A bankruptcy judge has given Chicago-based retailer Calumet Photographic the go-ahead to assume control of all three locations of Penn Camera Exchange for $600,000, according to court documents.
The deal comes a month after the Beltsville-based photography store filed for Chapter 11 bankruptcy protection and closed five of its eight locations in the Washington area.
Under the terms of the sales agreement, Calumet will assume the assets and leases for the remaining stores in Rockville, Tysons Corner and on E Street NW. They will continue to operate under the Penn Camera banner. The purchase price includes $250,000 in cash at closing and a $350,000 promissory note due in six months. The buyer has also assumed up to $100,000 of gift card liability.
Two landlords filed objections to the deal on the basis it would deny them thousands in unpaid rent. Rockville-based Federal Realty Investment Trust said it’s owed $18,576 on the lease for 12266 Rockville Pike, and questioned whether Calumet could assure the future performance of the store, according to court documents.
Square 407, the landlord for Penn Camera’s former site at 401 Ninth St. NW, also raised concerns about recouping the $1,773 balance on the lease. Attorneys for both landlords declined to comment on the ruling.
Calumet, with more than 25 stores throughout the United States and Europe, is asking all Penn Camera employees to reapply for their jobs.
Tysons Corner store manager Ramona Stern, who has been with Penn Camera for 16 years, considers the request as “just a formality.” Calumet, she said, “has a good reputation in the industry.”
Calumet President Brian Carroll said the company hopes to retain a majority of the 40 or so Penn Camera employees. No decision has been reached on whether Penn Camera President Jeffrey Zweig, whose family founded the company 58 years ago, will remain. Members of the Zweig family referred all questions to Calumet.
“Penn Camera, like Calumet, has a long legacy in photography and the same type of passionate people. Culturally, it seems like it will be a seamless integration,” Carroll said.
Customers, he added, can expect a wider selection of products, more training workshops and expanded rental services. Carroll noted that Calumet will honor outstanding gift cards.
“We just want to carry on what Penn has developed over the years,” he said. This deal “will be good for the community, especially as far as photography is concerned.”
Penn Camera is one of the region’s best-known spots for photography equipment and workshops. With its selection and experienced technicians, the company rivaled another homegrown retailer, Ritz Camera. Ritz went through its own bankruptcy tribulations in 2008, but emerged.
As it stands, Penn Camera has $4.4 million in outstanding debt, according to court records. Canon USA and Nikon are the company’s two largest creditors, owed more than $700,000 each. Collectively, Penn Camera owes $83,500 to its landlords in the Washington area.
In a statement announcing the filing, Penn Camera attributed the decision to shrink its business to “a dramatic decline in sales performance during the preceding holiday period.”