by Diane Berkenfeld
Gretag Closes Its Doors in U.S.
Last month PTN reported on the events surrounding Swiss based-Gretag's eventual decision to file for bankruptcy in Swiss courts.
PTN also reported that the management of the U.S.-based business was putting together a buyout plan for its operation. These plans are now on hold as Gretag Imaging has filed for Chapter 7 bankruptcy in U.S. courts.
Mark DeSimone, president of the U.S. operation told PTN that all jobs at the Holyoke, MA facility have been terminated. The company has filed for Chapter 7 bankruptcy. Chapter 7 bankruptcy is liquidation as opposed to Chapter 11, which stands for reorganization. David Ostrander, of North Hampton, Massachusetts, has been appointed as trustee by the courts. All dealer and other inquiries are to be faxed to him at 413-585-9490.
According to DeSimone, there are parties interested in making proposals for the possible purchase of the U.S. operation but that decision will be left to the Swiss courts to decide. The final outcome of the Swiss operation will also be up to the courts in Switzerland to decide.
How This Affects Gretag's Partners
Qualex is telling its customers that all of Qualex's parts bases are covered because the company has worked with Gretag for some time and has built up a safety stock of parts. They also have a substantial inventory of rebuilt Gretag systems in the warehouse and are prepared to scavenge them for parts if necessary. There are no problems with the wet side as the entire wet side of Gretag machines are made by San Marco Imaging which is continuing operations.
It appears, however, as though Qualex will be shifting its emphasis onto the sale of Noritsu equipment and will not be making any future shipments of new Gretag equipment.
According to DeSimone, Qualex was Gretag U.S.'s biggest customer. The leading retail customer was Duane Reade drugstores. Fuji Photo Film U.S.A.'s wholesale labs were also a large customer; as were CPI Corporation with over 1,000 portrait studios in Sears locations, and school photography studio Lifetouch Inc.
The Beginning of the End
For three months prior to Gretag's collapse, the company hinted at what was coming in a series of news releases.
• October 15: Gretag announces a restructuring program "to bring the company back to profitability next year."
• October 29: Some restructuring details: "Gretag Imaging will be divided into smaller operating units, covering Minilabs, Lab Systems, Kiosks, Sales and Service."
• November 1: Discusses financial restructuring.
• November 11: William J. Recker resigns as President of the Board of Directors.
• December 13: Financially, discusses plans for the issuance of new shares in order to finance operations. Announces that in the future Gretag Imaging will focus on central lab equipment (CLE) while the minilab segment of the business will be sold to the management of Gretag's Italian subsidiary, San Marco Imaging. It's Canadian holding, Telepix, is to be sold. "Efforts to build up the 'Kiosk' business field are to be abandoned." Felix Bagdasarjanz is elected Chairman.
• December 23: "...the problem of over indebtedness, along with the demands on short-term liquidity proved to be insurmountable...As a consequence [of over-indebtedness] ...Gretag ...has decided that it is no longer possible to justify continuing doing business as a Group of Companies."
(Jerry Lansky contributed to this story.)
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