Sales at Ritz Camera were up more than 20 percent in May, but not enough to support operations, said Marc Weinsweig, the company’s chief restructuring officer.
Ritz Camera, he said, has lacked sufficient capital since exiting bankruptcy protection in late 2009, even after private-equity firm Transcom Capital invested $8 million in the chain in September.
“With the overhead we had, we had to exit the less profitable stores,” Weinsweig said, adding that Ritz tried to terminate leases earlier, negotiating a payment to the landlord. “It just didn’t work. So we decided to file.”
As a part of the restructuring, the company, with 265 stores in 34 states, plans to close 128 locations and cut its staff of 2,000 in half. Ten locations in Maryland will shutter, while four will go dark in Virginia.
According to the filing, the company said it had between $50 million and $100 million in liabilities and assets. Its largest unsecured creditors include Sony Corp. of America, Fuji Photo North America and Nikon.
Stephen LaMastra, chief executive of Ritz Camera, stepped down from his role, handing the reins to Weinsweig in the interim as the company is being shopped around. Weinsweig said Ritz Camera plans to go up for auction in September.
Founded in 1936, Ritz built a lucrative empire selling cameras and processing film. But as digital photography became more ubiquitous, the company faltered, watching profits wane and debts mount to more than $60 million by 2009.
David Ritz, whose uncle founded the company, assembled a team of investors to buy the company’s assets at auction. He moved beyond selling cameras to photo imaging, as well, producing calendars, memory books and DVDs using digital photos and video.
Industrywide sales of cameras and camera accessories, however, have been sliding because of the pervasiveness of smartphones with built-in cameras, said Liz Cutting, senior imaging analyst at NPD Group, a research firm.
At the start of the year, Penn Camera Exchange, another Beltsville-based specialty retailer, filed for bankruptcy and closed most of its stores in the region.