Ritz Camera Centers put itself on the auction block.
The cash-strapped camera chain, which filed for Chapter 11 bankruptcy protection in February, said it has insufficient funds to continue operations through the summer and is hoping to sell all or part of the business as a going concern.
Short of that, the company will be forced to liquidate its assets in an open auction slated for today, according to a motion filed earlier this month with the federal bankruptcy court in Wilmington, Del.
Ritz Camera CEO David Ritz said he was confident his namesake business would emerge from Chapter 11, and was in negotiations with two potential buyers, either one of whom would continue operations.
The company said its decision to proceed with an asset sale “is a normal and customary means of facilitating an exit from Chapter 11 bankruptcy,” and that the sale and auction is simply the next step toward completing its Chapter 11 proceeding.
Following the bankruptcy filing in February, the company closed half of its 800 camera stores and shut its 130-unit Boater's World chain in a recently concluded fire sale. Despite the actions, which lowered its costs and increased its liquidity, Ritz is unable to fund operations through the summer or purchase inventory for the fall holiday season, and is seeking a speedy asset sale to avert September rent payments, court documents show.
The nation's largest specialty camera and imaging products chain was forced into bankruptcy amid declines in its camera and boating operations and demands by lenders to boost its reserves. The business, which includes the Ritz Camera, Wolf Camera, Kits Camera, Inkley's and The Camera Shop store brands, was founded in 1918 as an Atlantic City portrait studio by Benjamin Cohen. His grandson, current CEO David Ritz, led the 2001 acquisition of cousin Chuck Wolf's Wolf Camera chain, which boosted the store count to over 800 locations in more than 40 states.
The company raised more than $40 million from its Boater's World fire sales, and was expected to sell some $50 million in close-out imaging inventory, which included digital cameras and accessories, d-SLR compact cameras, digital frames, binoculars, camcorders and video accessories.
The sales were conducted by the same joint venture that liquidated Circuit City's stores, comprised of Great American Group, SB Capital Group, Tiger Capital Group and Hudson Capital Partners.