Monday, March 22, 2010

Missouri company hopes to reopen Kiddie Kandids' stores

Photo studio » Bidding company says parents will get their kids' pictures.

By Steven Oberbeck

The Salt Lake Tribune

Updated: 03/19/2010 07:11:24 PM MDT

All of the assets for the now-closed Kiddie Kandids children's photography studio could go to St. Louis-based CPI Corp. for $2.6 million. An asset auction was held Friday morning in Salt Lake City. (Francisco Kjolseth / The Salt Lake Tribune file photo)

One of North America's leading portrait studio operators is offering to buy all of the assets of the bankrupt Kiddie Kandids. CPI Corp. officials Friday said they plan to reopen the company's stores once the purchase is approved by the U.S. Bankruptcy Court for Utah.

CPI, which operates approximately 3,000 locations principally in Sears and Walmart stores in the United States, Canada and Mexico, put in the high bid for Kiddie Kandids' assets at an auction held Friday by U.S. bankruptcy court appointed trustee Duane Gillman.

St. Louis, Mo.-based CPI bid $2.6 million for all of the Utah company's assets, including its headquarters building in Sandy.

"They are a good company," Gillman said of CPI following the closing of the bidding. "They know the business and they are good at it."

More importantly, though, Gillman said CPI will see that Kiddie Kandid's former customers will get all the photographs of their children that are due them. "And for many of those customers those portraits are absolutely priceless."

David Meyer, the chairman of CPI, said his company intends to reopen the Kiddie Kandids stores but that it hasn't yet determined when that will take place.

CPI's offer still must be approved by the bankruptcy court. A hearing on that matter is expected to take place on March 30, Gillman said.

Kiddie Kandids, which operated 184 studios nationwide including 134 in Babies R Us stores, filed for bankruptcy in mid-January after abruptly closing its doors. The sudden closings cost an estimated 1,400 employees their jobs, many of whom were still owed for hours they previously had worked.

CPI indicated they would "reach out" to former employees when it comes time to staff the locations. And Gillman said he is hopeful the sale of Kiddie Kandid's assets will provide approximately $900,000 that can be used to pay those former employees their back wages.

At the time Kiddie Kandids filed for bankruptcy, the company indicated it had only $1.2 million in assets and $39.3 million in debts. Bankruptcy court records show the company lost $4.6 million in 2007, $19.5 million in 2008 and $20.5 million last year.

The company's principal investor, Sorenson Capital, blamed the demise of the 35-year-old Utah business on the economic downturn and the availability of inexpensive, user-friendly digital photography.

In contrast the publicly held CPI, whose shares are listed on the New York Stock Exchange under the symbol "CPY," lost $7.69 million in its 2009 fiscal year but generated $3.58 million in profit in 2008, and $16.3 million in net income in 2007.

And last month CPI's board of directors declared the company's first quarterly dividend -- 16 cents per share.