NEW YORK -- 47th Street Photo, a store famous for gruff salesmen and great prices, filed for Chapter 11 bankruptcy protection yesterday citing a tough lender and a tough economy but vowed to keep selling.
The store, named after its location in the midst of the city's diamond district, was founded in 1969 and deftly made the transition from expensive professional cameras to user-friendly automatics, to stereos, computers, answering machines, calculators, televisions, camcorders and an unending array of gadgets.
Until recently housed in a dingy second-floor location, the store's legendarily good prices were a magnet for customers from around the world who would squeeze up a narrow staircase to stand in crowds five rows deep, sandwiched between scuffed counters and half-filled cases.
Crushed together, the elegant and the disheveled alike would yell out orders to an equally densely packed crowd of bearded, yarmulked, employees who would furiously scribble the requests.
Others would phone in their orders from around the world to the store, equally well-known for its vast mail-order business.
Several years without a new hit product and a broad recession, however, thinned the crowds and devastated numerous similar retailers. Crazy Eddie's was the first of the major electronic discount houses to go bust, failing in the late 1980s. Last week another competitor, Newmark & Lewis, went into liquidation.
47th Street Photo vowed yesterday to do otherwise. "We're optimistic. We're fixed to go forward," said Stuart Held, a Columbia, Md., resident, who was installed Jan. 1 as vice president of the chain following his turnaround work with a formerly bankrupt supplier.
"We have a good business," he added. "It's obviously slow, but it's a little better than we thought it would be. Mail order is picking up, and Christmas was ahead of our expectations." The failure of competitors, he said, provided new opportunities.
As part of an evolving new strategy, the retailer has tried to polish its image. The flagship store has closed the old staircase in favor of a downstairs display area opening directly onto the street. Clerks attempt to smile, and one sincerely states that Disney World has become the new model for service. Outside the new entrance a temporary sign reads: "A most exciting event is now taking place at 47th Street Photo."
Customers expressed amazement that that event could be bankruptcy. "We have bankruptcies, too, but not as many as you," said J. Hintz, a businessman from Frankfurt, Germany, as he left the store. "Times may change."
"I'm surprised," said Miguel Oleza, an architect from Barcelona, Spain, who had just bought sunglasses. "I remember it as always crowded."
A few weeks ago, 47th Street Photo closed one of its five branches, just a few blocks from Wall Street. Discussions with the store's landlord faltered, Mr. Held said, when the building went into bankruptcy followed by the failure of the bank that held the building's mortgage.
Yesterday's filing, he added, came after a breakdown in negotiations between 47th Street Photo and Transamerica Commercial Finance, a major lender to the store. Transamerica denied responsibility, issuing a release that attributed the retailer's bankruptcy to tax problems and difficulties with cash flow.
In June, Transamerica won a $10 million judgment against the retailer and agreed on a schedule that required 47th Street Photo to pay it about $62,000 a week. Abraham Weiss, a financial consultant to the shop, said the retailer had paid back about $2.8 million to date.
But yesterday, Transamerica said 47th Street Photo had defaulted on an extraordinary $450,000 payment due Jan. 15, and a day later, failed to make its weekly payment.
In its filing, 47th Street Photo listed $30 million in assets and two statements of liabilities, one for $46.5 million, the other for $57.2 million. The difference, said the store's attorney, Marvin Neiman, was long-term obligations that did not present additional problems.
The company, Mr. Neiman said, has had a "groundswell of support from vendors" and customers.
Asked if he intended to return on his next trip, Mr. Oleza said: "As long as they are still around -- I hope they are still around."