Penn Camera just declared bankruptcy!

<p>Penn Camera, arguably the best remaining camera store in the Washington, DC - Baltimore area told its employees late this afternoon that it had filed for bankruptcy, and would be closing several of its locations almost immediately. I was told that the remaining locations (Rockville, Tysons', and maybe downtown) would remain open for "a while", but photofinishing at all locations would stop immediately. </p>

<p>They were handing out a printed "To Our Customers" message, which, in part said, <em>"Please be advised that we are not able to accept Penn Camera gift cards or previous deposits as payment forms. Customers who purchased gift cards or placed deposits may be able to seek reimbursement from their credit card provider through a disputed charge. For further information, you may wish to contact us at 301-210-7366 x100 or sales@penncamera.com"</em>.</p>

<p>This is a sad day, especially for the many highly experienced photographers that worked at Penn Camera. It is almost certainly just another example of the direction the industry is going, ie, fewer bricks and mortar stores, fewer prints being made, relatively inexperienced kids manning the counters at the chain camera stores. Ugh.</p>

<p>Tom M</p>

<p>Indeed sad, Tom, but not surprising given the overhead costs of salary, rent and inventory in the face of cut-throat pricing on-line.</p>

<p>On the other hand, I'm baffled by some of these business owner's failure to recognize shifting consumer habits and responding to it. It's still possible for bricks and mortar stores to do well, but not without a very strong and successful on-line presence; a fancy web site is simply not enough. </p>

<p>Not surprised by this, but I am surprised and (if I had one) would be mad as hell about the gift card / deposit policy. </p>

<p>Gift cards and deposits are income that they (Penn Camera) have already earned. The consumer just hasn't picked out a product for it yet. So I'm guessing that they have turned the business over to a liquidation house who paid Penn pennies on the dollar for the merchandise and will sell it at full price plus over the next 2 months to suckers thinking they are getting a deal. </p>

<p>Dave</p>

 

<p>Does anybody know if there was any connection to the New York "Penn Camera" that advertised in the photo magazines in the early 50s?</p>

<p>I tried to look on line, and at the DC Penn's website, but could find no history. They do say that they started in 1953, which overlaps with the dates of the NYC Penn Camera ads.</p>

<p>It's been maddening. I've been a Penn (of DC-area... not sure about the historical NYC Penn, JDM) customer for many, many years. But for the last two or three years, it's as if they've gone to a lot of trouble to not have in stock exactly the things that I take the time to drive down to one of their stores to purchase. I, and they both know that bodies and lenses aren't where the action is for a store like that any more. It's bags, Peli cases, c-stands, booms, seamless paper, printing supplies, oddball batteries, etc. And they've really come apart on that front lately.<br /><br />They are the local Think Tank dealer - a product line for which I seem to have an insatiable appetite. But they never have <em>the</em> puch, <em>the</em> waterproof rig, <em>the</em> strap, etc from Think Tank than I'm actually looking to buy. And it's one of those lines that actually sells - <em>everywhere!</em> - at MSRP. It's gravy, for them. Oh well.<br /><br />It's obviously a cash flow thing. But they haven't done some of the fundamental stuff that would keep local folks walking in the door. And they haven't gotten it together and created an online business that leverages their local footprint. <br /><br />As David mentions, I'd be pretty damn pissed about the loss of deposits and gift card balances. But that's what happens in a bankruptcy - assets become under the control of a judge, not the management's preferences and feelings of good will towards customers. That ship has now sailed (or sunk, which might be a better analogy).<br /><br />I'd like to think they could pull out of this, but the stores have felt so anemic for so long that it's hard to see a path forward. I guess I'll tamp down my feelings of pity, and switch right into Vulture Mode, and see what kind of swell deals there will be to be had as those retail stores die. It's a damn shame for the staff, but I can't imagine that any of them are surprised by this, either. The writing has been on the wall for - by my measure - three years, at least.</p>

<p>I'm shocked, I still have an application for a job as P/T used equipment salesman which I picked up last summer at one of their stores, but never turned it in. I wonder if they are going to have a Clearance Inventory sale, like Ritz did a couple of years ago. This is a real bummer, that leaves Ace Photo as the last remaining Photography store in the area.</p>

<p>Bummer. Penn had its shortcomings, but I always bought there when they were within 10% of the price I could get on line (with tax, the increment was always more than 10%). But on big ticket items, they were still not always competitive. I bet a lot of it was overhead; they had a lot of expensive (and convenient) locations downtown, whereas their competition either existed in cyberspace, or in warehouse space way out in Ashburn.</p>

<p>Having lived in the DC area (northern Virginia, actually) much of the past decade I have got to the point where I just assume that I'm going to be shopping on line after more than a few failed trips to stores. Penn was my last hope and although they did come through for some things I needed in the past couple of years, the last time I was in the Penn store near Tysons, about a month ago, they had almost nothing of interest, and that's not because I already have everything I need. There was just little evidence of stock on the shelves. Ace Cameras out in Ashburn is the only remaining shop with any kind of stock that I know about in all of Fairfax and Loudon - that's in an area of over 1 million population. Too bad, I seriously doubt anyone will invest in a new shop in these times.</p>

<p>Most reputable accountants would classify gift cards and deposits as balance sheet liabilities, and not as income already earned. The earning has yet to take place.<br>

Not that it makes much real-world difference, of course. Even employees have a better chance of seeing cash than gift card holders do in a bankruptcy.</p>

<p>I know all the staff at Penn in laurel, they are a great group and always very friendly. Unfortunately I believe the main office at Penn failed to change with the times. For example they bought an Epson printer, 64" wide that sat on a pallet in the front of the store for 3 months. Printing is not popular enough today to justify the expense, the space and the technician to run it.</p>

<p>I am NOT an attorney. I have not had any recent bankruptcy dealings. However, in past times I have been a creditor both secured and unsecured many times in bankruptcy proceedings.</p>

<p>If I remember right, and back then (bankruptcy laws have been changing according to who pays the politicians the most money), most deposits were, although held by the bankrupt, not the property of the bankrupt. Deposits were being held in contemplation of a future dealing. If the future dealings took place then the ownership of the money would pass at that time. Because that “transferring” transaction had not taken place the deposit would not be part of the bankruptcy assets. Unfortunately, it was my experience that most of the time the bankruptcy trustees declared deposits to be part of the bankruptcy assets knowing that most deposit owners could not afford to go through the legal process to recover their property.</p>

<p>On the other hand, most “early payments” like gift cards were treated as if title to the money had passed to the bankrupt. The entity that paid the money would then be treated either like a secured or unsecured creditor, depending upon whether that money was paid on behalf of a properly secured item or not. In addition, if you had properly filed a UCC1 showing the money as a secured asset, a court might be able to put you in the secured asset pool, rather than the unsecured asset pool. To my knowledge, nobody has filed a UCC1 over a gift card.</p>

<blockquote>

<p><em>" relatively inexperienced kids manning the counters at the chain camera stores. "</em></p>

</blockquote>

<p>I don't really see that as a liability, Tom. </p>

<p>Given the number of choices available to consumers in every product category, salespeople, no matter how experienced or knowledgeable, can only contribute a point of view based on personal opinion, and modern consumers know that. </p>

<p>The savvy approach these days is to do ones own research, look for the best available price, make judgements about value, convenience, cost/benefit on where to buy, then make the purchase. Salespeople rarely have any influence on a purchase decision because consumers are largely well informed and have pretty much made up their minds before walking in. Scrolling through 50 reviews on Amazon.com will arguably be more useful to the consumer than talking to a salesman, even if the reviews are contradictory. </p>

<p>Bricks and mortar still has value if businesses know how to run them. In fact places such as Tigerdirect began as Internet-only but migrated into the retail sector with many stores, and doing well because they know how to appeal to the tech-savvy consumer, ensure positive purchase experiences, and offers no hassle return policies. </p>

<p>In short, I think businesses are successful because of the people running them regardless of their physical presence or lack of, and they are successful because consumers embrace them. </p>

<p>Hi Michael - I agree with all you said -- to a point. I guess the reason that I made the statement about inexperienced staff is because even in this day and age, there are still many naive consumers who don't fit into the category you described. </p>

<p>I have personally witnessed the interactions of many of these folks in the local camera stores with inexperienced help. They go in looking for advice and get sold things they don't need, are given absurd technical advice, etc. I feel terribly sorry for them, and on more than one occasion, approached them with a "I happened to hear what you were discussing with the clerk..." type of comment.</p>

<p>Gotta run.</p>

<p>More later,</p>

<p>Tom M</p>

<p>Brick and mortar book stores and Amazon.com. Those who survive this will have to have a large footprint in the online market.</p>

<p>There was a Penn Camera in downtown Pittsburgh at one time in the 1970's, not sure whether they're even around anymore. I bought my Yashica Mat 124G there in 1974 for 99.00.</p>

<p>"<em>Bricks and mortar still has value if businesses know how to run them."</em><br>

If you visit B&H or Adorama in NYC they are Brick & Mortar shops always have been since I can remember. There is an actual store with tellers and salesmen and there is equipment lying around in showcases and on racks. They are not some mysterious warehouse located in the middle of nowehere, although they do have warehouses located elsewhere around the country. So how were they able to make it, while other smaller shops folded ?<br>

At one point if I remember correctly these two stores were considered mom & pop shops just like the hundreds of other photography stores in that area. I haven't been back in the area lately, but last time I looked, allot of those convenient photography stores had either closed shop, or were offering different types of goods. </p>

 

<p>This stinks. I use Penn in Tyson's regularly for gear rentals. I know the rental counter guy and enjoy BSing with him when I pick up gear. I'd be bummed to lose the ability to rent locally. I know borrowlenses.com, etc. exist, but sometimes I don't plan days/weeks in advance of needing a lens. It was nice to know I could drive a mile from the office and pick one up.</p>

<p>If they do end up closing their brick-and-mortar stores, they could continue their sales store online, and open a small local storefront (in a less pricey part of town) that only did rentals. Oh well...I can dream, can't I?</p>

 

 

<p>Now that I think about it (on the gift cards) - I remember vaguely someone saying that when Borders was going into bankruptcy to spend your gift cards and spend them fast. Like before they actually announced the filing. I believe it was for the reasons stated - that you are basically treated like an unsecured creditor at that point, even though they do have your cash.</p>

<p>And sure enough - looking through my trash bin, I found an email from borders saying that they would no longer accept gift cards.</p>

<p>As for stores closing and going away - the Penn saga sounds somewhat like the Ritz Camera one - although Ritz has somehow managed to survive - for now.</p>

<p>Ritz used to have a store on every corner (or so it seemed) and in every mall. Some of that was due to consolidation - they bought Pro-ex and a couple of others and just never, ever consolidated. At one point there were no fewer than 4 Ritz locations in a 10 square block area of downtown Minneapolis. 3 of them were full service locations - meaning they had studios, camera's, gear, etc... 1 was an express photo place only. </p>

<p>Story was the same at all them though - they had a limited supply of "good" stuff - usually were lacking the newest prosumer bodies and rarely had "pro" lenses. They all had a large selection of SunPak / Quantary and a large supply of consumer point and shoots which you could always find cheaper elsewhere. Add to the fact that 90% of their "staff" had no clue about photography or sales and it was a receipe for disaster. I still remember the one clerk breaking down in tears because he could not get a magazine I wanted to scan the bar code.</p>

<p>Dave</p>

 

<p>If you have Penn Camera gift cards, they're still being accepted for online purchases as of about an hour ago. Recommend you use them asap. Suspect they won't be accepted much longer. Good luck.</p>

<p>I just heard on the radio that there is going to be a clearance sale, unfortunately I'm broke...</p>

<p>gary r - I don't know where you live, but Ace Photo in Ashburn (just north of Dulles airport) has rentals, and quite frankly is a much better store than Penn has been for some time.</p>

<p>The worst news is the loss of some really great employees. Lets hope that they find suitable employment soon.</p>

<blockquote>

<p><em>"If you visit B&H or Adorama in NYC they are Brick & Mortar shops always have been since I can remember. ..... So how were they able to make it, while other smaller shops folded ?"</em></p>

</blockquote>

<p>Harry, I think it's because these stores have built brand equity over the years and smart enough to keep up with the times while capitalizing on it. It's all about reinventing oneself or face an unpleasant alternative. </p>

<p>It would have been just as easy to run B&H or Adorama into the ground had it not been for the smarts of the folks running it. </p>

 

<blockquote>

<p><em>"I have personally witnessed the interactions of many of these folks in the local camera stores with inexperienced help. They go in looking for advice and get sold things they don't need, are given absurd technical advice, etc."</em></p>

</blockquote>

<p>I look at it this way, Tom. </p>

<p>What's the worst that can happen in a big box store staffed by inexperienced salespeople? Cameras are so well made these days that it's almost impossible to make a "bad" choice, and even "better" choices are subject to debate. A customer might be persuaded to purchase at some percentage above the lowest on-line price padded by extended warranties and useless accessories, but amortized over the life of the camera and pleasure derived from it, the difference will be negligible from that sold by an experienced salesperson in a different store. </p>

<p>I guess it's the same whether the product is a car, a lawnmower, or a camera - an uninformed client enters a store at his own peril, but these days the penalty is usually contained to within a few percentage of the lowest possible price. </p>

<p>Penn has been on the decline for sometime now, about 10 years I would say. I have been going there since the late 80's so I have been able to see them slide off into oblivion. In addition to hearing some bizarre advice by some employee who had some mantra they really have failed to keep up with the times. They kinda pulled back in a few years back, I felt, when they had some ink jet printers, paper types, and inks all on hand. That normally, I would only be able to look at a picture at online. But, that only lasted for a short while.</p>

<p>I have seen this before when I worked at a bicycle shop. What happened is that the founder/owner decided to retire and sold his stores off. One by one, they all went out of business except for the very original one. You need that combination of the older, experienced business man to run the financials, and the younger, "in-tune", floor managers to keep on eye on trends and to keep things attractive for customers.</p>

<p>Overall, it is sad. I always hoped they'd pull it back together.</p>