Friday, December 26, 2014

Ritz rebuilds in deals with Verizon, PNC

"We're looking at reopening some stores in Philadelphia"

Ritz rebuilds in deals with Verizon, PNC

Ritz Camera, founded in Atlantic City in 1918, once boasted 800 stores in several chains along the East Coast. But that was before digital and throwaway cameras and an untimely expansion drove the company into bankruptcy.

In July, when David Ritz and his financial backers won a 25-hour New York auction with a $51 million bid to regain control of his family's chain, he promised to keep at least 164 stores open.

Thanks to financing from Philadelphia bankers and dealmakers, plus a deal with Verizon Corp., Ritz (now Ritz & Wolf Camera & Imaging) is recovering ahead of schedule. "We've got approximately 300" stores under the Ritz, Wolf and other brands, after reopening some this fall, says Stephen LaMastra, the chain's new chief executive. "We're looking at reopening some (additional) stores in the Philadelphia area in the first half of 2010," and more in the years to come.

LaMastra, former president of Atlanta-based Raving Brands (Moe's Southwest Grill), says Ritz financed growth with a $25 million line of credit from PNC Bank. "They came forward quickly after the acquisition," he told me. "It says a lot, in the current retail market, to have that kind of financing in place." Philadelphia-based PNC banker Dan Stella closed the deal, and Susanna Siskind services the loan.

He says the biggest change at the "new" Ritz and its sister stores isn't how many there are, but what they sell - which now includes Verizon phones and services, among other things. Besides selling cameras and printing film and digital images, Ritz wants to be the place you go - or email, through its newWebsite, www.RitzPix.com  - to get blow-ups, books and other shop-quality copies from your mobile-phone photos.

"We've been talking to Ritz for the last few years," but only closed a deal when it came out of bankruptcy, Armen Dermarderosian, director of strategic alliances for Verizon in Basking Ridge, NJ, told me. Verizon also has "agency erlationships" with Wal-Mart, Target and Best Buys, among other chains. Wal-Mart, in particular, took years to negotiate.  "We're very careful when we get into that second line of retailers. We need the right brand from every perspective. Ritz fits into that. 

"I grew up with Ritz. They got themselves into some challenges based on not changing as quickly as they needed to. We have a high confidence level that their leadership understands that many of the cameras in our phones rival what you get from a mid-level digital camera, with up to five megapixels in the Motorola Droid. Couple that with, people have their phones on them all the time."

Dermarderosian says he heard about Ritz's new leadership after reading my column last July. "We feel it's a very good potential relationship. We don't partner with everybody."
 

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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