SkyMall Files for Chapter 11

The sky has fallen.

SkyMall, the in-flight catalog that became a direct-sales giant selling jewelry and exotic gizmos to captive airline passengers, filed for Chapter 11 on Jan. 23.

Owner Xhibit Corp. said it’s hopeful a buyer can keep the “iconic” 25-year-old brand alive. Its core SkyMall business generated $33 million in revenue in 2013, but only $15.8 million in the first nine months of 2014, according to court declaration by acting CEO Scott Wiley included in a Jan. 23 SEC filing.

Wiley said the once high-flying company was felled by technology—specifically, handheld devices that gave bored travelers something to do besides thumb through the items in the seatback.

“Historically, the SkyMall catalog was the sole in-flight option for potential purchasers of products to review while traveling,” the documents said. “With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog.”

Delta and Southwest Airlines both terminated their SkyMall contracts in the last year, due to the cost of printing the catalog and their own financial woes. The company now deems its traditional in-flight model “no longer viable or sustainable” and had hoped to carry on as an e-commerce company. But in December the company sustained a liquidity crisis, and on Jan. 16, it suspended its retail catalog operation and laid off 47 employees, mostly in the company’s call centers. 

If the company is not sold as a going concern, it hopes for an orderly wind down of its affairs, the papers said.

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JCK News Director