4/8/2013 6:03 PM ET|
Sears, Wal-Mart portrait studios shut down
Photography company CPI Corp. was crushed by nearly $100 million in debt, leaving employees out of work and customers wondering whether they'll get their orders.
Frozen images of forced gaiety no longer adorn store walls, and wails of childhood anguish have stopped reverberating across the sales floor, now that The Associated Press has reported that CPI Corp. (CPI), which once handled the stores' nearly 2,000 portrait studios, is no more.
All that remain are empty corners of sprawling retail space, stunned customers, newly unemployed workers and a statement on CPI's website passing the consequences of the company's collapse on to retailers' customer service departments. There's still a chance that some customers will get their multi-sized keepsakes from the day their parents sprung a photo session on them before they were able to get a haircut or get their favorite clothes out of the laundry room, but there's almost no chance of CPI coming back anytime soon.
With Kodak (EKDKQ) bankrupt, digital camera sales slumping and the average smartphone taking better pictures than the point-and-shoot images of less than a decade ago, CPI and in-store portrait studios were being squeezed. The Securities and Exchange Commission notes that the company had put off paying lenders four times before being told that it had until Saturday to meet its loan obligations. Back in mid-March, CPI said that it owed $98.5 million, including unpaid principal of $76.1 million.
The company was exploring a possible sell-off but warned it would have to liquidate if it didn't get an extension on its loan payments. Its chief marketing officer and president, Keith Laakko. didn't even stick around long enough to see how it turned out, resigning last month after a seven-year tenure with the company.
Sears sent an email to customers last week saying it would try to fulfill as many orders as it could from its licensed but now defunct Sears Portrait Studios. Wal-Mart, meanwhile, went so far as to burn customers' images onto CDs and hand them out in the parking lot to fulfill orders.
That last strategy is perhaps the best summary of both CPI and the portrait studios' predicament: Digital photography has streamlined the process so much that even the CDs Wal-Mart handed out seem archaic at a time when Apple (AAPL), Google (GOOG) and other companies are yanking disc drives out of their laptops. Even social media photo services on Instagram, Facebook (FB), Google+ and elsewhere are making photo sharing and printing services like Shutterfly (SFLY) and Photobucket, Snapfish seem like middle men.
In modern context, department and discount store photo studios weren't the buggy whip to social media photo galleries' Tesla (TSLA): They were the walking stick. To take the family to a portrait studio in 2013 was akin to taking it to a phone booth to make the day's calls or sitting it down in front of the Betamax for movie night.
It would have been nice for CPI to figure this out before it had to make a sad Web-only announcement and let go of hundreds of employees, but it's tough to have that kind of foresight when you've been staring at the same backgrounds and forced smiles for the better part of 60 years. Now, in the words of Toad The Wet Sprocket, a band that was last popular right around the time store portrait studios were last relevant, "We don't even have pictures, just memories to hold."
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Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
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