Late developer
Cameramaker Polaroid has found its digital niche
Scott Hardy exhales loudly as he takes in the full chaos of Polaroid’s last decade: the company’s former owner Tom Petters is serving a 50-year prison sentence for masterminding one of America’s biggest Ponzi schemes; the business has changed hands three times and been through six different chief executives. Now, it faces a battle to survive in the age of the smartphone camera, having emerged from bankruptcy twice in as many decades.
“It has been crazy, yeah,” Hardy exclaims in a thick drawl that matches his preppy American looks. Hardy insists that the company has a proper future after refocusing the business around the licensing of the famous Polaroid brand, which has helped it to enjoy a nostalgia-driven renaissance.
Polaroid was once something of a corporate giant. At its peak in 1991 sales neared $3bn (£2.2bn) but the sharp rise and popularity of digital cameras inflicted some big wounds. The failure to anticipate just how digital cameras would decimate the market for instant models led Polaroid to file for bankruptcy for the first time in 2001.
Hardy, 45, believes the strategy is paying off. Last year, sales grew by 15pc to around $600m (£456bn). This year, that figure is expected to hit $700m after launch of its licensed camera, the Pop, which will print digital original-sized white-bordered Polaroid prints. The updated model has a “selfie” button, a non-negotiable function in this era of narcissism.
“People now have this obsessive compulsive disorder to capture everything that happens around them. My kids are the worst for it,” Hardy says. “The sheer quantity of photographs taken each year is more than all of the photographs that have been taken in history. It’s photo neurosis,” he says dissolving into laughter.
But how can Polaroid survive when the rise of Instagram and Snapchat have transformed the way photos are taken and traded and hardly anyone prints their smartphone shots?
“We’re different to Snapchat because we’re not about near constant snapping. When you take a Polaroid photograph and give it to someone, they don’t throw it away, they look after it,” Hardy reasons.
“There’s a ‘tangibleness’ to the photograph that people appreciate,” he adds. “We would say a photograph isn’t a photograph until you print it, otherwise it’s just pixels and data.”
Hardy gives a glimpse into how he uses his children as guinea pigs by revealing that his eldest daughter takes a series of Polaroid pictures, presents them artistically and then uses her smartphone to take an image that’s uploaded to Instagram. “She gets hundreds of likes,” he says proudly.
The shift between the digital and analogue photographic world is brought into sharp focus by Polaroid’s latest owners. The company was bought in May for an undisclosed amount by Polish energy industry tycoon Wiacezlaw “Slava” Smolokowski. The deal came about after his son convinced him of the merits of the brand after running “The Impossible Project” which restores traditional Polaroid ink film and refurbishes vintage Polaroid cameras.
In 2004, Polaroid stopped producing the negatives needed to create its instant film, believing it had stockpiled enough for the next decade and shut the last film factory at Enschede, in the Netherlands four years later.
The decision to close the factory coincided with the dramatic unravelling of Polaroid’s owner, Petters. Just months before the world learnt about Bernie Madoff, Petters was convicted for a $3.6bn Ponzi fraud after conning investors and lenders with false paperwork and assets that failed to materialise.
Hardy, who was president of Polaroid at the time worked hard to protect the camera business from Petters’ creditors, who were looking to seize any assets under his sprawling
umbrella organisation, Petters Group Worldwide. Polaroid was swiftly put through an American bankruptcy process, enabling it to be sold free of any liabilities.
During the chaos, wasn’t Hardy tempted to cut his ties with the tarnished business and find a less challenging job somewhere else?
“It was a crazy time, our prior owner hadn’t been convicted but had been, shockingly, arrested and we were waiting for the trial. I knew that we had to keep operating because we had families that relied on Polaroid for their incomes,” he says. “I wanted to steer the ship to a better place because jumping ship at that point, when everything was on fire, would have been almost cowardly.”
What followed was an aggressive sale that led to a rapid-fire live bidding process in a US federal bankruptcy court. In the end, distressed investors Gordon Brothers and Hilco snapped the company up for just $89m and Polaroid was quickly turned into an intellectual property business that licensed its technology and branding.
The company now licenses its brand name to companies that manufacture tablets, televisions and even sells Polaroid branded T-shirts in fashionable stores such as Urban Outfitters. It has also partnered with a licensee, to make Polaroid-branded cameras.
Profitability has been restored and sales are growing after the launch of a camera and printer which allowed smartphone pictures to be printed with miniature white-borders.
Is Hardy wary that Polaroid will become just the plaything of a billionaire’s son?
Hardy shakes his head: “They are wholeheartedly committed into making Polaroid the iconic company it once was.”
Since being founded in 1937 by Edwin Land, Polaroid has survived many threats, but the younger generation is now driving growth.
“When we relaunched Polaroid we were focusing on rebuilding the brand but then something happened”, Hardy says. “The instant camera market which had been in steep decline suddenly rebounded and the people taking Polaroid pictures weren’t grandma and grandad, they were young people suddenly infatuated with this hipster, retro thing.
“The brand could have been dormant and gone dead. Instead we’ve built it into a growing thriving brand,” he says. “Polaroid is back in a big way.”