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The business, which had been operating with five staff on the corner of George and St Andrew Sts, Dunedin, for the past 12 years, became a casualty of the economic downturn and was placed in liquidation in July this year.
The Photo Warehouse bought the business recently and began trading as Jonathans Photo Warehouse on Monday.
Photo Warehouse southern regional manager Howard Grazier said the company had stores in Auckland, Wellington and Christchurch, but until recently had no intention of expanding into Dunedin.
"I've known Jonathan [Kemp] for 15 years and he's a really nice guy.
"I never wanted to compete with him, but now an opportunity has arisen and it's the right time to expand into Dunedin."
Mr Grazier said the staff were retained and former owner Mr Kemp became the store manager because of their extensive knowledge of cameras and photography.
"People like a specialty store that they can go into and get expert advice. That's what we do well."
Mr Kemp was delighted with the sale.
To keep all the staff in jobs while improving the service for Dunedin customers was the best possible outcome, he said.