The affordable cameras made by Vivitar Corp. are well-known to consumers, but getting a clear picture of Vivitar’s own prospects is a tough call these days.
That’s because the Chatsworth-based company, whose 35-millimeter cameras remain one of the dominant brands in the United States, is in the process of being sold for the third time in six years. Vivitar, after being owned by an Australian firm and now by a British concern, is supposed to be sold to tiny Concord Camera Corp. of Avenel, N. J., for a proposed $51 million in cash and Concord stock.
Moreover, Concord went after Vivitar last summer only after hiring Victor M. Chernick as Concord’s president. Why him? Because Chernick, who lives in Encino, was Vivitar’s president from 1986 through mid-1989, when he quit out of frustration with one of Vivitar’s former owners.
Vivitar keeps getting resold, even though it is relatively healthy, because its parent companies have been going through rounds of mergers and acquisitions to solve their own problems.
But whether Chernick will get to run Vivitar again is still in doubt. Concord itself is losing money and has big financial problems, and Chernick and a major Concord investor, Ira J. Hechler, confirmed that Concord is renegotiating terms of the Vivitar purchase.
“We’ve already gone back and said we can’t finance this deal” as originally proposed to Vivitar’s present owner, Gestetner Holdings PLC, Chernick said.
Hechler said Monday that if the deal goes through, it’s “very probable” that the Concord and Vivitar operations would be combined. He also said “it is possible” that the merged companies would be run entirely out of Chatsworth.
Amid this confusion, Vivitar has also been shifting how it competes in the $1.5-billion U. S. camera market. But its new focus hasn’t made Vivitar any larger than it was in 1988.
Back then, the company’s annual sales were about $100 million, and its best-growing business was for “point-and-shoot” compact 35-millimeter cameras that have become increasingly popular with American shutterbugs.
But Vivitar was also among the top independent makers of fancy lenses and flash units that could be attached to more expensive “single-lens reflex” (SLR) cameras made by the likes of Nikon and Canon.
Nonetheless, Vivitar looked at the 1990s and decided to change its depth of field. The company focused more on the hand-held cameras and less on developing new lenses and flashes. So the cameras now account for 62% of Vivitar’s sales, while the lenses, flashes and some other type of Vivitar cameras account for the balance, said Chuck Peralta, Vivitar’s executive vice president of marketing.
“At one time, Vivitar was the top lens line,” said Alan Bergson, general manager of Honest Abe’s Focus Camera Inc. in Brooklyn, N. Y., a mail-order house for camera gear. “We don’t get too many calls for Vivitar lenses any more.”
Herbert Keppler, vice president and publishing director of Popular Photography magazine, said of Vivitar: “They’re putting most of their eggs in the point-and-shoot basket.”
Yet Vivitar’s sales for its fiscal year that ended Oct. 31 were still around $100 million because the compact cameras--which typically list at retail for $50 to $100--cost much less on average than the SLR accessories.
“Our flat dollar sales are a reflection of the changing mix of products,” Peralta said. He said that unit sales of the company’s compact cameras have been rising and that Vivitar overall is profitable, but he declined to provide details.
He also maintained that in the compact 35-millimeter market, Vivitar is “constantly in the top four” in market share, with Eastman Kodak Co., Minolta and Olympus. Keppler agreed, saying, “Vivitar is pretty close to the top.”
U. S. sales of compact 35-millimeter cameras made by all the companies were 9.5 million units in 1991, or 61% of the 15.5 million total cameras sold in the United States that year, according to the Photo Marketing Assn., a trade group. Four years earlier, compact 35-millimeter sales were only 6.4 million, or 34% of the total.
So it appears that Vivitar’s decision to concentrate on point-and-shoot cameras was well-founded. How then to explain why Vivitar, which employs 120 people, keeps getting bought and sold? Because Vivitar isn’t a big enough star to avoid getting lost in the shuffling of assets by its owners.
Vivitar goes back to the late 1930s when Max Ponder and John Best, who fled to Los Angeles from Hitler’s Germany, began selling camera accessories out of their car. Ponder & Best eventually became Vivitar and, in 1985, the company was bought by Hanimex Group, an Australian photo products concern that, in turn, was owned by a big Australian real estate developer named Chase Group.
In the late 1980s, however, Chase Group was pummeled by a real estate slump and, needing cash, sold Vivitar, Hanimex and a handful of other businesses to Gestetner for an undisclosed sum in early 1990. Chernick had left six months earlier, claiming that he couldn’t get enough support for Vivitar from the Australian group.
Gestetner markets office-automation equipment. The company quickly tried to resell some of the Chase properties for a quick profit, but Vivitar and Hanimex went begging until this year, Chernick said.
“I don’t think it ever fit into Gestetner’s product mix,” Popular Photography’s Keppler said of Vivitar.
In September, Concord and Gestetner reached tentative agreement for the Vivitar/Hanimex sale. The deal called for Concord to pay $40 million in cash, 1.3 million shares of its stock--which, at its closing price Monday of $8.50 a share, is worth an additional $11 million--and to assume an undisclosed amount of short-term debt.
But Concord, a maker of inexpensive pocket cameras under the names Concord, Keystone and Safari, lost $2.7 million on sales of $57.4 million in its fiscal year that ended June 30, and it lost an additional $1.8 million in the quarter that ended Sept. 30.
As of Sept. 30, the company had cash and equivalents on hand of only $1.2 million and short-term debt of $18.5 million, although Concord said Monday that it raised $16.5 million by privately selling an additional 3.3 million common shares. The company has also enlisted the financial help of Hechler, a New York investor, to help pay its bills.
Hechler, 74, is known for his past investments in apparel companies, such as Leslie Fay Cos. He said Concord’s appeal is that it is one of the three main players--along with Kodak and Fuji--in the burgeoning market for “disposable” compact cameras, which are “probably the hottest item in the camera field today.”
If the Vivitar deal had gone through as originally planned, Hechler was to exercise warrants that would have pumped more than $22 million into Concord to help pay for the purchase and, in turn, likely given him a controlling stake in Concord’s stock, according to documents filed with the Securities and Exchange Commission.
But Concord hasn’t said whether it has secured the rest of the cash needed for the Vivitar purchase, and the deal “is being renegotiated,” Hechler said. “We may finance it differently at the same price.”
Chernick maintained that he’s already made big strides in improving Concord’s operations, and that Hechler’s money is helping stabilize its finances. Vivitar, he said, would further help by combining Concord’s low-cost manufacturing with Vivitar’s brand recognition and distribution channels.
But no matter who purchases Vivitar, there’s the question of whether the repeated buying and selling of the company hurts Vivitar’s name and reputation, which is one of its most valuable assets. This is a company many Americans recall from decades ago when entertainer Arthur Godfrey advertised its products on television.
Vivitar’s Peralta says no. “I don’t think the change of ownership has impacted Vivitar’s image one way or the other,” he said. “I don’t think there’s been any cause for a dealer to walk away from us and think, ‘Gee, they’re a different company.’ ”