Kodak (Con't)

[P3D Eric Goldstein <egoldste@xxxxxx>]

Sunday September 28 8:30 AM EDT 

Kodak Cuts Some Film Prices

By Jeffrey Benkoe 

NEW YORK (Reuter) - Eastman Kodak Co. is giving retailers discounts on
its film, the company said, as it struggles to regain market share from
Fuji Photo Film Co. and boost its bottom line. 

A Kodak spokesman said Friday the discounts are short-term "promotional
incentives" in preparation for the Christmas-time roll out of a new line
of film called Family of Gold. 

The promotions have been in place for about a month, according to a
retailing industry executive who spoke on condition of anonymity. 

Kodak's acknowledgement of the discounts comes one day after it
announced that it will lay off 200 mid- and low-level managers and 10
percent of its sales and administrative staff and a week after it warned
that its profit won't meet Wall Street's expectations. 

"In addition to routine promotions and special promotions when we enter
the holiday selling season, we're at the point now where we're
transitioning into new Family of Gold films," the spokesman said. "We're
offering some promotional incentives on the inventory of earlier
products as it's being replaced with the newer product." 

The spokesman declined to provide details on the pricing promotion. 

The promotion "will have a very short-term effect (on prices), not
long-term impact," the spokesman said, adding that Kodak would seek
price increases on the new products. 

The allowances have led to cuts of 10 percent to 20 percent in retail
prices, according to one retail industry executive. 

Kodak has been under preessure to lower its film prices to counter moves
by competitors, especially Fuji, that have offered film at discounts of
up to 35 percent. 

Alex Henderson, an analyst at Prudential Securities, called the
temporary price cuts "significant." 

"That's how you cut prices," he said. "You cut the list price by
discounts and promotional activities." 

Analysts called the developments a good sign. 

Kodak's stock gained $1.56 at closed at $64 on the New York Stock
Exchange. 

But Prudential's Henderson warned that a price cut, while important in
protecting market share, will slice into profits. He estimated that a 10
percent price reduction could cut operating profit by $300 million to
$400 million for the year and suggested that the run-up in the stock
price this week is unwarranted.


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