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Don’s Photo, a retail camera institution in Winnipeg since 1979, is seeking creditor protection under the Bankruptcy and Insolvency Act to figure out a way fight off its digital disruption moment.
Don’s Photo Shops Ltd. which owns the five-store chain, including three in Winnipeg and two in Saskatchewan, filed a notice of intention to make a proposal and has retained PricewaterhouseCoopers (PWC) as its trustee.
Michael Godfrey, chief operating officer and son of founders and owners Don and Judy Godfrey, said that the notice will not affect ongoing operations.
It will however, put a temporary hold on the payment of more than $3.2 million in outstanding debt to suppliers.
In a company statement released late last week to creditors, it said, "The past 18-20 months have been extremely difficult for us. In spite of our best efforts toward cost reduction and expense management, the changing retail environment has prevented us from generating sufficient profits to meet our obligations."
Godfrey said the plan at this stage is to keep all the stores open.
"We are up for the fight," Godfrey said dispelling any suggestion that the business will not continue. "We are going to go all out."
He said the hope is that changing some overhead and administrative costs will mean they will not have to close any stores.
The fact that Don’s was forced to take this action may not be surprising.
The preponderance of digital photography and the sharing of photos through social media has meant fewer customers for the traditional camera and photographic supply retailers.
Global camera sales of higher end single-lens reflex (SLR) cameras have been declining by about 20 per cent annually and continue to fall. The digital point and shoot camera market is even more precarious.
"That’s directly related to the fact that everyone has a smart phone in their pocket," Godfrey said. "The lower priced-cameras have gone away."
While recognizing that the market is changing, Godfrey said there is still room for a company like Don’s, that caters to the sophisticated amateur and everyone above and below that line on the retail landscape
"Our passion is photography in general," he said. "We have dealt with everyone from press photographers to Olympic photographers to the budding students to the moms taking pictures of their newborns."
Last year, Blacks Photography closed all 59 of its locations across the country including a couple in Winnipeg. Blacks had been acquired by Telus in 2009.
Although Blacks was more focused on photo-finishing than on equipment, the number of places to buy quality cameras in the city is shrinking.
In addition to the Blacks closures, Henry’s is down to one store in Winnipeg from three and Future Shop has closed two stores after being absorbed into the Best Buy family.
"Those are all places people could buy cameras," said Godfrey
The company statement said that the creditor protection process is intended to give the company time to "emerge leaner, stronger and better prepared for the future."
Ongoing business will be able to be transacted and any new goods and services sold to Don’s will be "paid in full on mutually agreeable terms."
But existing creditors are going to have wait for a formal proposal. Amounts owing as of January 20 are frozen. PWC says it has 30 days to file that proposal unless it receives an extension from the court.
Included among Don’s current list of creditors are many of the large camera brands like Canon, Nikon and Sony who have outstanding invoices with Don’s in amounts well into the six digits.
The company also owes the Bank of Montreal close to $400,000.