Irvine-based Ritz Interactive Inc. has gone from Internet sales of cameras to iPods, TVs, golf clothes, even boating gear.
Last year, the company’s collection of Web sites generated $111 million in sales, ranking it as the 114th largest Internet retailer, according to industry trade magazine Internet Retailer.
“One day we were selling 1,000 digital cameras, the next day we were selling fishing hooks,” Chief Executive Fred Lerner said, “which meant our core competency was no longer photography, it was Internet retailing.”
The company got its start as the online site of Ritz Camera Centers Inc., the Maryland-based chain of photography shops.
The two companies share the Ritz name but are run separately. David Ritz, chairman and cofounder of Ritz Interactive, owns Ritz Camera Centers.
Cameras still are big for Ritz Interactive. In the first quarter, sales were up 30% from a year earlier to $25 million, driven largely by sales of the digital version of single reflex lens cameras.
The company runs 13 Web sites with six of them related to photography. Others include BoatersWorld.com, which sells boating supplies and clothes, and FishingOnly.com, which has fishing gear.
ShopatShark, which sells Greg Norman golf gear and apparel, also is a Ritz brand. Norman is on Ritz Interactive’s board.
Ritz Interactive has grown through acquisitions. It’s seeking other Internet retailers, such as shoe and clothing sellers.
“We can integrate them very easily into our system,” Lerner said.
Lerner and David Ritz started Ritz Interactive in 1999 at the height of the dot-com boom. The company pulled through the Internet crash by following standard business practices, Lerner said, like minding cash flow.
The company is small compared to the big names of online retailing. It plays up its inclusion among the top 500 online retailers, which make up two-thirds of Internet retailing, according to Internet Retailer magazine.
Internet sales still are small at about 3% of overall yearly retail sales. But this year online sellers should outpace their offline counterparts, which are wrestling with a downturn. Internet sales are seen growing 17% to $204 billion this year, according to Shop.org, the Internet retailing arm of the National Federation of Retailers.
Ritz Interactive handles marketing and credit card processing and outsources warehousing and distribution. It works with Santa Ana-based Ingram Micro Inc., which ships Ritz Interactive’s consumer electronics.
Ritz “has been a fantastic partnership,” said Bill Zielke, vice president of marketing for Maryland’s Bill Me Later Inc., which works with Ritz Interactive to allow customers to buy on the spot and be billed six months later, interest free.
The service helps to boost how much people might buy at one time, Zielke said.
“That’s a huge benefit to Ritz,” he said.
The company has thought about going public. In 2005, it filed plans to do so with the Securities and Exchange Commission but pulled back as the market began to soften.
Eyeing Acquisitions
With the market for public offerings in the doldrums now, Ritz is biding its time and has the cash on hand to make smaller acquisitions, according to Lerner.
He points to a stack of books in his office full of leftover online retailers from the dot-com days that want to sell themselves. Their funding has run out, he said.
“They’re getting tired,” he said.
Lerner said he’d rather acquire a larger business than a smaller one, thanks to the ease of doing business on the Internet.
“It’s just as easy to make a large acquisition as a small acquisition,” he said. “It’s the same work.”
Ritz does its share of online advertising, mainly through Google Inc.’s assorted advertising options, such as AdWords, which brings up advertisers in the sidebar of Google’s search page.
The company, which has some 40 workers, has one person dedicated to buying online advertising and bidding on keywords to get Ritz ranked higher in Google’s search engine.
Ritz also has another person whose only job is “search engine optimization,” which is the art and science of designing a Web site so that it ranks higher in search engines.
Lerner had had a long career in film processing. He sold his Santa Ana-based company Lerner Processing, founded in 1977, to Rochester, N.Y.-based Eastman Kodak Co. in 1992, and served as chief executive of Kodak Processing Labs for seven years.
Ritz wasn’t the first online camera retailer to the market, Lerner said.
Cameraworld.com and Photoalley.com were. But a few years later, Ritz bought both of those companies.
Lerner said he didn’t expect the Internet to change things as quickly as it did.
“Admittedly, I thought it would be more of an evolution. Retrospectively, it was more of a revolution,” he said. “Nine years ago I would’ve never thought that you could sell shoes online.”
Lerner said he also didn’t know that film would peak in 1999. Digital has all but replaced film now.
He said he’s not the least bit nostalgic.
“The only thing between the photographer and the subject is a piece of glass,” Lerner said. “Everyone now has a darkroom in their PC.”
