Magazine Article


Picture People
Minilab 2005

John Johnson
John Johnson, VP, special projects, at one of four posing stations, in the Garden City, NY location.
Dawn Cumia, Picture People district manager, at a selling station.
The exterior view of the storefront.

The switch to digital is still reverberating around the entire photo industry. Small independent labs have shuttered the doors; other retailers, large and small, have had to make huge investments in equipment just to stay even; the manufacturing sector is in chaos with Kodak reporting a money-losing quarter and announcing an additional 10,000 layoffs, Agfa is struggling with an insolvency situation and Fuji's Imaging Division losing $67 million for the year ending in March.

No question the silver halide genie is out of the bottle, never to return. Every sector of the industry is adjusting to digital, though many long for the halcyon days of film when there was a few bucks profit left for everyone and roll counts were the measure of a lab's success.

With so many photo folks bemoaning digital, there is one company, at least, that is embracing it with open arms: Picture People, a specialty portrait studio operation headquartered in Foster City, CA, and owned by Hallmark Cards, Inc., the $4 billion greeting card firm from Kansas City.

The mass portrait business has long been dominated by leased department operations by firms like CPI, which serves about 1,000 Sears stores; PCA, with about 2,400 Wal-Mart locations plus 1,000 'traveling stores;' Olan Mills, serving K-Mart, Toys 'R' Us and other retailers plus a large church customer base; and Lifetouch, an employee-owned firm with studios at JCPenney and Target along with a large piece of the school market. Hitting tough times, CPI and PCA, both public companies, reported financial losses in their last statements. As a division of Hallmark, Picture People's financial performance is not made public.

PMA indicates that there are 13,245 studios in the U.S., generating $3.7 billion in sales.

The basic rhythm for a portrait sale in this business has long been: come in for a sitting; immediately preview the images on some digital device; select the package; send images back to a central lab for fulfillment; deliver finished orders in 2-3 weeks.
(CPI, incidentally, developed the preview-and-select concept in its Sears portrait operation but was also using it at retail in a crude setup at its Fox Photo minilab store in Austin, TX, which it owned prior to selling the chain to Kodak. Kodak incorporated the idea into a kiosk and it now is an industry standard.)

Many independent photo labs, in need of revenue to offset losses in developing and printing, have set up in-store portrait operations. Capturing the image on film and processing it right away to present the customer with a set of proofs has been the usual process though many are recently turning to digital capture. One-hour turnaround time for the order has been a feature of on-site labs giving it a strong selling edge over the mass- merchant operation.

MotoPhoto, a chain with about 220 franchise locations, has long been an advocate of in-store portrait services and about 70 of its locations now offer them. Digital is an important element to a typical Moto setup which includes a Fuji S2 camera, Express Digital portrait and wedding software and a connection to either the store's minilab unit, usually a Frontier in Moto's case, or an inkjet printer, usually an Epson 4800. I understand new Moto contracts require the franchisee to incorporate portrait services.
In addition, MotoPhoto management is experimenting with a free-standing portrait concept at a Dayton, OH mall called Portrait Avenue that it hopes to refine and eventually franchise. I hope to be reporting on the project in the near future.

Another player in the portrait business is Glamour Shots, a franchise operation with about 100 locations, most of them in U.S. shopping malls. In high-fashioned surroundings, this firm focuses on the female market offering hair and cosmetic makeovers, wardrobe changes, etc. Previewing is done on-site but all work is sent to a central lab for a turnaround of about a week.
But the big numbers in the portrait business are being done by the leased departments in mass- merchant locations. It's where mom brings the kids, the primary market base for the portrait business.

And, it's a market where the customer is used to waiting a few weeks for order delivery.

Picture People is on the brink of changing that turnaround model, according to John Johnson, vice president of Special Projects, for the firm. 'Fast delivery is what mom wants,' according to John.

Currently, Picture People has about 330 locations, primarily in upscale malls in about 40 states. A third of the stores are on the east coast, another third on the west coast.

Picture People is a rebirth of a chain called Express Photo purchased by Hallmark in 1987. Unlike most retail studios that send images to a central lab, its force has been to shoot the picture, process on-site and return the complete package to the customer in about an hour. Committed to fast portrait turnaround from its inception, every Express Photo studio had its own on-site darkroom for processing.

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