Business News - Ritz Files Chapter 11
Ritz Camera, now an 800-store national powerhouse after absorbing rival Wolf Camera in 2001, has filed for bankruptcy protection. It would appear to be the latest "before-Internet" business model operation to have fallen victim to the Internet.
Monday, February 23, 2009
Ritz Camera Files Chapter 11—Triggers Fond Memories of Better Times
Feb 23 2009 4:51PM | Permalink | Email this | Comments (2) |
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Thirty-seven years ago, I walked into the tiny Ritz Camera kiosk store at “The Mall” in St. Matthews (a suburb in my home town of Louisville, Kentucky) and bought my first Canon 35mm SLR—an FTbn—with a 50mm, f1.8 lens. It was a terrific camera and one I’d chosen after attending a live Canon seminar in Cleveland where I was getting my BSEE. The guy behind the Ritz counter was very helpful and knew enough about cameras to aid my purchasing decision.
Back then, Ritz was a small chain of camera stores, but the kiosk store presented a much friendlier environment than Louisville’s more “professional” camera stores. I know because I visited all of them before deciding where to make my purchase. It didn’t hurt that Ritz was the price leader among those stores although not competitive with stores in Chicago (like the gone but not forgotten Altman's on Wabash Street) or the advertisers in Popular Photography and Modern Photography. I know because I scrutinized the ads in those magazines carefully.
Fast forward to today, or actually yesterday. Ritz Camera, now an 800-store national powerhouse after absorbing rival Wolf Camera in 2001, has filed for bankruptcy protection. The debts have mounted and sales are in the dumper. Photofinishing sales, a Ritz mainstay profit center, are also poor.
What’s to be gleaned from these events? I’m no expert, but I can say that I’ve not bought much at Ritz or Wolf for years even though there are several here in Silicon Valley that I’ve visited a few times. Before you accuse me of the widespread practice of visiting the store to try stuff out and then ordering on the Web, you should know that my major camera purchases are indeed local. I buy either at San Jose Camera or Keeble & Shuchat in Palo Alto. Accessories I buy online, usually from eBay. But those accessories are so cheap, I don’t bother trying them out first.
The Internet is clearly a major factor in this situation. The availability of cheap accessories such as screw-on lens filters from low-cost sellers on eBay cuts into after-purchase accessory sales. But a mass-market sales mentality also has to be a factor. Almost every time I’ve gone into a Ritz or Wolf Camera store in the past several years, I’ve been disappointed. The selection seems very limited in these small stores, as limited as they were in that tiny kiosk store I patronized in 1972 but the times and the competition are very different today. Accessories such as batteries and memory cards are way overpriced at Ritz and Wolf compared to Fry’s Electronics down the street. If I want to try a good selection of cameras and talk to knowledgeable people, then I know I need to go to San Jose Camera or Keeble & Shuchat.
So a business model that worked well in the 1990s doesn’t seem so smart today. I can’t help but feel that the currently liquidating Circuit City stores fall into the same category. Differentiation is important in this cutthroat-competitive world, for stores and for products. Which leads to this question: How are you differentiating your company’s offerings? It’s an important question.
Posted by staff at February 24, 2009 07:31 AM