It’s a familiar scenario: the ubiquitous advance of technology grinding down another commercial sector.
Among the latest victims — or at least struggling survivors — is the retail camera industry.
Three years after being spared from liquidation, Ritz Camera & Image of Beltsville, one of the world’s largest photography retail chains, again has filed for bankruptcy protection, as specialty camera stores struggle to compete in a market increasingly dominated by personal digital devices and online shopping.
Back in January, Penn Camera Exchange, also originally of Beltsville, closed five stores and also filed for Chapter 11 protection. Penn later was purchased by Calumet Photographic of Chicago and now retains one store in Rockville.
“People just don’t buy as many cameras,” said Michael Lichtenstein, a lawyer with Shulman, Rogers, Gandal, Pordy & Ecker in Potomac and counsel to the creditors committee in Penn’s bankruptcy case.
New gadgets such as iPads and smart phones, which also take pictures, and home printers are supplanting photography stores, he said.
The number of specialty camera stores in the U.S. has plunged by 50 percent in the past five years, Yuki Matsumoto, executive of marketing research for the Photo Marketing Association International in Jackson, Mich., wrote in an email to The Gazette.
Ritz’s latest bankruptcy case, filed June 22 in federal bankruptcy court in Delaware, comes three years after CEO David Ritz and an investment group, RCI Acquisitions, saved the company from liquidation by purchasing it for $33.1 million. Private equity firm Transcom Capital also invested $8 million in the chain in September, according to published reports.
Ritz has an estimated $50 million to $100 million in both assets and liabilities and from 1,000 to 5,000 creditors, according to its filing. Its largest debts include $2.42 million owed to Nikon in Melville, N.Y., and $1.47 million owed to Sony in Chicago.
When Ritz reorganized during its 2009 bankruptcy, the thought was that if it closed some stores and lowered its overhead, it could sustain itself, Lichtenstein said.
Ritz sold 400 camera shops and 130 of its Boater World stores during the 2009 bankruptcy proceedings.
“But since then, they saw the writing on the wall and said the model’s not working,” Lichtenstein said.
Ritz representatives did not respond to requests for comment.
Personal devices such as phones and computer tablets are not as much a threat to the industry as are online retailers such as Amazon and big-box stores, said Brian Zweig, district sales manager for Penn’s three stores in the Washington metropolitan region and grandson of Penn’s founder.
Penn was established in 1953.
“[The] advantage of online is numerous; but, one is convenience of shopping at home, another is variety of products and reviews available, and another is price,” Matsumoto wrote.
Zweig said the lack of an Internet sales tax is a big hurdle, but Penn tries to compete with better service.
“If someone really wants to learn how to use a camera, to touch and feel how it’s done, that’s what we can provide,” Zweig said.
Since Calumet’s purchase, Penn has been able to “get back up to speed” and fully stock up, he said, adding that Calumet’s 12 U.S. locations and 17 international locations make it easier to get products faster.
“We’re still Penn Camera people,” Zweig said, adding that people often turn to camera shops before vacations.
Print processing also is in a “stagnant to declining trend,” Matsumoto said, attributing that to both large retailers that operate on economies of scale and online printing. This also ties into photo publishing, which used to be the industry’s main source of revenue but now is done primarily by larger retailers, he said.
“I assume the way specialty retailers can survive would be to specialize in niche markets, such as going into portraits photos, sports photos, etc.,” Matsumoto said.