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Fotomat Closing Down Here

re-posted from the Chicago Tribune
September 13, 1988|By David C. Rudd

270 To Lose Jobs In Chicago, Milwaukee Sept. 24

Those little Fotomat kiosks, formerly the hot ticket for snappy film processing, will fade into oblivion in Chicago and Milwaukee later this month, John Chase, president of Fotomat Corp., said Monday.

Chase said the company will close 64 kiosks and stores in the Chicago area and 22 in the Milwaukee area on Sept. 24. That will leave about 270 employees looking for work.

He said the growth of one-hour photograph processing laboratories and the popularity of drugstore and grocery store film dropoff points defeated Fotomat in the two areas, which he called “peripheral“ markets.

“It was hoped that we could do something to make the business start growing again,“ Chase said, “but we had to make the tough decision to close.“

Fotomat kiosks are more popular on the East Coast and in the West, Chase said. He added that Fotomat was a late arrival into the one-hour lab market. Of the 15,000 mini-labs around the country, Fotomat Corp. operates 100, he said.

When it first entered the photo-finishing business in 1967, Fotomat was favored for its drive-up convenience, fast service and low price, Chase said. But last year the company closed a lab located in west suburban Addison. Film deposited at a Chicago or Milwaukee kiosk is now transported to a Cleveland laboratory, processed overnight and returned to the customer the next day, Chase said.

“It`s not the most efficient process, as you could imagine,“ he said.

He said Fotomat will sell the vacant kiosks.

Fotomat is a privately owned subsidiary of Konica Corp. of Japan. Chase declined to disclose Fotomat`s net sales or revenue.

The company once held an 18 percent share in the film-processing market, but it now holds 2 percent, Chase said.

According to the Photo Marketing Association, a trade association in Jackson, Mich., the one-hour labs hold a share of about 29 percent; wholesale labs, which sell photo-finishing to smaller stores, have a share of about 34 percent; captive labs, operated by the drugstores and grocery stores, hold a 26 percent share; and mail-order labs hold about 9 percent.

Konica split Fotomat into two divisions in July, Chase said. One division, Fotomat Corp., comprises one-hour labs; 1,700 kiosks, which accept film for processing and sell film; and 200 stores, which accept film for processing and sell film, albums and frames. The other division, Quality Photo Systems Inc., is made up of eight wholesale film-processing laboratories in the East, the Midwest and the West.

Chase said the reorganization did not cause the Chicago and Milwaukee closings.

This was something that was being contemplated,“ he said. “The market was contracting and something had to be done.