The company behind SkyMall is declaring bankruptcy and seeking to sell the iconic in-flight catalogue.
Xhibit Corp., which owned SkyMall as well as a series of other subsidiaries, filed for Chapter 11 bankruptcy, according to documents released on Friday.
The company suspended its retail catalogue operations on Jan. 16 and laid off 47 employees, according to the filing. The company owes creditors about $12 million.
The Phoenix-based company had sold an assortment of wares through the its magazine-style catalogue that could be found in the seatback of almost every airline flight in the U.S. SkyMall was founded in 1989, and its magazine is available to about 650 million air travelers per year.
SkyMall will go up for sale, as long as a bankruptcy court approves the company's request.
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, CFO and acting CEO of Xhibit, in a press release.
If another company buys SkyMall, it could continue the existing business. However, Xhibit noted in its filing that there is a chance that the catalogue will cease to exist.
"If it appears at any point during the marketing and sale process that continued operation of the scaled-down SkyMall business operations is no longer feasible, the Debtors will take the steps necessary to terminate remaining operations," the company wrote.
SkyMall had revenue of about $33.7 million in 2013 and $15.8 million in the first nine months of 2014, according to the filing.
The company listed a variety of factors that have begun to hurt its business including e-commerce companies Amazon and eBay. SkyMall also pointed to people using smartphones and tablets on flights, in-flight Internet access, and price competition.
"With the increased use of electronic devices on planes, fewer people browsed the SkyMall inflight catalog. The substantial increase in the number of air carriers which provide internet access, and the U.S. Federal Aviation Administrations recent decision to allow the use of electronic devices during take-off and landing, resulted in additional competition from e-commerce retailers and additional competition for the attention of passengers, all of which further negatively impacted SkyMalls catalog sales," the company wrote in the filing.
The filing also notes that SkyMall had attempted to lessen its reliance on in-flight sales and looked to attract customers online. This effort, which began in early 2014, was not fully executed due to a lack of money for investment in the shift, according to the filing.
SkyMall unsuccessfully sought to raise money in late 2014 in an attempt to keep the business solvent.
"SkyMall was unable to attract the necessary working capital on terms or in amounts sufficient to meaningfully address its liquidity needs," the company wrote in the filing.
This story is developing.
Source: http://mashable.com/2015/01/23/skymall-declare-bankruptcy/
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