Ritz Camera aims to remake itself by diversifying its inventory
Monday, December 28, 2009
David Ritz showed off his new toys -- flat-panel TVs, compact laptops and smartphones -- at his camera shop in Rockville.
Like General Motors and Chrysler, Ritz's company, Ritz Camera, emerged from bankruptcy protection this year with a plan to revamp its operation. Now known as Ritz Camera & Image, the reborn retailer has expanded its scope from just selling cameras, camera equipment and photos in a bid to appeal to a tech-savvy generation.
"We're not a camera store anymore -- we're an image store," said Ritz, who serves as the chain's chief executive. "We sell all products that allow you to either take, share, create or view your images."
Whether the new product lines catch on and succeed in turning around the retailer is an open question. As a privately held company, Ritz does not disclose its sales figures. Ritz said sales in the photo-imaging part of the business -- including cameras, calendars, DVDs and memory books -- "have increased significantly." But the company, he said, is still building the new product lines.
Mark Millman, president and chief executive of Millman Search Group, an Owings Mills, Md.-based retail consulting and executive search firm, applauded the new strategy.
"It's probably the right approach to take," Millman said, adding that the retailer is in a better position now to succeed because it shed its least profitable stores. "The camera [business] isn't what it used to be."
But given that consumers have dramatically pulled back on such discretionary purchases as televisions, computers and phones, other analysts said this may not be the ideal time to expand into those areas.
"I think it's great they've emerged from bankruptcy, but their model is troublesome," said Kenneth Brown, president of Washington-based Research Connect, which conducts financial analysis of retailers and other companies.
Brown said it will be difficult for Ritz to make money selling TVs, phones and laptops. Ritz, he said, is entering a very cluttered market space in the electronics sector with particularly strong competition from powerhouses Best Buy and Wal-Mart.
"If I were Ritz, I wouldn't focus on selling what everyone else is selling, but focus on breakthrough technology no one else has -- some highly specialized laptop you can't get at Best Buy," he said.
Founded by Ritz's uncle Benjamin Ritz, the company began in 1918 as a single portrait studio on the Atlantic City boardwalk. In 1936, Benjamin Ritz was joined by his younger brother Edward Ritz, who is David Ritz's father, and the business expanded to a photo-processing lab at 11th and G streets NW in the District. The following year, the brothers set up shop in Baltimore and began selling cameras.
David Ritz, who took over in 1969, expanded the retailer into 800 stores in 40 states by acquiring regional camera shops and film processing chains, including Fotomat. But the company faltered when customers shifted away from photo processing, which was highly profitable, to digital photography.