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Print 39 comment(s) - last by LatinMessiah.. on Feb 28 at 4:27 AM

Ritz is asking the courts to allow it to secure $85 million in financing to continue operating

Many electronics firms and retailers are finding that they simply can’t continue operating in the current global economy. Consumers simply aren’t buying products and retailers large and small are failing.

The latest casualty of the economy is Ritz Camera, which has filed for Chapter 11 bankruptcy protection. Ritz Camera is the country's largest specialty camera retailer with 1,100 stores across the nation.

According to filings made in conjunction with the bankruptcy, Ritz has between $100 million and $500 million of assets and liabilities. In addition to the Ritz Camera stores the chain also owns Wolf Camera, Kits Camera, Inkleys, Camera Shops, and the Boater's World chain.

Ritz cites an increase in gas price, which had previously affected its Boater's World chain and that a reduction in photo finishing revenue as main contributors to the bankruptcy filing. Ritz is asking the courts to allow it to obtain $85 million in financing to keep operating while it restructures.

Ritz points out that the ecommerce firm Ritz Interactive is not affected by the bankruptcy filing. The ecommerce firm merely licenses the Ritz name. A Ritz Interactive spokesman said, "We will continue to work with them (Ritz) as a distributor, but we source through multiple distributors, so we have other options."

By far the largest casualty of the global economic crisis so far has been the folding of Circuit City. The company is currently being liquidated and the liquidation sale so far has moved about $1 billion in inventory.



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BK sounds about right
By ashegam on 2/24/2009 1:23:00 PM , Rating: 4
Not sure about the rest of you but I never even thought for 1 second to go in to their store for my camera or photo needs. They have all ways been full retail price kind of store and the people that work their think they are know it alls.

Why would I go there when I can have photos printed online or at target etc... for alot cheaper.

Or buy camera gear for much less online or bestbuy etc...

They just never had a business model that separated them from the rest. Just another camera shop.




RE: BK sounds about right
By sparkuss on 2/24/2009 1:49:16 PM , Rating: 3
So if that future holds, is that one more nail (e-commerce gains) for Govt to finally hammer home internet taxes (state and fed)?


RE: BK sounds about right
By sparkuss on 2/24/2009 1:51:57 PM , Rating: 2
Sorry, I thought I hit the lower comment. Meant to reply to More online business.

Seems I don't see all the real comments until I log in


RE: BK sounds about right
By omnicronx on 2/24/2009 3:26:31 PM , Rating: 2
Personally I would never buy a camera online without trying it out first. Many B&M stores also pricematch, so why wait for a week or two and pay the shipping if you need to go to the store anyways..

People waste a lot of time looking at B&M stores and go buy it online later thinking they are getting a deal, when in reality they could have done their online research first and then asked for a pricematch and not wasted their time and money.


RE: BK sounds about right
By mindless1 on 2/24/2009 4:43:11 PM , Rating: 3
Except that many stores can't price-match competitively because they have to pay for that B&M overhead, and many customers are greedy enough they will go to the B&M to see it, still be unwilling to pay for that service provided to them and buy it online to save 5%. That's quite easy to do on a camera, even with a pricematch the sales tax is usually more than shipping cost when bought online.


RE: BK sounds about right
By Oregonian2 on 2/24/2009 10:39:28 PM , Rating: 2
Can't do that much with cameras now, most all of the formerly plentiful camera stores are now gone in my metro area (Portland). Still have places like Costco that sell cameras, Fry's, and the like, but not specialty camera/photo stores -- and these places have limited selection and even less expertise. Starting to get to be few in number. Still have a Pro Photo store, hope they're doing okay.


More on-line business...
By kilkennycat on 2/24/2009 1:40:17 PM , Rating: 2
Looks as if Amazon, B&H Photo and Newegg are going to get some nice additional business if Ritz folds....

Notice an accelerating trend here, the weaker, mostly bricks 'n mortar businesses, folding and the on-line business going from strength to strength. At the end of this recession, those that really deserve to be in the bricks 'n mortar retail business, as judged by the public, will still survive stronger and leaner and the strong on-line businesses will have grown substantially. With the recession, the total money-pot has grown smaller, but tilting towards the efficient on-line businesses. You are going to see a lot of the new malls (many built within the past 2-3 years at the periphery of current populations and requiring significant driving-time) closing down while long-established malls close to potential customers are much more likely to survive.




RE: More on-line business...
By Spivonious on 2/24/2009 1:46:45 PM , Rating: 2
I think we'll see more b&m businesses improve their websites first.

On a sidenote, I did a quick compare of ritzcamera.com and newegg.com, and Ritz beats Newegg on all of the camera prices I checked. I think in this case it was a lack of marketing. I've never heard of Ritz Camera before this article, yet I order from Newegg multiple times each year.


RE: More on-line business...
By Lord 666 on 2/24/2009 2:53:39 PM , Rating: 3
Ritz camera is a solid B&M and online business for cameras. Typically retailers have cheaper prices for their core products versus fringe extension items. Newegg does much more volume on Intel processors and motherboards than Nikon gear.

Check out ritz.com, bhphotovideo.com, and adorama.com as they do strong business in B&M and etailer including being reputable with fair return policies and knowledgeable staff.


RE: More on-line business...
By maven81 on 2/25/2009 5:20:10 PM , Rating: 2
I don't know much about Adorama's web service, since I've never had to order anything from them online, as they are literally a few blocks away from my workplace here in NYC. But their brick and mortar store is staffed by a few morons. One time I bought something from them and did not open the box until after I left the store. (It was sealed, I had no reason not to trust them). When I got home it turned out that item wasn't at all what it should have been, not only that but it clearly wasn't even new. I came in the next day, tracked down the same salesman and asked him what the deal is. He told me "well sometimes things look different on the picture". To which I replied that they didn't even look even remotely similar, which didn't phase him at all. So I pointed it out that it's not even new, there's dust on the inside. He didn't even blink, took out a can of compressed air, and started opening the thing up and cleaning it. Then said "there, that's better no?". At that point I lost it and asked to speak to the manager. Turned out someone bought something from them online, then put something else into the box and returned it. They didn't even bother to check if it was the same thing, just resealed the box, and put it back on the shelf.
That probably should have taught me to never go there again, but it's the only camera store within walking distance. So I went there another time to buy a lens. I bumped into the same guy who said "you know... aside from this one I also have the same one that comes without the box, I can give it to you for a bit less". That's when I said for sure I'll never deal with them.

If you're going to order from an NYC brick and mortar place order from BHphoto, or JandR. Don't support these clowns.


RE: More on-line business...
By dxf2891 on 2/24/2009 2:54:08 PM , Rating: 2
Nah, I'm sure they'll be some politician who will find a way to tax them and us into oblivion. When the market finds away around the system (ecommerce vs in store purchase) the government always finds a way to get their taste.


RE: More on-line business...
By bankerdude on 2/24/2009 4:27:45 PM , Rating: 2
They already do. My state income tax return requires me to declare any online purchases that I made without paying sales tax, so they can charge me a "use tax" on those purchases to recover their lost tax revenue.


RE: More on-line business...
By tmouse on 2/25/2009 8:28:57 AM , Rating: 2
Expect A LOT more B&M stores to follow, regardless of their business models. Were about 1/3 to 1/2 way through the private housing meltdown; the commercial property collapse has yet to really pick up but it will fast. Store chains simply cannot afford the "value" the property holds. Many states use property values to assess school taxes, old age care ect. This has been a major factor in the uncontrolled growth in property values, as it provided a blame free way to get more money and still say you have held your ground on tax rate increases. Banks then pushed for people to borrow against this artificial equity which fueled our economy. Now prices are in free fall but things like schools still have to be funded. No one can afford to buy houses or pay the taxes on the current ones and they now could owe more than the house is worth changing the secured debt to essentially unsecured. For businesses this is also true. Properties which could once be considered an asset are now becoming a liability. Couple this with people no longer being able to spend, (not from savings or earnings but ever increasing debt) and were in for a rough ride. I expect a lot of increases in property tax rates, more states adopting “use taxes” and / or a major push for an internet tax.

Sometimes I think the countries new national anthem will be (from the beach boys)
"and we will spend, spend, spend til the country is for sale on e-baaay"


Sucks
By FITCamaro on 2/24/2009 12:47:57 PM , Rating: 2
Probably will mean even more people will be out of work.

Bring on the "I'm glad they're failing" people.




RE: Sucks
By sweetsauce on 2/24/09, Rating: 0
RE: Sucks
By Lord 666 on 2/24/2009 2:31:06 PM , Rating: 4
Maybe what once a joke that something is Obama's fault is no longer funny since its reality?

Case in point, Hillary Clinton's sarcasm on Obama's sophomoric views and approach on "fixing" the country...

http://www.cnn.com/2009/POLITICS/02/22/obama.so.fa...


RE: Sucks
By FITCamaro on 2/24/2009 8:00:42 PM , Rating: 3
He makes himself look like a fool and a socialist on his own.


come on!
By kattanna on 2/24/2009 2:16:09 PM , Rating: 5
quote:
that a reduction in photo finishing revenue as main contributors to the bankruptcy filing


wow.. really? over the last few years there has been a SHARP rise in the use of digital cameras and photo printers for home users. This isnt something that happened suddenly in the last month, but over many years.

failing to adjust your business to changing consumers needs yields little to no sympathy from me.




heh
By yacoub on 2/24/2009 1:21:25 PM , Rating: 2
Always wondered how they stayed in business selling everything at MSRP.




It Figures...
By cubdukat on 2/24/2009 3:24:36 PM , Rating: 2
I just renewed my Ritz Rewards membership after five years away from it.

Guess it's just as well; people seem just as content to take their film/digital pix to the nearest Walgreens or CVS where some minimum-wage hump just sets it and forgets it.

Looks like I picked the right time to start getting out of 35mm...




Global economy my left nut...
By LatinMessiah on 2/28/2009 4:27:17 AM , Rating: 2
It's their poor sales practices that got 'em in this pickle. I needed a Polaroid camera one day so I walked into a Ritz store and the salesman noticed I was interested in it, so he gave me a 50% discount without any hesitation. The only catch was that he would only accept cash and not be able to issue me a receipt. I gladly paid and ran outta there. Those Ritz stores have always looked shady to me.




Economics 101
By Beenthere on 2/24/2009 2:35:15 PM , Rating: 1
This ain't rocket science, it's economics 101.

In the U.S. we are losing 600,000+ jobs every single month and it's only getting worse by the day. When people lose their job they only buy necessities like food instead of the goods and services they use to buy when they had a full time job. As a result the suppliers of goods and services experience lower sales and they lay off employees. These employees spend less and other people lose their job.

We are in a world wide economic meltdown that will last a decade or more yet many people are oblivious to it all, until they lose their job and home.




how about
By tastyratz on 2/24/09, Rating: -1
RE: how about
By ZipSpeed on 2/24/2009 1:14:10 PM , Rating: 2
Indeed. What happened to survival of the fittest?


RE: how about
By Lifted on 2/24/2009 1:18:04 PM , Rating: 5
What are you talking about? Handout

You have reading comprehension problems?


RE: how about
By s12033722 on 2/24/2009 1:18:17 PM , Rating: 3
They are not looking for a handout, they would be looking for financing from private sources to continue operations. That said, I have a hard time believing they would get financing. It would take a pretty impressive business plan to allow them to compete as a brick and mortar store with all the competition from e-commerce.


RE: how about
By maven81 on 2/24/2009 1:21:59 PM , Rating: 2
There's a huge difference between a business failing because of bad decisions (the banking sector) and a business failing because the price of doing business has gone up (this isn't their fault).
If say you ran an airline, and couldn't fly anymore because the price of gas got too high, what would you do then?


RE: how about
By Spivonious on 2/24/2009 1:43:24 PM , Rating: 3
quote:
If say you ran an airline, and couldn't fly anymore because the price of gas got too high, what would you do then?


I'd attempt to lower my costs (be it through fewer flights, fewer staff, whatever works). If that failed, I'd raise prices. If that failed, I'd declare bankruptcy and find a new line of work.


RE: how about
By tastyratz on 2/24/09, Rating: -1
RE: how about
By vapore0n on 2/24/2009 2:23:44 PM , Rating: 3
quote:
Among the largest unsecured creditors are Nikon Inc (7731.T), with a $26.6 million claim, and Canon USA Inc (7751.T), with a $13.7 million claim, the bankruptcy petition shows.


They clearly are not asking the government for money.

Stop assuming, start reading.


RE: how about
By tastyratz on 2/24/2009 3:23:41 PM , Rating: 2
I stand corrected,
I only commented on what the article and the links in it referenced. I didn't decide to devote time digging deeper.

I found your source for your quote googling and found this also:
http://www.bloomberg.com/apps/news?pid=20601103&si...

it looks like they OWE Nikon/Canon the money (not looking for funding from them)
but they want to get a loan from existing secured lenders


RE: how about
By dxf2891 on 2/24/2009 2:50:43 PM , Rating: 2
You must live in a region where the economy is not being effected by this global economic downturn. In Detroit, when the autoworkers are out of work, so are the retailers, the doctors, the teachers, the policemen, and eventually the politicians. When a region loses its economic base, the entire region suffers.
The region in the aforemention model is the entire global economy. In the U.S. the housing market is in the toilet. People are on the hook to pay hundreds of thousands of dollars for a house worth maybe $60,000. The word socialism is being tossed around alot in the U.S. these days. My question is why wasn't there a problem when the money is being taken from the poor and redistributed to the wealthy?


RE: how about
By Spivonious on 2/24/2009 4:49:03 PM , Rating: 2
So you bought a house for $300k that's now worth $150k. Too bad, so sad. Do people complain about making car payments based on a new car price when their car is only worth 30% of it's new price?


RE: how about
By Nfarce on 2/24/2009 5:37:11 PM , Rating: 2
quote:
People are on the hook to pay hundreds of thousands of dollars for a house worth maybe $60,000.


And there are a lot of people who had no business getting a mortgage in the first place and should have stayed being a renter. That is, until politicians started yacking about lobbying for "fair housing" and all that...

quote:
The word socialism is being tossed around alot in the U.S. these days.


Actually I think the word fascism is more accurate in describing we are heading towards (government control over private enterprise).

quote:
My question is why wasn't there a problem when the money is being taken from the poor and redistributed to the wealthy?


I've heard that said many times as well. So let's see: those who earn less than $30k/yr (the bottom 50% of US taxpayer earners) pay 3% of all federal income tax revenue collected by the IRS from US citizens; those that earn more than $30k/yr (the top 50% of US taxpayer earners with includes the "poor") pay the remaining 97% (including the richest 10% who pay 71% of it alone). Now exactly how in God's name is money taken from the poor, who have little to nothing to begin with and if anything have negative income (that's government assistance) and then distributed to the wealthy?

That's some sort of joke, right?


RE: how about
By Nfarce on 2/24/2009 5:39:20 PM , Rating: 2
Oops, I meant to say the bottom 50% includes the poor, not the top 50%.


RE: how about
By Smurfer2 on 2/24/2009 8:52:22 PM , Rating: 2
I like your post and agree, well thought out. However, it is worth noting two things:

While your assessment on moving towards fascism is correct in that one respect, in the grand scheme of things, we are not moving towards fascism. Fascism is a right wing movement and also requires a strong focus on nationalism and militarism.

Second, the rise of the thought that money was being taken from the poor and given to the rich was the fact that median salary has not moved much in the last decade and the rich are paying less taxes. Does that really mean redistribution of wealth? No, not really.

P.S. 30k/yr is a pretty low cut off....


RE: how about
By Nfarce on 2/24/2009 10:05:43 PM , Rating: 2
quote:
Fascism is a right wing movement and also requires a strong focus on nationalism and militarism.


Yep. Mussolini & Hitler proved that well. But at the end of the day, it doesn't matter if the ideology comes from radical right thought or radical left thought and everything with it to back it up. What matters is what it is : government control over private business.

quote:
median salary has not moved much in the last decade


Huh. The last time I checked, median salary was always median salary. Otherwise, if it moved up or down, it would then be called upper or lower salary. :p

quote:
the rich are paying less taxes.


The IRS data says otherwise, my friend:

1999: Top 10% ($88k and up) paid 66% of all IRS federal income tax by US citizens.

2006: Top 10% ($109k and up) paid 71%.

The number for the bottom 50% in both above years, (below $26k and below $31k respectively salaries), paid 4% and 3% respectively.

quote:
P.S. 30k/yr is a pretty low cut off....


Read it for yourself...

http://www.ntu.org/main/page.php?PageID=6


RE: how about
By Nfarce on 2/24/2009 10:26:09 PM , Rating: 2
Oh, and when Obama lets the tax cuts expire in 2010 and pulls through with his promise of taxing the rich more to half the national debt he ballooned in four years (is he going to walk on water next?), guess which way those percentage paid numbers for the top 10% are going to go? Up or down?


RE: how about
By omnicronx on 2/24/2009 3:21:31 PM , Rating: 2
Filing for Chapter 11 is not a handout. Why even comment on something as basic as Chapter 11 bankruptcy if you have no idea what it is?


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