Beltsville, Md. - Ritz Camera, the nation's largest photo specialty retailer, is buying bankrupt No. 2 camera chain Wolf Camera for $84.7 million.
The deal, which requires bankruptcy court approval, would create a 1,300-store mega chain with 12,000 employees and locations in 48 states.
Wolf filed for Chapter 11 protection in June, acknowledging that it bit off more than it could chew with its purchase of the 450-store CPI/Fox Photo and Proex chains from Eastman Kodak in 1998.
Wolf founder/CEO Chuck Wolf will become vice chairman of Ritz under terms of the buyout, with responsibility for directing all of the combined chain's retail sales efforts. His cousin, Ritz head David Ritz, will continue as chairman, president and CEO.
According to Stephen LaMastra, Wolf Camera's executive VP/corporate strategy, there are no plans to close any of Wolf's 400-plus locations in 20 states. Stores will continue to operate under the Wolf moniker in core Wolf markets including Atlanta, where Ritz units will be converted to the Wolf brand.
'Both Wolf and Ritz have exceptional brand equity,' LaMastra said.
Wolf's 4,000 sales employees will be unaffected by the merger, although layoffs are anticipated at its corporate headquarters in Alpharetta, Ga., which will be closed.
'Pursuing this combination is the right decision for our creditors, our associates and our customers,' said LaMastra, who noted that the company weighed all available options before making its decision.
Said David Ritz of the deal: 'For many years Wolf Camera and Ritz Camera have been strong competitors in the photo retail business. This combination would allow us to leverage our individual strengths to make us more competitive, while sharing the best practices and innovations in the retail photo industry.'
Privately held Ritz maintains over 900 stores in 47 states, and ranked 58th on TWICE's Top 100 Retail Registry with $163 million in CE sales last year.
Privately held Wolf Camera, founded in 1974 by namesake Chuck Wolf, ranked 76th on the Registry with $82 million in CE sales last year, representing a 7 percent decline over 1999 revenues.
Wolf's pivotal acquisition of Fox Photo was the culmination of an aggressive growth-through-acquisition strategy that drove its store count from 100 units in 1990 to a peak of more than 700 by 1999. 'The reality is we have been unable to digest our acquisition of Fox Photo,' acknowledged Chuck Wolf, who in hindsight called the purchase 'a mistake.' His cousin and chief competitor David Ritz also built his business by acquisition, but attributes his chain's success and growth to careful planning and controlled expansion.