Shutters close on debt-hit Polaroid

Polaroid, which took a trip to the chemist out of the photographic process, filed for bankruptcy yesterday, crushed by debt of $1bn and the inexorable rise of instant, filmless digital cameras.

The former high-flying US company, which had a turnover of $2.31bn in 1994, slumped under the weight of debts as its sales collapsed in the face of newer technologies that made redundant its main money-spinner, the films on which the pictures were developed.

The Polaroid process was conceived by an American inventor, Edwin Herbert Land, in 1943, after his three-year-old daughter, asked why she couldn't see the picture he had just taken of her right away. Within an hour he had conceived the system that would be needed. In 1947 he finally demonstrated a product that "put the technology of a darkroom between two sheets of paper".

That led to the Polaroid Land camera, and the formation of a company which in 1972 was picked by analysts as one of the "Nifty Fifty", a group of stocks that investors could supposedly buy and hold forever. They would never lose their value because they owned technologies that marked them out from the rest of the market. During the late Seventies, the Polaroid OneStep camera was the best-selling of any type.

But Polaroid was too slow to move in the advance of digital cameras, whose sales now outstrip film cameras by value. As demand for instant photography fell in the mid-Nineties with the advent one-hour developing on the high street, the company suffered. Sales rose in 1999 with two new cameras aimed at children and young adults, but fell again by a quarter in 2000. In the first half of this year its total sales were just $664m.

Yesterday the company was forced to bankruptcy courts, with $1.81bn in assets and $948m in debts. Workers on its pension plan were told their health and life benefits packages cease immediately.

Mr Land died in 1991.