Lifetouch to close Chattanooga operations, with shutdown of Bonny Oaks facility to cost 150 jobs

A sign outside of Lifetouch's Chattanooga location on Preservation Drive in Bonny Oaks Industrial Park can be seen in this April 1, 2019 photo. / Staff photo by Kim Sebring

California-based Shutterfly Inc. on Tuesday unveiled plans to close the Chattanooga operations of Lifetouch, which eight years ago bought Chattanooga's iconic Olan Mills photography business.

Lifetouch, one of the nation's biggest school portrait photography companies, currently has about 150 full-time employees at its Chattanooga operation located on Preservation Drive in Bonny Oaks Industrial Park, said Shutterfly spokeswoman Sondra Harding.

Online retailer Shutterfly, which creates photo books and personalized photo cards and stationery, plans to close its Chattanooga facility in the second half of this year, according to the company.

Harding said Lifetouch also has 61 seasonal employees on its Chattanooga roster though they're not active at this time.

In April 2018, Shutterfly paid $825 million for Minnesota-based Lifetouch.

Olan Mills was one of Chattanooga's most recognizable companies when it was purchased by privately held Lifetouch in late 2011 for an undisclosed amount.

At the time, Lifetouch, then the nation's largest employee-owned photography company, said it would hire nearly all of Olan Mills' 4,000 employees nationally, including 475 in Chattanooga.

Olan Mills II, who was the Chattanooga company's longtime chairman and chief executive and the son of its founder, said at the time that combining the two businesses was a logical step. In 1999, Olan Mills had sold its schools unit to Lifetouch, which had operated in Cleveland, Tenn.

"Our companies share a culture of quality and service in environments that place a high value on our employees," Mills said at the time.

But in 2012, Lifetouch said it would shut down two Olan Mills production facilities in the city and cut 383 jobs.

"Work at those plants will go to other facilities across the country," said a Lifetouch spokesman then.

Olan Mills was started in 1932 by real estate salesman Olan Mills Sr. and his wife, Mary. In the early years, the senior Mills was the photographer while his wife did artwork on the finished prints, according the company.

Olan Mills II, who became the company's chairman in the early 1970s, recalled in a 1990 interview with The Associated Press that his father, who died in 1978, was "a charismatic, entrepreneurial leader."

"His greatest joy was being with a group of people," he said.

But Olan Mills as a company had become smaller over the years as it faced competition and the digital photography age. Some 25 years ago, it was estimated in the AP story that all the film used each year by the company would stretch end to end from Chattanooga to Phoenix.

Shutterfly also reported Tuesday that its chief executive was leaving at the end of August and its board has formed a committee to review its future. The company said Shutterfly has been approached by a third party about a potential acquisition and subsequently engaged in talks with additional third parties, but no proposals have been received.

Shutterfly said it earned $177 million, or $5.19 a share, in its latest quarter compared to $112 million a year ago. Revenue hit $950 million, up from $594 million a year ago, the company reported.

Contact Mike Pare at [email protected] or 423-757-6318. Follow him on Twitter @MikePareTFP.