It might be time to buy those "iPhone Binoculars" from SkyMall's in-flight catalog before it's too late. The magazine's parent company Xhibit Corp. announced Friday it had filed for Chapter 11 bankruptcy protection the day before. The company intends to sell its online retail arm and blamed in-flight Internet access for contributing to its downfall. Fewer people are browsing the company’s magazines as they surf the Internet instead.
“We are extremely disappointed in this result and are hopeful that SkyMall and the iconic ‘SkyMall’ brand find a home to continue to operate as SkyMall has for the last 25 years,” said Scott Wiley, Xhibit's chief financial officer and acting CEO. He said that while a buyer could continue the publication, there is a risk that the catalog could cease to exist. The publishing company is working with the bankruptcy court to sell its assets, according to papers filed with the U.S. Bankruptcy Court in Phoenix.
“With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog,” Wiley said in the court papers, according to the Wall Street Journal. He also said that a “crowded, rapidly evolving and intensely competitive” retail environment contributed to the company’s financial woes, listing Amazon and eBay as SkyMall’s direct competitors with greater resources and more customers.
SkyMall LLC doesn’t have a ready buyer yet, but it will begin auctioning off its assets around March 24, Wiley said. The sale is expected to close in April. The company will then scale down its operations going forward.
The company listed as much as $50 million in liabilities and as much as $10 million in assets in its bankruptcy-protection filings. The court filings showed that SkyMall generated $33.7 million of revenue in 2013, according to Bloomberg. SkyMall tried to raise capital in late 2014 to keep the venture afloat, but failed. It suspended retail catalog operations on Jan. 16 and laid off 47 employees, court filings showed.
The Phoenix-based publication, with a history of 25 years, reached 650 million travelers annually, according to the company’s website. The distributor sells more than 30,000 products from perfumes to portable pet staircases, and is known in popular culture for selling absurd items, spawning many parodies of the catalog.