Ritz Camera & Image of Beltsville — one of the world’s largest retail photography companies — will be largely liquidated after its bankruptcy auction failed to secure buyers for more than a handful of stores.
Only a half-dozen stores, plus websites Ritzpix.com and Ritzcamera.com, will remain from the company’s 131 current stores, Marc Weinsweig, chief restructuring officer for Ritz, said in an email to The Gazette.
C&A Marketing, a New Jersey global distributor of digital cameras and related accessories, acquired the half-dozen stores for about $1 million, while Hilco/Gordon Brothers will liquidate the rest, according to the bankruptcy filings. C&A did not return requests for comment.
Ritz was unable to sell most of its stores during its bankruptcy auction Thursday.
“The main issue with a larger store chain was liquidity to fund the inventory for the stores,” Weinsweig said. “There is a bit of chicken and egg in this industry as to whom is going to fund first. ... Vendors [by providing more credit] or investors [by providing more equity]. Unfortunately, neither happened so we ran out of money to fund the 137-store chain even though we were on track to a profitable 2012 prior to filing.”
Ritz’s sales were up 20 percent in May from a year earlier, Weinsweig has said previously.
The liquidation comes after Ritz filed its second bankruptcy under Chapter 11 in three years in late July. At the time, Ritz tried to restructure itself by closing half of its 265 stores. Ritz selected 137 of its most profitable and largest stores to remain.
During its original Chapter 11 bankruptcy in 2009, Ritz sold 400 camera shops and 130 of its Boater World stores. 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 2011, according to published reports.
“It’s sort of unusual,” said Michael Lichtenstein, a lawyer with Shulman, Rogers, Gandal, Pordy & Ecker in Potomac. Lichtenstein served as counsel to the creditors committee during the bankruptcy proceedings for Penn Camera Exchange, also originally of Beltsville.
Penn Camera was able to find a buyer in Calumet Photographic of Chicago for its remaining store in Rockville.
“It’s quite a blow unfortunately,” Lichtenstein said of Ritz’s demise. “It’s just a different market these days. Profits are down.”
Some of this decline can be blamed on online retailers such as Amazon and big-box stores, Brian Zweig, district sales manager for Penn, said previously.
“This is often what happens if you don’t have competitive leases. People don’t want to enter in,” Lichtenstein said. “But usually there’s someone looking for a bargain. One would think someone would pick up a certain amount of stores.”
Weinsweig said no information was available on which Ritz stores will remain open.
“Ritz Camera was a valued business in Prince George's County for many years. It is unfortunate that, like so many others, they fell victim to rapidly changing technology in their chosen line of business,” Pradeep Ganguly, senior vice president of the Prince George’s Economic Development Corp., said in an email to The Gazette.