Changing demand can negatively affect a once thriving business. This can lead to unintended debts and the need to file for Chapter 11 bankruptcy in order to restructure.
This is what happened to Ritz Camera & Image, which is a photography retail chain with stores throughout the country, including Florida. The issue is that more people are now relying on their cellphones to take pictures and not as many are actually going out and purchasing standalone cameras and accessories.
According to the Chapter 11 filing, the company has between $50 million in both assets and liabilities. The plan is to restructure the company and close down 128 of the 265 stores. Right now there are about 2,000 people employed by Ritz Camera, and after the restructuring, there will only be roughly 1,000 employees left.
The chief restricting officer for the company said while sales were up 20 percent for the month of May, there just hasn't been enough capital since the company emerged from its previous bankruptcy in 2009.
Looking to the future, the plan is for Ritz Camera to go to auction in September.
This recent filing is a perfect example of the fact that businesses are vulnerable to changing and emerging trends. What may be extremely popular one day may quickly fade with the latest technology or gadget.
Fortunately, there are often debt relief options and plans available for those businesses and corporations that are struggling. An attorney with experience helping businesses file for bankruptcy can be a great asset when it comes to learning about those options and filling out necessary paperwork.
Source: The Washington Post, "Ritz Camera files for bankruptcy protection, again," Danielle Douglas, June 22, 2012