Clearer picture of Polaroid's future may take a while to develop

Polaroid needs to reconnect with its "history of innovation in photography," says the chief executive of Patriarch Partners, the private equity firm that bought the company yesterday for $59.1 million.

That could be a tall order. After all, Polaroid has already been pushed to the brink once because it couldn't keep up with the latest technology. The company declared bankruptcy in 2001 as the rising popularity -- and falling price -- of digital photography crushed demand for its iconic instant cameras. Now, bankrupt again thanks to legal problems at its parent company, it must attempt another comeback.

Sales of Polaroid's iconic instant cameras and film powered the company for much of its history, pushing its revenue as high as nearly $3 billion in 1991. But digital photography in the late 1990s destroyed the instant-camera business. After its first bankruptcy, holding company Petters Group Worldwide bought Polaroid in 2005 for $426 million.

Polaroid then shifted its strategy to focus on DVD players, televisions, printers and digital cameras. It announced it was getting out the instant photography business last year.

But despite $1 billion in revenue and $400 million in profit, according to Bloomberg News, Polaroid said its "financial condition was compromised by . . . apparent fraudulent acts" allegedly committed by Petters' CEO. It filed for bankruptcy again last December.

Yesterday's sale to New York-based private equity firm Patriarch Partners marks a new start for Polaroid, its new owners say. "We intend to continue rebuilding the brand of this great American company on a worldwide scale and to re-establish Polaroid as a globally acknowledged innovator," Patriarch CEO Lynn Tilton said in a statement.

Patriarch specializes in turning around troubled companies. But a clear picture of Polaroid's resurrection as an innovator in the photography business will probably take a while to develop.
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