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Jerry Lansky Exclusive: Photo-Me Out Of Play for Now



Photo-Me International has apparently lifted a monkey off its back with an announcement that it was no longer in discussion to sell its entire business but did not rule out the possibility of selling certain of its units.

The talks of a possible sale to a variety of European and U.S. venture capital suitors did not seem to affect its credibility in the marketplace as it was announced in London that it had signed a new deal with CVS to supply 700 minilabs to the drug chain in 2007. Photo-Me was the prime lab supplier to CVS in 2006 and is expected to ship about that same number of units this year.

Kevin Donohue, president of Digital Portal, PMI's sales arm in the U.S. , would not comment on the renewal of the CVS contract, stating that all such announcements come from the company's headquarters in Europe .

According to a Reuters' published story, a U.K. stock analyst, Charles Peacock, said it was still possible that the firm might sell separate businesses such as its minilab or instant photo booth operations individually.

The report said the analyst “wouldn't rule out Eastman Kodak Co.” as a potential buyer. A spokesman for Kodak in Rochester had no comment on this speculation. Photo-Me was a major supplier of minilabs to Kodak outside the U.S. for a number of years but that relationship ended about two years ago when Kodak decided to completely step out of the wet lab equipment business, as it concentrated on its wide line of dye-sub systems. It would seem unlikely that they would re-enter that segment.

The Reuters story included comments from PMI's chairman, Vernon Stankey, that, in addition to CVS, the firm “was in discussion with two or three other big U.S. retailers, which were going very well, and he hoped at least one would confirm a full contract within the next couple of months.”

Donohue would not comment on who those other retailers might be but did reveal that they were in the food group.

CVS had been using mainly the Photo-Me model DKS-1510 in the 2006 program but will probably shift to one of the new models introduced at photokina. There are three new labs, DKS-1710, 1750 and 1770, all outputting up to 12-inch wide prints and rated at 1,000, 1,500 and 2,000 prints, respectively. This is the first offering of either 12-inch or high-speed 2,000 print output for Photo-Me.

It is understood that most of the Photo-Me labs going to CVS are being installed as replacements for old Gretag machines as individual lease agreements with Qualex mature. Qualex continues to service CVS labs with tech support and consumables.


   







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