August 30, 2011, 4:33 PM

Ritz Interactive files for bankruptcy

The company lists assets of $809,000 against liabilities of $7.2 million.

Mark Brohan

Research Director

Lead Photo

The web retailing industry is adding another company to the list of merchants filing for bankruptcy in 2011: Ritz Interactive Inc.

Until as recently as 2007, Ritz Interactive, No. 171 in the Internet Retailer Top 500 Guide, was putting up annual web sales of as much as $111 million and operated more than a dozen niche e-commerce sites.

But a sour economy, problems with inventory and other factors have caused Ritz Interactive to file for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California. Ritz Interactive, which owns and operates RitzCamera.com and other sites, isn’t talking publically about its bankruptcy filing. It’s also unclear how Ritz Interactive intends to restructure.

In its bankruptcy petition filed on Aug. 23, Ritz Interactive listed assets of $809,192 and liabilities of about $7.2 million. Ritz Interactive also owes vendors such as American Express and Notions Marketing Corp. about $434,000 and $104,000, respectively, according to the claims of creditors in the bankruptcy filing. Ritz Interactive also owes Federal Express about $103,000, Google about $45,000 and affiliate network Commission Junction about $40,000, according to the bankruptcy filing.

In a series of new filings Ritz Interactive CEO Fred Lerner has asked the bankruptcy court to approve a series of emergency debtor-in-possession motions in order to deal with banking and payroll issues. A debtor in possession is a company that continues to operate while going through a Chapter 11 bankruptcy proceeding.

In court papers Ritz Interactive says its revenue began to drop in 2009 because of the severe recession. Over time Ritz Interactive also faced a reduced inventory supply for cameras from manufacturers such as Canon USA. The recession also caused Ritz Interactive to close down BoatersWorld.com, which at one point generated annual web sales of about $13.5 million. “Following significant discussion and investigation of several alternatives, the debtor has elected to pursue a voluntary restructuring of its debt,” according to the Ritz Interactive bankruptcy filing.

In its filing Ritz Interactive says emergency motions are needed by Sept. 2 to meet payroll and pay for some inventory. If the motions aren’t approved, Ritz Interactive says it may be forced to temporarily cease operating.

Ritz Interactive is the latest web retailer or retailing company with an e-commerce channel to file for bankruptcy or emerge from Chapter 11 as a reorganized entity in 2011. Other retailers filing or emerging from bankruptcy this year include Borders Group (No. 200), Harry & David Holdings Inc. (No. 103), Orchard Brands (No. 79) and Blockbuster Inc. (No. 42).

Comments | 4 Responses

  • I was among the hundreds of people who lost their jobs when David Ritz sold off Boater's World retail stores to keep Ritz Camera afloat. Knowing that I was unemployed, but he was still running the Boater's World website...well, it was always a bitter pill to swallow. Seeing this now...I'm reminded how great karma is. This couldn't be happening to a more deserving guy. I feel for those losing their jobs this time around because of this low life...but I feel justice has been done.

    • Sorry to hear about you difficulties with David Ritz and company G8trMom. One point of clarification, Ritz Interactive is located in Orange County, CA. They licensed the "Ritz/Boaters World, etc." names from Ritz the brick-and-mortar company that filed bankruptcy a few years ago - as you referenced. They function as an eMarketing company with Ritz the "mothership" handling fulfillment. I've known the SVP Sales and Marketing at Ritz Interactive for many years and he is a true gentleman and a very fair business person to suppliers (like me) and associates from what I can tell. I hope they rebound and do well. The two companies are completely different entities that simply have a business partnership in common.

  • It is always unfortunate to watch a company go down but it does happen. The comments reveal a more complex story, one with lessons for the rest of us.

  • i cant believe this!! me and my sister just got two i-pads for $42.77 each and a $50 amazon card for $9. the stores want to keep this a secret and they dont tell you. go here PennyOrder.com

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