Calumet Photo Files Chapter 7 Bankruptcy

[Rienzphotoz]

Giving no notice to the rank and file employees is becoming more common. Less likely to be things like theft on the way out.

Nah, there's still plenty of theft, its just theft of wages owed. According to the interview, Calumet was bouncing paychecks and then locked everyone out of the stores when they closed. There's still customer cameras that went in for sensor cleanings locked up in some store fronts.

That's just so wrong ... it reminds me of a big private airline in India that went bankrupt in 2012, but has not returned ticket money to many of the passengers for the flights that were cancelled, ... in order to retain their customers, several travel agents had resorted to refunding customers from their own pockets and writing off the amount as bad debt ... since August 2012, the bloody airline did not even pay salaries to its employees, and still owes over INR. 350 crore (approx US$ 58 million) to its employees ... but the owner of the company hosts high profile & lavish (read that as expensive) events. What is more sickening is that this airline was promoted by the owner, in 2005, as an 18th birthday gift for his son ... but has scant regard to the children of the employees who served his company for years.
http://www.hindustantimes.com/sports-news/cricketnews/kingfisher-airlines-can-t-pay-staff-but-mallya-splurges-rs-29cr-on-ipl/article1-1183355.aspx

 

[e_honda]

I once ordered a 70-200 F4 L IS lens from these guys. Shortly after ordering, I found a practically brand new one locally off Craigslist for way cheaper. So I asked for and was granted a return by Calumet. I shipped my completely unopened packaged right back to them (I didn't even open the Calumet packaging, let alone the Canon packaging). Later on I checked my credit card online statement to see if I got refunded.

They did refund me.......and also charged me a $60 restocking fee for a package that I didn't even open.

If that's how they ran their business, I say Good Riddance!

 

[expatinasia]

My condolences go out to the Calumet staff.

It is funny times we live in when it comes to retail.

All my books are now electronic (and purchased via amazon.co.uk), and I buy them via my laptop which I bought online (also in the UK), I buy my CF cards (which are made in China) online in the US and get them sent all the way back to Asia, and I still save a lot on the prices here. That last bit still does my head in today. I mean I am buying something that was made a few hundred kilometres away, and yet to buy it cheaply it has to be shipped to the US and then bought online through a US-based store and sent back again! How nuts is that?!!

I go into brick and mortar shops like Sony Stores and see what they have, play with them, go home and compare prices all over the internet and all over the world.

The only brick and mortars that now get my business are those that offer things like 12 or 24-month interest free payment plans. Most online retailers have not yet worked out how to do that, but when you are buying a 2nd 1D X, or a 300 or 400 f/2.8 is ii etc, incentives like that can be very attractive.

Strange times, indeed.

 

[JonAustin]

Sadly, just another sign of the times.

It's extremely difficult to simultaneously serve locally and compete globally. Pricing pressure is stiff, and knowledgeable retail staff has been displaced by online reviews and feedback from previous purchasers.

We've transitioned from handling the gear in a local store and then buying it there, to handling it in the store and then buying it online, to buying it online without first handling it, and then just sending it back if it doesn't meet expectations upon receipt. No wonder the brick and mortar stores are drying up.

I think the end is in the foreseeable future for nearly all specialty electronics stores. What we will have left is the big box stores for entry- and mid-level gear, and the online merchants for the high-end, specialty gear. The only local specialty shops will be those that can continue to differentiate in some unique or special way that appeals to its surrounding customer base.

 

[Vivid Color]

I always found the employees to be very helpful. For me, the biggest loss is going to be a local place that can produce quality large-size prints.

OK, maybe the loss of Calumet's printing services isn't as big as I thought it might be. Just a few minutes ago, I tried to frame a 16x20 print I had picked up at Calumet a couple of weeks ago. I had checked the print out, but didn't notice anything amiss. I've had a number of my friends look at this print and none of them noticed anything either. However, when I went to put the print into a frame, I discovered that the print is not 16x20, but a least 1/2 inch smaller in both dimensions.

 

[zim]

How many apple-esque stores have Canon opened so far, was there not an announcement some time ago about them doing that?
Seems to me that’s the way to go I don’t think they even need to have tills just come in try and learn. Very soon the only way to try before you buy is going to be CPD for Pros and trade shows for everyone else, not a good business model.

 

[Hannes]

How many apple-esque stores have Canon opened so far, was there not an announcement some time ago about them doing that?

I thought they were opening one in London but I have yet to see a sign of it appearing.

 

[LookingThroughMyLens81]

How many apple-esque stores have Canon opened so far, was there not an announcement some time ago about them doing that?
Seems to me that’s the way to go I don’t think they even need to have tills just come in try and learn. Very soon the only way to try before you buy is going to be CPD for Pros and trade shows for everyone else, not a good business model.

Canon has opened a service center for professional support and sales of their digital imaging and video products in LA but nothing beyond that as their Cinema EOS brand is in it's infancy.

 

[Bennymiata]

Brick and Mortar retailers are discovering that today's retail business has changed markedly and I guess it's been very difficult for many of them to realise this, and still keep going the way they always have rather than trying to re-invent themselves to suit today's market conditions.
It's not just camera stores either.
Here in Sydney, there are many empty retail stores for rent and I feel for the owners of these now empty stores as many had their whole lives and their money tied up in these.
The camera market has changed a lot.
The internet has really made it tough for B&M retailers as it is now so easy to compare prices worldwide, and when you look at some of the pricing offered by on-line sellers with little or no overheads, compared to the B&M shops with huge rents to pay as well as staff, the B&M retailers aren't all that much dearer in many cases, but people feel that B&M's are ripping them off, so many are now turning to the net first without even going into the stores.
Many camera stores relied on the sales of cheaper P&S cameras, as many people who buy them do little research and how much can you save on a $200 camera?
The sales of these P&S cameras has dwindled down to a trickle now, as everyone just uses their phones, and this has hurt them a lot.
People aren't getting many prints done anymore either, choosing to just leave the pics on their phones or computers, so there is another good profit earner down the drain.
I think we will see many more camera retailers close up, and I wouldn't be surprised to see over 50
% of them close down in the next few years, unless they can come up with something to get people to come in a buy from them.
Things like extended credit, maybe even hiring out gear and teaching people about photography, and giving really good service and advice.

I'm sorry for the employees, as it looks like they may never get their back pay etc., but I do think the writing is on the wall for many retailers that still believe they can trade the same way now as they did 30 years ago.

 

[sanj]

In the big picture, what does this actually mean? Lesser cameras being sold? Camera business moving more towards online stores? What?

 

[Rienzphotoz]

Sad news. My office is also in the same building as theirs, so it will be extra sad to lose them. No more playing with lenses at lunch time...

That is sad indeed ... I moved to a new office last month and it is just 5 minutes walk to the local Canon/Nikon autorized dealer, so lunch time activity just got better for me

 

[GuyF]

TBH calumet uk stores aren't doing much better , since they changed from KJP - anyone remember that? - since Calumet it's been downhill all the way. Decent staff left and now mostly uninterested ex students and older staff looking bored that don't know half of what I read up on with little real world experience to add into discussions. Plus many basic items have to be ordered in especially.. recently I needed a couple more standard stands and white backgrounds.. not in stock!!!
and enquired about the sony A7r , was told better go to john lewis !!
Crazy for a pro shop. Seems like they stock bags and tripods mainly now.
Times are a changing I really don't know where to buy equipment from these days apart from the Flash centre for Elinchrom which have awesome customer service and knowledge.
As some one mentioned this could really affect Bowens lighting as Calumet as a major distributer in UK / Europe.

RIP calumet .. globally in 2 years

I'd hired a 500mm f4 mk2 from them prior to deciding if I should buy one. The salesman showed me on their computer system that their trade price for the lens was more then the sale price! They were making a big loss on each one - he said they make their money on accessories such as memory cards, bags, tripods, etc. Yikes, you've got to be selling lots of tripods to make up the loss on a big white.

I'm surprised they're still operating here in the UK.

 

[Harry Muff]

We've heard the stories of people's cameras being locked inside the closed stores, but how many people still have a hired 400 2.8II that they can't take back? 8)

 

[Chuck Alaimo]

I once ordered a 70-200 F4 L IS lens from these guys. Shortly after ordering, I found a practically brand new one locally off Craigslist for way cheaper. So I asked for and was granted a return by Calumet. I shipped my completely unopened packaged right back to them (I didn't even open the Calumet packaging, let alone the Canon packaging). Later on I checked my credit card online statement to see if I got refunded.

They did refund me.......and also charged me a $60 restocking fee for a package that I didn't even open.

If that's how they ran their business, I say Good Riddance!

So wait, you found a used (yeah, unopened and brand new) lens for cheaper. So you sent back your order. Doesn't matter if you opened it or not. You bought it, you committed too it!!!! Restocking fee's are there for a reason --- why --- because people do that!!! Thrifty folks who say, wow, I could rent that lens for $XX per day - or - I could buy it and send it back within a month for less.

Either way ---- we can't both complain that there are no longer brick and mortar stores, then screw those brick and mortar stores when we see something cheaper elsewhere. Talk about reframing the arguement ---maybe it wasn't due to bad management --- maybe it was too many customers like you who screwed them...sorry if that's harsh...but...to put it on a personal level...


Lets say you shoot portraits. You book the client, they commit to a minimum price, you do the shoot, you make the edits, they pick their prints, you order their prints... you deliver them even. And 2 days later they call you and ask for a refund because they found someone down the street that was able to do it for cheaper? How long are you going to stay in business with customers like that????

 

[Rienzphotoz]

We've heard the stories of people's cameras being locked inside the closed stores, but how many people still have a hired 400 2.8II that they can't take back? 8)

So you have a 400 f/2.8 L II lens that the Calumet store is not ready to take back? that's cool 8)

 

[Rienzphotoz]

I once ordered a 70-200 F4 L IS lens from these guys. Shortly after ordering, I found a practically brand new one locally off Craigslist for way cheaper. So I asked for and was granted a return by Calumet. I shipped my completely unopened packaged right back to them (I didn't even open the Calumet packaging, let alone the Canon packaging). Later on I checked my credit card online statement to see if I got refunded.

They did refund me.......and also charged me a $60 restocking fee for a package that I didn't even open.

If that's how they ran their business, I say Good Riddance!

So wait, you found a used (yeah, unopened and brand new) lens for cheaper. So you sent back your order. Doesn't matter if you opened it or not. You bought it, you committed too it!!!! Restocking fee's are there for a reason --- why --- because people do that!!! Thrifty folks who say, wow, I could rent that lens for $XX per day - or - I could buy it and send it back within a month for less.

Either way ---- we can't both complain that there are no longer brick and mortar stores, then screw those brick and mortar stores when we see something cheaper elsewhere. Talk about reframing the arguement ---maybe it wasn't due to bad management --- maybe it was too many customers like you who screwed them...sorry if that's harsh...but...to put it on a personal level...


Lets say you shoot portraits. You book the client, they commit to a minimum price, you do the shoot, you make the edits, they pick their prints, you order their prints... you deliver them even. And 2 days later they call you and ask for a refund because they found someone down the street that was able to do it for cheaper? How long are you going to stay in business with customers like that????

Harsh, but true.

 

[Chuck Alaimo]

Sadly, just another sign of the times.

It's extremely difficult to simultaneously serve locally and compete globally. Pricing pressure is stiff, and knowledgeable retail staff has been displaced by online reviews and feedback from previous purchasers.

We've transitioned from handling the gear in a local store and then buying it there, to handling it in the store and then buying it online, to buying it online without first handling it, and then just sending it back if it doesn't meet expectations upon receipt. No wonder the brick and mortar stores are drying up.

I think the end is in the foreseeable future for nearly all specialty electronics stores. What we will have left is the big box stores for entry- and mid-level gear, and the online merchants for the high-end, specialty gear. The only local specialty shops will be those that can continue to differentiate in some unique or special way that appeals to its surrounding customer base.

+1000 --- of course, the online merchants (b&h and adorama) have brick and mortar operations. But still, I can count lots of times where I've needed something, call the local shops to see if they have it, and they don't. Of course, they can order it but then you add it all up - it takes longer for the local shop to get a product in that it does for B&h to ship to me (I live in Buffalo ny so even if I do the standard UPS it's here in 3-4 days) and it's cheaper and I don't have to go anywhere to pick it up! I'll buy from the local shops when it makes sense. But more times than not they don't have what I need in stock because Buffalo is a smaller market and can't support a larger store (and we have it all split up weird too - 1 store that specializes in nikon and one that does canon).

 

[Chuck Alaimo]

Whoa! I should have looked at the court filing first. They are listing less than $50,000 in assets. I'm guessing there are individuals on this forum (not me) that have more than that in Canon equipment.

I don't know how this works in the camera retail business. Is it customary for a supplier to retain ownership of the stock until it is sold?

Maybe it will be the Canon refurbished store that gets all this stock back?

Read the comments on the article - here it is -

"The inventory was being used as collateral. We had auditors in about every other month to count things to make sure we had what we said we had." (this commentor claims to be an employee and his statements sound pretty consistent and legit)

As to this:

It is sad when companies that have been around for a long time suddenly disappear ... but its a shame that the owners of the company gave no warning to their employees ... hope the employees are rewarded well and find better jobs.

From what I've read about chapter 7...it's the nasty of the nasty. Management would not be allowed to tell employees prior to the closing because of how severe the situation is. It's don't to prevent things like, the employees walking out with half of what's in the store! Here's 2 lawyer comments:

"I am a US lawyer, but I don't practice bankruptcy law. I'm not an expert. Having said that: it's possible that Calumet wasn't allowed to warn employees, or at least that it might have caused problems if they had. As I understand it, the idea is to lock the doors of your business and hand the key over to the court, and then it's up to the court to oversee the feeding frenzy of creditors.

If a business warns its employees in advance, what happens if those employees steal a bunch of equipment on their way out the door? That equipment would have been sold to repay creditors, and now it can't be. Those creditors have every reason to look at management and ask, "Did you look the other way while these thefts occurred because you didn't want to see us repaid? Did you arrange to split the proceeds with your ex-employees?" It would undermine the point of bankruptcy protection.

But again, I don't practice bankruptcy law and I would welcome correction from someone who does this stuff every day."

And the reply to that -

"I am also a lawyer who doesn't practice bankruptcy law directly, although I have a lot of experience with it incidentally. Your comment is on the money, although another concern is creditors either trying to get special treatment if they know bankruptcy is imminent (which the bankruptcy court then has to try to undo) or immediately ceasing to provide services (such as utilities, computing services, etc) which would cause premature disruption of the business and, again, ultimately harm creditors.

Yes, it sucks, but this is how it has to be. If this were Chapter 11 (Restructuring) it would be different, but Chapter 7 (Liquidation) is an ugly, ugly process and there are no winners.I feel bad for the employees and those who have equipment in for service, as well as those who've already paid for merchandise that will never be delivered. Hopefully they at least manage to get the service equipment back to its rightful owners and pay their employees, although that latter seems unlikely."

Last copy past moment - that employee I qouted, he actually posted the email he recieved notifying him of what was happening:

Personally I'm not entirely sure I can believe anything that comes out of corporate. We had been struggling the past year, but around the start of the year we had been told things were turning around. That we had refinanced. That things would get better. They didn't. They actually started getting worse. As of a few days ago, we heard they were trying to refinance things again, so they could finally run the company the way they wanted to. We got this email last night:

• Over the past couple of months, management has been working tirelessly in an

effort to get the Company’s lender to support our plan to restructure the business.

We believed that we had a very viable plan that would allow Calumet to be a

healthy, profitable company. As of yesterday, the lender had given us indications

that they would support our efforts. However, to our surprise and despite all of

our hard work, the lender today suddenly decided that they would not support us;

• As a result, we have been forced to file Chapter 7 bankruptcy. Unfortunately, this

means that we must cease operations, shut our doors and terminate all employees,

effective immediately. This means you are not to show up for work tomorrow.

We are so sorry that it has come this. This is not what we had anticipated.

• We will make arrangements soon for everyone to come and get their personal

belongings.

• There will be a lot of questions that people will have that we do not have answers

to, but we will make every effort to get answers. If you have a question, please

write it down and send it to me and we will do our best to get back to you as soon

as we can. We ask that you be patient since this is all new to us.

• We will be requesting that the lender agree to pay payroll through today, but there

is no guarantee they will agree to do so. As soon as we receive a response, we

will let you know.

• Again, we are so sorry that this has happened and personally thank you for all of

your hard work and dedication.

So...sounds to me like there were a lot of factors leading to this. An older company struggling to transition to the new emerging economy - a new economy filled with ways for people to get the same thing for less. Maybe that's why they bought all those new storefronts? Either way - with an already bad financial forecast they borrowed a bunch of $$, bought new stores in key locations...sounded great on paper but in every article and forum I read on this I hear stories of the same old story - I went in and they didn't have what I needed in stock, could have ordered it there but it would have been cheaper, easier, and faster online. the other big thing I've read is that they really pushed those classes.

It's a nasty nasty thing.

 

[Steve]

From what I read they were gotten at by specifics of the U.S. tax system that imposes tax on local stores which instantly gives online shops from other states a 10% price advantage?

In the US, most states have a sales tax that gets charged and it is different for each state. Online stores, so far, do not need to charge each state's sales tax unless they ship to a buyer in the same state they are based in. So if you live in California and you order from, say Newegg which is based in California, they charge California state sales tax but everyone else in the US can order from them tax free. Its a confusing system that heavily favors online stores. A European style VAT would be better but people here would burn the country down rather than implement it.

For Calumet though, this is just an excuse. Lots of retail stores operate at a profit even with competition from online stores. Here in Portland, OR we have Pro Photo Supply which, as far as I can tell, does tons of business. Every time I go there it is super crowded and there's always a wait to talk to a salesperson. I think their secret is knowledgeable, skilled staff and catering to professionals' needs, crazy as that sounds! That said, it seems to me that it would be in the best interests of Canon, Nikon, Sony, etc to offer some sort of incentive to B&M stores to make up for the huge difference in overhead. A physical presence can make a big difference when someone is deciding to purchase or not.

 

[Roger Jones]

Calumet for many years was manufacturing company, cameras, dark room equipment, film processors. They innovated and they made sturdy stuff. I had a calumet 8x10 camera that was built like a tank. The transition to digital and the shift of manufacturing to China made their gear obsolete or no longer cost competitive. I stopped shopping there when they never seemed to have what I wanted in stock. Why pay a premium when you have to wait for delivery anyway? The landscape is changing and the companies that don't evolve with it will soon be extinct.