Online sales climbed 24% year over year, while Best Buy’s overall sales were flat.
The company lists assets of $809,000 against liabilities of $7.2 million.
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).