in 34 states.

The company’s financial distress comes as little surprise to many industry analysts, who claim that increased competition from online rivals has taken a significant bite out of the sales of brick-and-mortar camera stores.

In addition, advanced cell phone technology allows consumers to take high-quality pictures with their phones, which saves them from having to buy cameras and other photography equipment from outlets like Ritz.

In its bankruptcy filing, Ritz told the court that it has between $50 million and $100 million in both assets and liabilities. The company's largest creditors include Nikon, Fuji Photo North America, and the Sony Corp. of America.

Ritz was founded in 1936 and built a very profitable business by selling cameras and then processing the film used in those cameras. But the digital photography revolution rendered many of Ritz's products and services obsolete, and the company failed to adapt quickly enough to the shifting cultural preferences.


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