Ritz Camera wins $4 million interim financing, plans 128 store closings

By Jim Witters

Wilmington, Del., June 25 - Ritz Camera & Image, LLC received approval for $4 million of interim debtor-in-possession financing that the company believes will carry it through the closing of 128 retails stores and the sale of the remainder as a going concern business.

Forty-five of the stores will be shuttered after their inventory is relocated to other properties, and 83 stores will operate clearance sales before vacating the site, Ritz attorney Irving E. Walker said during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

The closings will leave Ritz with 137 stores that the company hopes to sell as going concern at a Sept. 6 auction, Walker said.

Chief restructuring officer Marc Weinsweig said that Ritz filed bankruptcy to reject its unprofitable leases, improve cash flow and restructure its debts.

Previous bankruptcy

Walker said that Ritz once was a billion-dollar business with more than 1,000 stores in operation. The company also owned Boaters World, a chain of marine supply outlets.

But the change from film to digital photography robbed Ritz of its largest source of revenue, and the 2008 economic crash resulted in the company's credit drying up, sending the company into bankruptcy in 2009, Walker said.

Boaters World was sold and liquidated. And Ritz Camera was sold to David Ritz and other family members.

But the business model was flawed, Walker said.

Weinsweig said paring the retail outlets from 265 to 137 will create an optimal sized company.

DIP terms

The DIP agreement approved on Monday is a $20 million facility that includes a $4.92 million term loan and a $15.89 million senior secured revolver.

Crystal Financial LLC is the administrative agent and collateral agent.

The facility will mature on the earliest of Nov. 9, the date of confirmation of a plan of reorganization or closing of a sale of substantially all company assets.

Interest is Libor plus 10%.

A $750,000 closing fee is payable in two installments - $300,000 on approval of interim financing and $450,000 on the termination date.

A hearing on final DIP approval is scheduled for 3 p.m. ET on July 17.

Ritz Camera & Image, a Beltsville, Md.-based specialty camera and image chain, filed for bankruptcy on June 22. Its Chapter 11 case number is 12-11868.

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