Edward C. Ritz can recall the moment his retail camera business became a household name. When he tells the story, he leans back in his chair and draws a postage-stamp-size box in the air to depict the size of an ad placed in the old Evening Star newspaper in the 1940s.
When all the other Washington photo shops were charging 60 cents a roll to develop black-and-white film, Ritz's older brother and Ritz Camera Center Inc.'s original owner, Benjamin Ritz, advertised the service for 25 cents a roll. That caused such a run on the store at 11th and G streets NW that Benjamin asked his baby brother, Edward, to come down from St. John's College in New York to help him with sales. Edward Ritz bought his brother's share in 1960 and is now the 81-year-old chairman of the Beltsville company.
From these beginnings sprang a quiet family empire, a sprawling national network of stores selling cameras, photographic services and various other high-tech gadgets (the family also owns a chain of power boat stores). Yet the relative obscurity of the Ritzes themselves -- few outside of the photographic industry know who is behind the store's name -- masks an intense, competitive family willing to struggle even against itself in a fierce battle for market share.
Ritz Camera is the largest specialty camera retailer in the country. Sales come to about $800 million annually, industry analysts estimate. In September it opened its 1,000th store. Ritz's growth has come via a combination of new stores and acquisitions, accelerating to an average of about 70 to 90 new stores a year over the last six years.
Edward Ritz, in his soft voice, says he's amazed that Ritz Camera -- which started as a one-man portrait studio in Atlantic City, N.J. -- has swelled into an industry dynasty spanning three generations.
"It's a family business, and it should stay that way," said Edward Ritz, and though his company now employs about 7,000 people, it is still owned almost entirely by a few members of the Ritz clan.
Edward's son, David, 50, is now the president and chief executive. Linda Dolphin, the elder Ritz's daughter, is vice president and head of the credit department. In turn, Dolphin's son, Jonathan Speert, is following in his uncle's and grandfather's footsteps by taking a job just out of college in the import division.
"They're the leader in the field by far," said Mark Millman, president of Towson, Md.-based Millman Search Group Inc., an executive search firm specializing in the retail industry. "It's too late to challenge them; nobody can come in now," because there's a Ritz shop seemingly on every street corner and in every mall already, he said.
Only one other retailer could conceivably contest Ritz's industry leadership, and it's owned by yet another Ritz descendant: Edward Ritz's nephew, Charles R. "Chuck" Wolf, who is not in the family business but competing against it. Wolf owns the industry's next-largest player -- Wolf Camera -- with about 700 retail stores nationally, and the number is growing.
Between them, privately owned Ritz Camera and Wolf Camera control much of the specialty retail camera market, though exactly how much remains uncertain in an age when retailers such as Circuit City, Wal-Mart and Best Buy are potent competitors. Wolf and Ritz, however, compete neck and neck, offering consumers much of the same technology: digital photo scanning; on-site services to restore old and torn photos and transfer images onto compact discs; and Internet-based camera e-tailing and photo transmission, services both companies launched this month (phobo.com for Ritz, store.wolfcamera.com for Wolf).
"We try to beat each other in service or price," said Chuck Wolf, 57, who worked under Uncle Edward from 1957 to 1974.
Both companies pride themselves on being in the forefront of technology, but "they poach each other's concepts so aggressively I don't know which is first," said B. Alex Henderson, an analyst at Prudential Securities in New York.
And now, after avoiding each other's geographic markets, the two have begun to go head-to-head in some cities. Ritz, for example, opened that 1,000th location in Atlanta, where Wolf is headquartered. For its part, Wolf, which already owns about 30 stores in the Baltimore-Washington corridor, plans to expand in this area in the next two to three years, Chuck Wolf said. Since both companies have grown primarily through acquisitions, bidding wars have often pitted the rivals against each other, David Ritz said.
Still, though he doesn't see David Ritz except at conventions, Wolf says there are no "bitter feelings, I don't think." Edward Ritz, a grandfatherly, gentle man, considers himself a mentor to both men. "I'm proud of them both," he said of their parallel success.
But industry watchers say the competition is more than just business. Family relations notwithstanding, the coolness between the cousins is known in the industry, according to Millman.
The two have even taken sides with the ultimate in film industry rivals: Ritz with Fuji Photo Film Co. and Wolf with Eastman Kodak Co. Last year, Ritz purchased 83 photo store locations from Fujicolor Processing Inc., increasing the Ritz presence in the South and West. Wolf Camera -- which prints 80 percent of its pictures on Kodak paper -- bought 449 of Kodak's Fox Photo and CPI shops in 1998.
Retailers like Ritz and Wolf are "important channels for both [Fuji and Kodak]," Henderson said. It adds intensity to the Ritz-Wolf rivalry to have "head-to-head competitors supporting the juxtaposed brands," he said.
Industry on the Rise
The truth of the matter is, the market is large enough -- and growing -- to accommodate both retail kings. The total U.S. photography market -- including cameras, film and processing -- raked in $27.5 billion last year, and industry revenue is increasing at a rate of about 5 percent a year, said Toby Williams, an analyst at New York investment firm Warburg Dillon Read LLC.
David Ritz, who plans to open another 20 stores next year, says the frontier for growth is in taking market share from Wal-Mart, Kmart, Target, supermarkets and other big chains.
David Ritz's level-headed demeanor belies what he calls his "ambitious and aggressive personality," which he says is well known in the business. In his Beltville command post -- a gleaming red-and-white headquarters and distribution complex on an industrial stretch of Route 1 and at the corner of Ritz Way -- he keeps mementos celebrating the solitary, masculine sports he loves best: boating, fishing, flying. "I'm used to winning," he says unapologetically.
For Ritz, who took over as president in 1979, the milestones marking the company's growth over the years are like trophies commemorating his business victories. In 1976, Ritz doubled its store numbers to 100 with the purchase of Fotomat, which introduced quick film processing in their small kiosks. In 1997, he bought 130 stores from Seattle-based Kits Camera, which at the time was the third largest retail camera chain. In August of this year, Ritz purchased the next largest chain, Philadelphia-based Camera Shop, adding another 73 locations.
Meanwhile, in 1988, Ritz had purchased its first Boaters World store, a specialty outdoors retail chain that has grown to 150 stores.
David Ritz now finds himself with little left to acquire. What remain -- save for Wolf Camera -- are small chains and mom-and-pop camera stores. "We'll add more stores, but not at the same pace. Everybody has to take a breather."
The Ritz business is nothing if not private. While the company has all the markings of profitability, only a few know how well it performs.
"There's not a lot of hype; it's a very private culture," Millman said. The company is "as vocal as a clam with laryngitis," is how Kurt Barnard, a retail analyst and publisher of Barnard's Retail Trend Report, put it.
And it's not only the company's financial dealings that are confidential. Ritz keeps everything close to the vest. He sits at the apex of the company's structure, presiding over a pyramid of store managers, sales managers, regional managers and district managers. Beltsville is the nerve center for purchasing, accounting and advertising -- it even makes its own catalogues, right down to taking the picture of each item. Few of the company's operations are outsourced.
Barnard attributes the Ritz phenomenon to its "wonderfully marketed" name brand, expert staff and attractive, well-positioned stores. "The customer is likely to find what he or she wants," he said. "Photography is a very popular activity with billions in sales, so those companies that make friends with the customers who are willing to pay are going to make it."
Millman says Ritz's ability to stay on top of technology -- not only in its retail operation, but also in its efficient warehousing and distribution process -- allows the company to expand quickly and seamlessly. The three warehouses in Beltsville, Denton, Md., and Topeka, Kan., run on state-of-the-art automated systems that automatically select and package stock for each store.
"The technology is changing, [the camera's] functions are changing, and they're right there in a very fast-changing camera business," he said.
Over the years, Ritz added the technology, services and products to adapt to consumer demand. David Ritz said the stores pioneered and popularized services such as one-hour processing, almost instant digitizing and photo restoration.
Digital photography, which accounts for about 10 percent to 15 percent of film and camera sales nationally, is the industry's next big thing, expected to eventually overtake conventional cameras that use film.
Ritz shrugs off hyped-up predictions about digital technology swallowing the industry. Technology will eventually blend photography into telecommunications, the Internet, e-commerce, and the business is prepared for that, he said. But like the accordion-shaped camera and other clunky relics that have been replaced by lighter, cheaper versions, digital, he recognizes, is just the latest vehicle offering the same thing: pictures.
"We're in the business of memories," Ritz said, and what consumers want -- hard copies of the images that make up those memories -- hasn't changed much over the years, and most likely never will.
Over and over, industry watchers have predicted Ritz Camera's demise. First, Polaroid cameras were were going to put it out of business, then the video camera boom became the dark force that was poised to envelop the market. But David Ritz shakes his head victoriously: People "want hard copies, and that's what our business is about: a hard-copy business." The market for digital photography is rapidly expanding, as well as CD- and Internet-based imaging, but photography is about "people's emotions and memories," so there will always be a market for the paper copy.
Edward Ritz, whose office displays generations of cameras once stocked by his family venture, puts it more simply. "Technology and everything has taken great steps," he says, but "the ideas are still the same."