July 10, 2012
By John Clark
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.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.