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Company Profile of Polaroid Corporation
Company Profile of Polaroid Corporation - May 12th, 2011
Polaroid Corporation is an international consumer electronics and eyewear company, originally founded in 1937 by Edwin H. Land. It is most famous for its instant film cameras, which reached the market in 1948, and continued to be the company's flagship product line until the February 2008 decision to cease all production in favor of digital photography products. The company's original dominant market was in polarized sunglasses, an outgrowth of Land's self-guided research in polarization after leaving Harvard University after his freshman year—he later returned to Harvard to continue his research.
After Polaroid defeated Kodak in a patent battle, Kodak left the instant camera business on January 9, 1986.
Polaroid developed an instant movie system, Polavision, based on the Dufaycolor process. The product arrived on the market when videotape based systems were rapidly gaining popularity. As a result, Polavision was unsuccessful and most of the manufactured product was sold off as a job lot at immense cost to the company. Its underlying technology was later improved for use in the Polachrome instant slide film system.
The company also was one of the early manufacturers of digital cameras, with the PDC-2000 in 1996; however, they failed to capture a large market share in that segment.
On October 11, 2001, Polaroid Corporation filed for Chapter 11 bankruptcy protection. Almost all the company's assets (including the "Polaroid" name itself) were sold to a subsidiary of Bank One. They went on to form a new company, which also operates under the name "Polaroid Corporation". It stopped making Polaroid cameras in 2007 and stopped selling Polaroid film after 2009, to the consternation of some users.
The renamed "old" Polaroid now exists solely as an administrative shell. Its bankruptcy was widely believed to be the result of the failure of its senior management to anticipate the effect of digital cameras on its film business.
On December 18, 2008, the post-reorganization Polaroid Corp. filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of Minnesota. The bankruptcy filing came shortly after the criminal investigation of its parent company, Petters Group Worldwide, and the parent company founder, Tom Petters.
On January 5, 2010, Polaroid partnered with Lady Gaga, appointing her as Creative Director for the company. A press release stated that she would be the "new face" of Polaroid.
Polaroid Corporation, founded on Edwin H. Land's belief that consumer markets should be created around inventions generated by scientific research, is a world leader in instant photography. The company manufactures and sells more than 50 types of film and more than 100 cameras and instant camera accessories. Instant photography products, since their 1948 debut, have consistently provided the bulk of Polaroid's income. Other operations, which the company announced in early 1999 that it may jettison, include sunglasses, graphic arts, glare-reducing polarizers, and holography.
After the bankruptcy, the Polaroid brand was licensed for use on other products with the assistance of Skadden, Arps, Slate, Meagher & Flom. In September 2002, World Wide Licenses, a subsidiary of The Character Group plc, was granted the exclusive rights for three years to manufacture and sell digital cameras under the Polaroid brand for distribution internationally. Polaroid branded LCDs and plasma televisions and portable DVD players had also appeared on the market.
On April 27, 2005, Petters Group Worldwide announced its acquisition of PHC. Petters has in the past bought up failed companies with well-known names for the value of those names. The same year, Flextronics purchased Polaroid's manufacturing operations and the decision was made to send most of the manufacturing to China. The "new" Polaroid Corporation filed for Chapter 11 bankruptcy on December 18, 2008.
On June 19, 2009, The new holding corporation for Polaroid, PLR IP Holdings, LLC announced an exclusive 5-year agreement with Summit Global Group to produce and distribute Polaroid branded digital still cameras, digital video cameras, digital photo frames and PoGo™ branded mobile products. Summit Global Group added several former Polaroid employees to their staff. The company expects the agreement to yield $1.3 billion in retail sales over an unspecified period beginning in 2009.
In the mid-to-late 1990s Polaroid faced an increasingly uncertain future. Overall sales were stagnant--the $2.15 billion figure of 1992 being repeated in 1997, before a more dismal result was announced for 1998: $1.89 billion. Demand for instant film was on the decline, in part because of the rapid growth of one-hour photo shops for conventional film, and the company's other forays were less than total successes. The Captiva had a very strong debut, but then sales dropped off and Polaroid cut back production. Booth retired in late 1995 and was replaced as chairman and CEO by Gary T. DiCamillo, who had been an executive at the Black & Decker Corporation, where he earned a reputation for cost-cutting, improving productivity, and rapidly developing new products. Soon after taking over, DiCamillo initiated a restructuring at Polaroid, which included a workforce cut of about 15 percent, or 1,570 jobs, and a charge of $247 million for 1995, leading to a net loss of $140.2 million for the year. DiCamillo also overhauled the company's management team, bringing in additional marketing and product development-oriented leaders from such firms as RJR Nabisco and Kraft Foods.
Further changes came in 1996 when Polaroid largely abandoned its venture into medical imaging, an area in which it had invested about $800 million, when it sold the bulk of its loss-making Helios unit to Sterling Diagnostic Imaging Inc. This sale led in part to a $33 million charge recorded in 1996, a year in which the company reported a net loss of $41.1 million.
The new management team at Polaroid concentrated on rolling out 30 to 40 new products each year, aiming to diversify the company's offerings. These included a disposable flashlight, alkaline batteries, and a new line of polarized sunglasses. In December 1997, meanwhile, Polaroid announced an additional workforce reduction of 15 percent, or about 1,500 jobs. The company took another restructuring charge of $323.5 million, resulting in a 1997 net loss of $126.7 million. During 1998 Polaroid announced additional job cuts of 600 to 700 employees, took a restructuring charge of $50 million, and posted a net loss of $51 million. The worldwide economic difficulties that began in 1997 proved particularly troublesome for Polaroid, which had long generated a significant portion of its revenue outside the United States. The hardest hit market for Polaroid was Russia, which had been the company's second largest market in 1995, accounting for $200 million in revenues; for 1998 Polaroid sold only about $25 million worth of goods in that economically troubled nation.
As Polaroid's red ink continued to flow, speculation about a possible takeover was rife. In addition, while DiCamillo had initially emphasized broadening the company's product mix when he came on board, he announced in early 1999 that he was considering selling four business units--sunglasses, graphic arts, glare-reducing polarizers, and holography--that had been key components of his diversification efforts. DiCamillo said that he wanted to focus the company on its core instant photography business. The emphasis would also be on the consumer market, with particular attention given to developing youth-oriented instant cameras, such as the I-Zone Instant Pocket Camera, which was a slender camera that produced miniature instant prints. The Pocket Camera had been a great success following its May 1998 debut in the Osaka region of Japan, and would be released in the United States in the summer of 1999. Other products the company was banking its future on included PopShots, the first instant one-time-use camera; and the JoyCam, a smaller, economically priced version of Polaroid's standard instant camera. The company was also attempting to win the race to develop the first digital camera with an instant print. But the larger question that especially clouded Polaroid's future was whether instant photography was becoming technologically obsolete.
Principal Subsidiaries: Polaroid A.G. (Switzerland); Polaroid A/S (Denmark); Polaroid Asia Pacific International Inc.; Polaroid Asia Pacific Limited; Polaroid Aktiebolag (Sweden); Polaroid Australia Pty. Limited; Polaroid do Brasil Ltda. (Brazil); Polaroid Canada Inc.; Polaroid Caribbean Corporation; Polaroid Contracting CV (Netherlands); Polaroid Espana, S.A. (Spain); Polaroid Europe Limited (U.K.); Polaroid Far East Limited (Hong Kong); Polaroid Foreign Sales B.V. (Netherlands); Polaroid Foundation; Polaroid Gesellschaft mit beschrankter Haftung (Germany); Polaroid Gesellschaft m.b.H. (Austria); Polaroid India Private Limited; Polaroid International B.V. (Netherlands); Nippon Polaroid Kabushiki Kaisha (Japan); Polaroid Malaysia Limited; Polaroid de Mexico S.A. de C.V.; Polaroid (Norge) A/S (Norway); Polaroid Oy (Finland); Polaroid Singapore Private Limited; Polaroid (U.K.) Limited; Polaroid Memorial Drive LLC; Polaroid Partners, Inc.; Inner City, Inc.; PMC, Inc.; Polint, Inc.; PRD Capital Inc.; PRD Investment Inc.; PRD Management Limited (Bermuda); PRD Overseas Limited (Bermuda); Sub Debt Partners Corp.; Troon, Inc.
In the 1990s, Polaroid was involved in the corporate sponsorship of NASCAR. For several years, Polaroid was the principal sponsor of NASCAR's 125 mile Featherlite Modified race at Watkins Glen and it was called the "Polaroid 125". The Polaroid name was also used in sponsorship in the NASCAR Busch series. In 1992, Polaroid was the principal sponsor of female NASCAR driver Shawna Robinson's #25 Oldsmobile in the Busch Series. They continued as her principal sponsor when she moved to the other car numbers in 1993 and 1994.
Polaroid currently sponsors the Target Chip Ganassi entry of Juan Pablo Montoya's #42 Chevy Impala in the NASCAR Sprint Cup Series and entries in the IRL Indy Car Series, including the car driven by Dario Franchitti which won the 94th running of the Indianapolis 500 on Sunday May 30, 2010.
The Polaroid name has also been associated with the NOPI drift series. Polaroid was the principal sponsor of the 350Z driven by Nick Bollea, who placed third in Pittsburgh and tenth in Denver at NOPI events in the 2007 season. Polaroid chose not to renew their sponsorship of Bollea for the 2008 season. No official reason has been given, but this decision was made in the wake of a serious accident and allegations of illegal street racing by Bollea.
Sales: $1.85 billion (1998)
Stock Exchanges: New York Pacific
Ticker Symbol: PRD
NAIC: 333315 Photographic & Photocopying Equipment Manufacturing; 333314 Optical Instrument & Lens Manufacturing; 339115 Ophthalmic Goods Manufacturing
549 Technology Square
Cambridge, Massachusetts 02139
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