Polaroid Corporation

Polaroid Corporation
Private
Industry
FoundedCambridge, Massachusetts, U.S.; 1937; 81 years ago (1937)
FounderEdwin H. Land
HeadquartersMinnetonka, Minnesota, U.S.
Area served
Worldwide
Key people
Scott W. Hardy (CEO), Oskar Smołokowski (owner)
Products
ParentPLR IP Holdings, LLC
Websitewww.polaroid.com

Polaroid is an American company that is a brand licensor and marketer of its portfolio of consumer electronics to companies that distribute consumer electronics and eyewear. It is best known for its Polaroid instant film and cameras. In 2017, its parent company has been acquired by Polish investor Oskar Smołokowski.

The company was founded in 1937 by Edwin H. Land, to exploit the use of its Polaroid polarizing polymer.[1]:3 Land ran the company until 1981. Its peak employment was 21,000 in 1978, and its peak revenue was $3 billion in 1991.[2]

When the original Polaroid Corporation was declared bankrupt in 2001,[3][4] its brand and assets were sold off.[5] The "new" Polaroid formed as a result[3][5] itself declared bankruptcy in 2008, resulting in a further sale and the present-day Polaroid Corporation. In May 2017, the brand and intellectual property of the Polaroid corporation was acquired by the largest shareholder of the Impossible Project, which had originally started out in 2008 by producing new instant films for Polaroid cameras.[6] Impossible Project was renamed Polaroid Originals in September 2017.[7][8]

History

Growth under its founder

Polaroid 80B Highlander instant camera made in the USA, circa 1959
Polaroid 3000 Speed Type 47 Rollfilm Expired June 1962
Polaroid Automatic 350 instant camera, made from 1969 to 1971, MSRP $150
Polaroid SX-70 Land Camera model 2 instant camera, made in the USA circa 1972 to 1974
Polaroid Sun Autofocus 660 instant camera, circa 1987
Polaroid OneStep Autofocus SE instant camera, made in the United Kingdom circa 1997

The original Polaroid Corporation was founded in Cambridge, Massachusetts, by Edwin Land in 1937. Described by The Boston Globe as a "juggernaut of innovation", in many respects Polaroid was the Apple of its time with a "leader in Edwin Land, a scientist who guided the company as the founding CEO for four decades".[1] Polaroid’s initial market was in polarized sunglasses — spawned from Land’s self-guided research in light polarization. Land, having completed his freshman year at Harvard University, left to pursue this market, resulting in Polaroid's birth. Land later returned to Harvard to continue his research.[citation needed] Polaroid, owning patents to its polarizer technology, got its start by employing polarization in products that included 3-D movies and glare-reducing goggles for dogs. During World War II, Polaroid designed and manufactured numerous products for the armed services including an infrared night viewing device. He led the company as CEO for 43 years, he headed the Polaroid Corporation, developing it from a small research and marketing firm into one of the best-known high-tech companies ever. Kodak was a customer for some of Land's polarizing products. Recognized by most as the father of instant photography, he included all the operations of a darkroom inside the film itself. Land was pictured on the cover of Life magazine in 1972 with the inscription, "A Genius and His Magic Camera".

When Kodak announced instant film cameras in 1976, Polaroid announced they were suing them, accusing Kodak of having stolen its patented instant photography process.[1] In the two years that followed the lawsuit, total sales of instant cameras climbed from 7.4 million cameras in 1976 to 10.3 million in 1977 and 14.3 million in 1978. The suit in federal court lasted 10 years. Polaroid asked for $12 billion for infringements of its patents by Kodak. The court ruled in favor of Polaroid, and ordered Kodak to cease instant picture production, plus pay Polaroid $909.5 million of the $12 billion it had asked for.[1]

Decline

In 1977, Land introduced the Polaroid Instant Home Movie camera named Polavision, based on the Dufaycolor process. However, the product arrived on the market when videotape-based systems were rapidly gaining popularity, thus it failed to sell well in retail stores and has been described as the swan song for Polaroid. After four decades as chairman, Edwin Land was coerced to resign and leave the corporation he had founded. He died in 1991. The Polavision debacle eventually caused the company to write off $89 million,[1] including most of the manufactured products. The underlying technology of Polavision was later improved for use in the Polachrome instant slide film system.[citation needed]

In the 1980s, Polaroid tried to reinvent itself without Land at its helm by shifting away from a dependence on consumer photography, a market which was in steady decline. Polaroid was forced to make wholesale changes that included having to fire thousands of workers and close many factories. The 1990s saw the advent of new technologies that profoundly changed the world of photography — one-hour color film processing, single-use cameras from competitors, videotape camcorders, and digital cameras.[1]

The company also was one of the early manufacturers of digital cameras, with the PDC-2000 in 1996;[9] however, they failed to capture a large market share in that segment.

They also made 35 mm and multi format scanners, such as Polaroid SpiritScan 4000 35 mm scanner[10] (the first scanner with a 4000 DPI CCD) in 1999, and the Polaroid PrintScan 120 in 2000. The scanners received mixed reviews and saw heavy competition from Nikon and Minolta products. The entire line was discontinued when Polaroid entered bankruptcy in 2001.[citation needed]

Bankruptcy and the "new" Polaroid Corporation

"Chapter 11" controversy

The original Polaroid Corporation filed for federal bankruptcy protection on October 11, 2001. The outcome was that within ten months, most of the business (including the "Polaroid" name itself[4] and non-bankrupt foreign subsidiaries) had been sold to Bank One's One Equity Partners (OEP). OEP Imaging Corporation then changed its name to Polaroid Holding Company (PHC).[11][5] However, this new company operates using the name of its bankrupt predecessor, Polaroid Corporation.[12]

Significant criticism surrounded this "takeover" because the process left executives of the company with large bonuses, while stockholders, as well as current and retired employees, were left with nothing. The company announced a plan that gave the top 45 executives bonuses just for staying at their jobs. Meanwhile, other employees were restricted from selling their stock before leaving their jobs.[1]:31

As part of the settlement, the original Polaroid Corporation changed its name to Primary PDC, Inc.[3][11] Having sold its assets, it was now effectively nothing more than an administrative shell. Primary PDC received approximately 35 percent of the "new" Polaroid, which was to be distributed to its unsecured creditors[11] (including bondholders).[13] As of late 2006 Primary PDC remained in existence under Chapter 11 bankruptcy protection,[4] but conducts no commercial business and has no employees.[5]

Polaroid’s bankruptcy is widely attributed to the failure of senior management — unable to anticipate the impact of digital cameras on its film business.[14] This type of managerial failure is also known as the success trap.[citation needed]

Use of Polaroid brand following bankruptcy

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.[15] 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.[16] It stopped making Polaroid cameras in 2007 and discontinued the sale of Polaroid film after 2009 to the dismay of loyal consumers.[17][18] 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.[19]

Auction for Polaroid Corporation's assets

On April 2, 2009, Patriarch Partners won an auction for Polaroid Corporation's assets including the company's name, intellectual property, and photography collection. Patriarch's $59.1 million bid beat bids from PHC Acquisitions, Hilco Consumer Capital Corp and Ritchie Capital.

This led to some very contentious fighting and litigation, and Patriarch wound up walking away in early May, 2009, and a joint venture between Gordon Brothers Brands LLC and Hilco Consumer Capital LP picked up the pieces. Quoting from a Reuters report which quoted some participants:

The move by New York-based Patriarch, a private-equity firm, [to drop their claim], follows US District Judge James Rosenbaum's ruling on Thursday in Minneapolis that putting the purchase on hold during appeal would threaten operations at Polaroid, which is spending its cash at a rate of $3 million a month.

On April 16, 2009, Polaroid won US Bankruptcy Court approval to be sold to a joint venture of Hilco Consumer Capital LP of Toronto and Gordon Brothers Brands LLC of Boston.[20]

Hilco Consumer Capital and Gordon Brothers Brands announced the closing of the purchase of Polaroid Corporation on May 7, 2009, placing Polaroid Corporation in joint holding under a parent company named PLR IP Holdings, LLC. Former Executive Vice President and General Manager – Americas, Scott W. Hardy was named as the new President of Polaroid Corporation and PLR IP Holdings, LLC. The majority of employees remained in their positions at the company's Minnetonka, Minnesota headquarters as well as office locations in Boston, New York and Toronto.[21]

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.[22]

Licensor

On January 5, 2010, Polaroid appointed Lady Gaga as "Creative Director" for the company.[23] A press release stated that she would be the "new face" of Polaroid.[24]

Acquisition by Smołokowski; collaboration with and rebranding of "Impossible"

In 2017, the holding corporation for Polaroid, PLR IP Holdings, LLC, was acquired by Polish investor Oskar Smołokowski.[25] The last factory producing Polaroid instant picture film cartridges in Enschede, Netherlands, under the trademark Impossible, which had already been led by Smołokowski as CEO, was rebranded to Polaroid Originals later in 2017.[26]

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