Ritz Camera Centers, which operates 130 Boater’s World Marine Centers, has filed for Chapter 11 bankruptcy protection with U.S. bankruptcy court in Delaware.
The more than 90-year-old company added the Boater’s World chain in the late 1980s, and said it “proved to be a positive contributor to the company’s profitability for a number of years and generated a positive cash flow through 2007.”
“In the spring of 2008, however, the price of oil skyrocketed, leading to a sharp rise in the price of gas, and that, in turn with other macroeconomic factors, led to a sharp drop in the sales and profitability of the Boater’s World business,” chief restructuring officer and COO Marc Weinsweig said in court filings.
Weinsweig also cited a loss of revenues and profit margins from the diminution of the photo-finishing business as a cause for the Beltsville, Md.-based company’s financial problems.
“Given the company’s internal challenges, including unprofitable store leases and Boater’s World losses coupled with the overall economic recession, the company had no choice but to seek relief under Chapter 11 … to preserve the possibility of being able to restructure its business and financial affairs and continue as a going concern,” he said in court documents.
Ritz said it will seek court permission to obtain $85 million of financing to keep operating while it restructures. Court papers show the company’s 30 largest unsecured creditors without collateral backing their claims are owed about $65.6 million.
Company officials were not immediately available for comment this morning.
— Beth Rosenberg