Telus just announced that it will shutter operations of iconic Canadian photography retailer BLACKS, closing all stores on August 8 of this year. We spoke with retail expert Antony Karabus, CEO of leading retail consulting firm HRC Advisory, to gain insight into Telus’ decision.
Mr. Karabus began by saying:
“It’s the sad ending of an era for the company whose jingle “Blacks is Photography” was ubiquitous throughout Canada for many decades, and it is a very sad day for many Canadians, especially those old enough to remember the special experience when you went to Black’s to pick up your packet with 20 analog photos from your family vacation or other experience and you shared them with the family”.
BLACKS was founded by Eddie Black in 1930 and in 1948, his sons opened Toronto’s first specialty camera store called Eddie Black’s Cameras. The family-owned company went public in 1969 and saw several owners over the years, including Scott’s Hospitality Inc., Fuji Film, and Reichmann Hauer Capital Partners, prior to being bought by Telus in 2009 for $28 million. Mr. Karabus said that “BLACKS has shrunk substantially to the point where it now operates 59 brick-and-mortar stores, substantially less than the 250 plus stores it operated following its acquisition of Astral Photo during the Fuji ownership era. BLACKS was a very large customer for the manufacturers of paper, chemical, and analog machines to process and print the photographs".
Last year, the company rebranded as BLACKS, spelled all-caps and without a possessive apostrophe. Rebranding also involved launching a new store concept, based largely around prints and other creative solutions for digital photography. These efforts weren’t enough to make operations profitable, however.
In our conversation with Mr. Karabus, he explained how BLACKS’ closing is partly due to changing times, competition, and lack of investment capital. He described how “prior to the digital era, Black’s as it was then known was the ‘king of photofinishing’ in Canada, and that many Canadians who grew up during the analog age will lament its loss while remembering its catchy jingle. The passion and commitment of the Black family really created an icon in its day”.
At one time, consumers would take a roll of film into Black’s (as it was then spelled) to have photos printed, and many consumers ordered extra paper copies of their favourite images. Times have changed, according to Mr. Karabus who said:
“Because of online image/file sharing with the rise of social media and 'cloud storage' and digital imaging, consumers are have radically changed the way they create, store and display digital images. Instead, smart phones have virtually eliminated the need for purchasing point-and-shoot photofinishing camera. While BLACKS did an excellent job with emerging digital services such as 'the shoebox service' where consumers could take a box of old DVD’s and Analog photos into a BLACKS store and get them digitized, the new market just was not enough to sustain a national chain and provide an adequate return on the capital necessary to fund the necessary transformation that was started with the rebranded stores and would require much time and patience on the part of the shareholder, Telus.”
Mr. Karabus also noted that a number of large, well-funded competitors offer photo printing at lower cost with very little space in their stores, including behemoths such as Costco, Shoppers Drug Mart, Loblaw and Walmart. Even those retailers have scaled back their photofinishing operations, given the way in which most consumers produce and store their digital images.
Ultimately, according to Mr. Karabus, shareholders will allocate capital to the places where the best returns will be obtained in the desired time-frame. As technology and consumer preferences change, so must retailers. Retailers who fail to adapt to changing technology and consumer preferences early, will find it very hard to remain profitable and in business. He said “ it is sad to see the demise of BLACKS, with almost 500 Canadians losing their jobs”.
Antony Karabus is CEO of HRC Advisory, a leading retail advisory firm. He has advised retailers on strategic and financial performance issues for over 25 years and has assisted numerous North American retailers to create significant shareholder value during this time. Karabus has advised numerous national retail chains in key sectors, including department store, specialty apparel and hard lines, big box, and grocery. He can be reached at firstname.lastname@example.org.