Camera chain Jessops is almost £70 million in the red, it announced today. So does this mean the once bouncy digital camera market is on the slide?
Poor sales and stiff competition from online retailers and supermarkets has contributed to Jessops' dire performance. People will often visit specialist retailers such as Jessops to get advice on camera models and pricing before heading online to grab a bargain from websites like Pixmania and
"When it comes to compacts, almost everyone who wants a digital camera probably has one now and compact users don't feel the need to upgrade as much as the enthusiasts who buy SLRs," says Mark Sparrow of Digital Camera magazine.
As part of a drive to increase profitability, Jessops says it has closed 81 stores and got rid of £16.8 million worth of clearance stock to put its books in order. It will now be specialising on more advanced (and more profitable) digital SLR cameras.
"Digital SLRs are selling well but internet stores are aggressively cutting prices. Jessops clearly has very high overheads with all its bricks and mortar stores and staff to support. It may well be that camera buyers are getting their advice and hands-on experience with Jessops but are choosing to buy elsewhere."
Also, prices for point-and-shoot compact digital cameras have tumbled in the past few years, while cameraphones are becoming increasingly sophisticated. This year's high-end cameraphones offerings have included the likes of the LG KU990 Viewty, Samsung SGH-G600, Nokia N95 and the Sony Ericsson K850i, all of which sport 5-megapixel resolution and basic features on par with most lower-end digital cameras.
And then there's printing. Whereas once you'd have spent £7 on a pack of APS prints, now digital means you spend absolutely zero - or most likely print things out at home.
A Jessops spokesperson told The Guardian the camera market was "challenging". Even in the run-up to Christmas, Jessops' sales are down 7.3 per cent on last year, it said.