Vivitar Clicking Away at 50 : Chatsworth Photographic Firm Stays Competitive
After fleeing Hitler’s Germany in 1938, Max Ponder and John Best emigrated to Los Angeles and began selling camera accessories out of their car.
Ponder was the salesman, and when he convinced a camera store to buy equipment, he would fetch the products from the car trunk. Best, the businessman, would write the invoice in the back seat.
Their partnership, Ponder & Best, eventually became Vivitar Corp., a Chatsworth company that today is a leading independent marketer of cameras, lenses, flashes and other photographic equipment.
Vivitar, with $100 million in sales for its fiscal year ended June 30, also is one of the last American companies in the $2 billion U.S. hand-held camera market now dominated by the Japanese.
But in reaching its 50th birthday, Vivitar is celebrating more than its survival. The company’s earnings have improved markedly since it was bought in 1985 by Hanimex Group, an Australian photo products concern.
Vivitar became well known to consumers in the 1960s and 1970s when the company competed with Kodak and others by selling millions of so-called 110 pocket cameras. Yet Vivitar owes a large part of its survival to Canon, Nikon, Minolta and the other Japanese camera giants.
The company long has sold lenses to fit most brands of 35-millimeter, single-lens-reflex cameras, often with lower prices than what the camera makers charge for their own equipment. For instance, a New York City camera store recently advertised a 70-210mm auto-focus zoom lens for Minolta’s Maxxum camera for $184.95; Vivitar’s version of that size lens cost $148.95.
Gary J. Davis, Vivitar’s executive vice president for operations, bristles at any suggestion that Vivitar’s prices are lower because its quality lags. Instead, he said that because Vivitar is making lenses for all cameras, its production volume exceeds most individual camera makers, and that high volume enables Vivitar to undercut the camera makers on price.
Vivitar particularly benefited in the 1970s, when SLR cameras such as Canon’s AE-1 appeared with automatic features that made them easier to use. Amateur photographers bought millions of SLRs and then sought zoom and wide-angle lenses, often from Vivitar.
Vivitar’s flash units also adapt to most cameras, and the company’s innovations in camera lighting in the early 1970s have made its flashes, notably the model 283, a staple of professional photographers.
Vivitar showed that an independent company could sell “products as equal, and maybe even superior, to some of the camera makers’ own brands,” said Herbert Keppler, publishing director of Popular Photography magazine.
In recent years, however, Vivitar has sharply expanded its depth of field. The company now competes head-on with the Japanese and Kodak in the industry’s hottest market--compact 35mm cameras, those simple-to-use, relatively inexpensive models whose popularity has soared in recent years.
Compact 35mm cameras, which generally cost under $200 and have fixed lenses, now account for 58% of Vivitar’s sales, up from only 10% five years ago. Vivitar expects sales to climb even higher as more consumers seek easy-to-use 35mm cameras and remember Vivitar’s name.
“There’s an advantage to having been around for 50 years,” Davis said. “There are a lot of people who used our 110 cameras, going all the way back to the days where we had Arthur Godfrey on television advertising them for us.”
Industrywide, compact 35mm cameras accounted for about 6.4 million units, or 34.2% of the 18.7 million total cameras sold in the United States last year, according to Photo Marketing Assn. International, a trade group in Jackson, Mich. That’s up from 2.3 million, or 13%, of the 17.8 million cameras sold five years earlier. As compact sales have surged, SLR sales have slowed to 8.5% of total sales last year from 12.4% in 1983, the association said.
New Aggressiveness
Vivitar President Victor M. Chernick conceded that Vivitar’s compact 35mm cameras don’t always match the Japanese models feature for feature. Instead, Vivitar tries to provide most features at a cheaper price, he said.
In addition, “we probably have as high, if not higher, brand recognition than Minolta, Nikon and Canon,” said Chernick, adding that Vivitar has a 15%-20% share of the market, roughly the same as those Japanese producers.
Keppler said Vivitar might be overstating its success. Minolta, Canon and Nikon each have slightly more than 20% of the market, while Vivitar’s share is somewhere in the teens, he said.
Regardless, Chernick’s comment underscores a renewed aggressiveness at Vivitar that began when the company was acquired for $18.6 million by Hanimex, which in turn is owned by Australia’s Chase Group, a major real estate developer.
As Hanimex took over, Vivitar was losing $5 million for its fiscal year ended June 30, 1986. But the next year Vivitar earned $1 million, and in the year ended this past June the company’s profit jumped to about $4 million, Chernick said.
Whereas most Japanese camera makers design and build their products in Japan and then ship them to America, Vivitar designs and tests its products in Chatsworth, and has Asian manufacturers--such as Japan’s Matsushita, the parent of Panasonic--build the goods to its specifications.
Vivitar’s marketing, distribution and service operations also are in Chatsworth, which is the company’s only U.S. facility. The company moved its headquarters there from Santa Monica after the Hanimex acquisition.
Improved Performance
“We literally go from birth to death with everything about the product except screwing it together,” said Davis said.
But screwing it together got a lot more expensive for Vivitar in late-1985. That’s when the dollar began its sharp decline, pushing up Vivitar’s cost of importing its cameras. The lower dollar erased Vivitar’s profit margin and led to its fiscal 1986 loss.
After Hanimex bought the company, Best, who had owned most of Vivitar’s stock following Ponder’s death in 1969, retired as president. Chernick, a Winnipeg native who was running Hanimex’s Canadian operations, was named the new president.
Chernick and Hanimex took several steps to improve Vivitar’s performance and offset the impact of currency fluctuations. They upgraded its computer system to streamline marketing, inventory and distribution lines. They moved much of its manufacturing from Japan to regions such as Korea, China and Malaysia that have lower labor costs. The merger also enabled Vivitar, which employs 119 people, to expand its sales through Hanimex’s worldwide distribution channels, at little additional cost.
The changes, together with booming sales for compact 35mm cameras, gave Vivitar a fresh boost. But the company doesn’t plan to abandon its traditional role as an independent provider of lenses and flashes, even though SLR sales are slowing.
Lens and flash sales have been flat in recent years, Chernick acknowledged. But they still account for a combined 30% of Vivitar’s sales “and we’re still making money at it,” he said. Advances in lens design, such as automatic focusing features, also keep giving SLR owners reason to upgrade, he said.
In looking ahead, however, Vivitar is focusing on video--and a return to its roots.
Vivitar believes camcorders, the video cameras whose tapes can be replayed on videocassette recorders, will become as popular as VCR themselves. Camcorders currently cost around $1,000, but Davis said it won’t be too many years before they cost less than $300.
And as their popularity grows, so too will demand for fancy lenses, artificial lighting and other add-on items that enhance the picture--gadgetry Vivitar expects to provide as it has for the SLR camera market.
“One of these days there will be a Canon AE-1 of camcorders,” Davis said, “and guess who’s going to be there as the predominant supplier of video accessories?”
