Ritz Camera & Image has filed for Chapter 11 bankruptcy protection again, less than three years after they emerged from their first bankruptcy.
Ritz, like other physical consumer-electronics stores are facing increasing competition from online rivals, and are also suffering from the fact that more people are relying on their cellphones to take pictures, instead of purchasing cameras and other equipment, according to The Washington Post.
Marc Weinsweig, the company’s chief restructuring officer, stated that the company has lacked sufficient capital since exiting their last bankruptcy protection in 2009, even though they saw sales go up by 20 percent in May. The increase was not enough to support operations, even though Transcom Capital, a private-equity firm, invested $8 million in the chain last September. Weinsweig stated:
“With the overhead we had, we had to exit the less profitable stores. It just didn’t work. So we decided to file.”
Reuters reports that Ritz Camera’s filing is just one of several companies who have been forced to file for a Chapter 22 petition so far this year. Hostess Brands (Twinkie company) and Buffets Inc, a family style restaurateur are also repeat filers.
Ritz, based in Beltsville, Maryland, operates almost 300 stores in 34 states, and listed their assets and liabilities of between $50 million and $100 million in the filing, according to Reuters.
The company’s largest unsecured creditors include technology companies like Nikon Inc, Sony Corp of America, Fuji Photo North America Corp, and others.
The Washington Post reports that, along with filing for bankruptcy protection, Ritz Cameras will also restructure the company by closing 128 retail locations and cutting its staff of 2,000 employees in half.