Polaroid to Refocus Its Business Plan

Polaroid Corp. announced Tuesday that it will group operations in three major areas starting next year as part of a move to expand outside its core photography business.

It said it will refocus its businesses into the areas of photography, high-resolution imaging, and imaging media and peripherals.

Polaroid said it will offer a voluntary retirement option, although it did not specify how many employees it expected to accept the program.

The firm, which saw net income fall in the third quarter, said it will have to grow in new markets and technologies.

Polaroid made the announcement in a letter to employees in which it said it “intends to build growth in profitable segments of the overall imaging industry, including, but not limited to, instant photography.”

“We believe the best method of building this growth is to create dedicated business units, each highly autonomous, with specific profitability goals.”

Last month, the company reported third-quarter net profit of $27.7 million, or 59 cents a share, compared to $579.2 million, or $10.47 a share, in the year-ago period.

Polaroid said the core photography area will “remain the largest component of our business for the foreseeable future.”

Analysts said they expect the new grouping to be followed by a more significant restructuring that will emphasize operations other than Polaroid’s photography group.

“If this company is to grow in the future, it’s going to come from businesses two and three,” said analyst Eugene Glazer of Dean Witter Reynolds.

The company said that the move will occur in the first quarter and that details will be available early next month.

Analysts said the retirement program is unlikely to affect total head-count because employees may be added to fill new posts in the non-photography groupings as other workers retire.

But analysts saw a possible charge. Glazer said he expects Polaroid to record a charge in the “tens of millions of dollars” from the voluntary retirements.