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Hi Pentaxian friends.
Another shocking news. I can understand why Pentax might not have been selling as much as Nikon and Canon. I don't think that Pentax could have extended its credit line to Ritz the same as Nikon and Canon has. It was a smart move in the end! I wrote about brick & mortar stores disappearing, several times on this blog site. If they don't have a major presence on the Internet, none will be able to survive. In the end, we all loose.
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I believe this came from the WashingtonPost.
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 said23 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. It also operates 130 Boater's World stores. The company, which has about 6,400 employees nationwide, recorded sales of just under $1 billion last year.
"Despite Ritz Camera's continued success in selling cameras and photographic equipment, the loss of revenues and profit margins from the diminution of the photofinishing business proved too much of a burden, coupled with the losses experienced by the Boater's World business in 2008, for Ritz Camera to remain a profitable company under its current structure," Marc Weinsweig of the financial advisory firm FTI Consulting Inc. wrote in a court affidavit.
Ritz's board has approved the appointment of Weinsweig, senior managing director in FTI's Washington, D.C., office, to serve as interim chief operating officer and chief restructuring officer.
In its initial filings, the company is seeking interim court approval of a credit facility of up to $85 million with existing lenders. According to Weinsweig's affidavit, the company would be unable to meet payroll and other expenses without the interim financing approval and would be forced to shut down.
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.
In January, Wachovia, acting on behalf of the other lenders, imposed additional reserves on Ritz's borrowing base, reducing the company's available credit.
"Given the company's internal challenges, including unprofitable store leases and Boater's World losses coupled with the overall economic recession, the company had no choice but to seek relief under Chapter 11 ... to preserve the possibility of being able to restructure its business and financial affairs and continue as a going concern," Weinsweig wrote.
In addition to its credit facility with Wachovia and other banks, Ritz owes about $13 billion in debt to other parties under a series of debentures issued in 1995.
In addition to Nikon and Canon, Ritz's top unsecured creditors include Fuji Photo Film USA. which is owed more than $8 million.
FPL Holdings Inc., a wholly owned subsidiary of Fuji Photo Film Co., invested $197 million in Ritz through purchases of preferred stock from 1996 through 2001, money that was used by Ritz to acquire competitors, including the bankruptcy estate purchase of Wolf Camera in late 2001. According to the bankruptcy petition, FPL would own a third of Ritz's Class A common stock and 35 percent of Class B common stock if it converted its preferred stock.
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 said23 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. It also operates 130 Boater's World stores. The company, which has about 6,400 employees nationwide, recorded sales of just under $1 billion last year.
"Despite Ritz Camera's continued success in selling cameras and photographic equipment, the loss of revenues and profit margins from the diminution of the photofinishing business proved too much of a burden, coupled with the losses experienced by the Boater's World business in 2008, for Ritz Camera to remain a profitable company under its current structure," Marc Weinsweig of the financial advisory firm FTI Consulting Inc. wrote in a court affidavit.
Ritz's board has approved the appointment of Weinsweig, senior managing director in FTI's Washington, D.C., office, to serve as interim chief operating officer and chief restructuring officer.
In its initial filings, the company is seeking interim court approval of a credit facility of up to $85 million with existing lenders. According to Weinsweig's affidavit, the company would be unable to meet payroll and other expenses without the interim financing approval and would be forced to shut down.
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.
In January, Wachovia, acting on behalf of the other lenders, imposed additional reserves on Ritz's borrowing base, reducing the company's available credit.
"Given the company's internal challenges, including unprofitable store leases and Boater's World losses coupled with the overall economic recession, the company had no choice but to seek relief under Chapter 11 ... to preserve the possibility of being able to restructure its business and financial affairs and continue as a going concern," Weinsweig wrote.
In addition to its credit facility with Wachovia and other banks, Ritz owes about $13 billion in debt to other parties under a series of debentures issued in 1995.
In addition to Nikon and Canon, Ritz's top unsecured creditors include Fuji Photo Film USA. which is owed more than $8 million.
FPL Holdings Inc., a wholly owned subsidiary of Fuji Photo Film Co., invested $197 million in Ritz through purchases of preferred stock from 1996 through 2001, money that was used by Ritz to acquire competitors, including the bankruptcy estate purchase of Wolf Camera in late 2001. According to the bankruptcy petition, FPL would own a third of Ritz's Class A common stock and 35 percent of Class B common stock if it converted its preferred stock.
1 comment:
I found this blog by searching for "Pentax going out of business" in google. I was searching for information about this as I am considering buying a Pentax camera and was told by an employee of Kits Camera in Southcenter mall (Tukwila, WA) that they are no longer carrying Pentax cameras. He had quite a bit to say about Samsung buying them out and that I would not have very good support if I bought a Pentax.
After doing some of my own research, I found out there have been numerous reports of Ritz and other affiliate store employees telling customers this incorrect information about Pentax cameras. (http://www.pentaxforums.com/forums/everything-else/5073-pentax-going-out-business.html)
I find it quite entertaining that the employees are talking trash about Pentax cameras because Pentax would not extend them a line of credit to sell their products. It looks like it was a wise decision on Pentax's part as they owe Canon and Nikon a good chunk of change.
The wikipedia page on Pentax says they have merged with Hoya Corporation, who is mainly interested in Pentax's medical equipment. They have recently joined forces with Samsung to design and release some cameras and worked together to market to US customers to try to regain some market share from Canon and Nikon, however this does not mean that Samsung bought out Pentax.
Pentax is releasing new models of cameras. The quality of their cameras and lenses have always been great quality. They are being quite innovative on their marketing tactics. I see no reason to believe the information being dished out at Ritz, Kits, and other franchise camera stores that Pentax is going broke. Maybe their bosses are telling them that to cover the fact that they are the ones about to be in the unemployment line.
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