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Businesses Toys Transportation News

Smartphones, Tablets and EBay Send SkyMall To Chapter 11 65

Posted by timothy from the not-to-mention-deal-extreme-and-amazon dept.
alphadogg writes SkyMall, the quirky airline catalog, looks as though it may be grounded before long. Parent company Xhibit has filed for Chapter 11 bankruptcy protection and seeks to sell its assets. In an SEC filing, Xhibit explains that it has fallen victim to an "intensely competitive" direct marketing retail industry that now includes the likes of eBay and Amazon.com. Smartphones and tablets are largely to blame for SkyMall's downfall, according to the SEC filing. "Historically, the SkyMall catalog was the sole in-flight option for potential purchasers of products to review while traveling. With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog."
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Smartphones, Tablets and EBay Send SkyMall To Chapter 11 More

Smartphones, Tablets and EBay Send SkyMall To Chapter 11

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  • Or: (Score:5, Informative)

    by rmdingler ( 1955220 ) on Saturday January 24, 2015 @08:54AM (#48892287) Journal
    The boom of internet shopping allowed even the uninformed to discover just what a ripoff most of those items were.

    • Re:Or: (Score:5, Interesting)

      by fermion ( 181285 ) on Saturday January 24, 2015 @10:46AM (#48892777) Homepage Journal
      This seems to be the narrative that the parent company, Xhibit Corp,is pushing. Perhaps blaming 'the market' will help it in bankruptcy with creditors, and protect the owners from personal liability.

      What is not being widely reported is that Xhibit Corp sold the customer loyalty fulfillment part of the business last year for around $20 million. This was the unit that apparently generated the vast majority of the revenue and probably all the profit. Why would a firm who expected to stay solvent sell of the unit that generated most of the revenue, a unit with guaranteed sales?

      It really seems like a scam to create liquidity of the profitable assets and then screw the creditors. The fact that the business was a failing was probably known at the time of the sale. For instance, it was probably known that Southwest Air was going to stop carrying the catalog.

      • Re: (Score:1)

        by Mr Z ( 6791 )

        Isn't that a common pattern, though? Spin off the few profit centers that are actually profitable, and then fold the rest of the business?

      • What is not being widely reported is that Xhibit Corp sold the customer loyalty fulfillment part of the business last year for around $20 million. This was the unit that apparently generated the vast majority of the revenue and probably all the profit. Why would a firm who expected to stay solvent sell of the unit that generated most of the revenue, a unit with guaranteed sales?

        It really seems like a scam to create liquidity of the profitable assets and then screw the creditors.

        Hmm. Where have I heard *that* countless times before?

        (Opens Wikipedia article [wikipedia.org] on the company, does text search for "private equity"...)

        In 2012, SkyMall was purchased by Najafi Companies, the largest private equity firm in Arizona. In January 2015 the company filed for Chapter 11 bankruptcy protection.

        What a surprise.

  • We put a company in our company (Score:2, Funny)

    by Anonymous Coward

    We put a company in our company, so that we can bankrupt while we bankrupt.

  • Make Yourself Known (Score:4, Interesting)

    by Mr D from 63 ( 3395377 ) on Saturday January 24, 2015 @09:01AM (#48892325)
    OK, I've always wondered who actually has ever bought anything from Skymall. I mean, we've all looked, but who has actually done the deed?

    Anyone? Don't be afraid to admit it... come out of the shadows and confess.

    • I actually did. Granted, it was once, and 10 years ago, and I price checked when I got home. It was actually something useful that was difficult to find elsewhere at the time-- a curved shower rod.

      I will miss sky mall. It's goofy stuff helped inspire a bit of creativity or at least make me smile on a flight. Just can't see how it would be possible for them to have an attachment rate of even 0.02%, two orders of magnitude than conventional advertising.

    • OK, I've always wondered who actually has ever bought anything from Skymall. I mean, we've all looked, but who has actually done the deed?

      Does Skymall include the tax-free liquor? If so, yes, depending on the country I was going to.

      Otherwise, no. At least not when I was flying into California. Even with the $3.30-$6.60 tax surcharge per wine gallon, I can still get my liquor much cheaper at Costco than I can get aboard the plane, or at the tax-free duty shop.

    • I bought something there this last Christmas. The item (a variable height desk) was the same price no matter where I looked. It's the only thing I've ever bought there. It was fun to look in the catalog for the unusual items; it was always good for at least 1 chuckle for some goofy item and ususally several.

    • They had a lot of interesting items, for example their math clock [edn.com]. I kept seeing items that I would have bought if they were half the price. But they weren't, so I didn't.

  • Kind of (Score:4, Insightful)

    by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Saturday January 24, 2015 @09:18AM (#48892369) Homepage Journal

    It has nothing whatsoever to do with people shopping on their tablets. It has to do with having something to do, so you don't open the SkyMall catalog. I never ever bought anything out of there anyway because everything was so overpriced, but a lot of people are dumb enough. If they don't even see the catalog, though, their stupidity never generates a sale.

    • I never ever bought anything out of there anyway because everything was so overpriced, but a lot of people are dumb enough

      Dumb enough or just don't care? Remember flying used to be a rich person's game. Many don't care if that parker pen costs twice as much from that catalog.

  • I used to read it regularly when flying. This was primarily because reading skymall was free, while buying a magazine at the airport was expensive (and I inevitably would forget to pick one up some place less expensive before going to the airport). While it wasn't exactly bursting at the seams with good deals, there were some things selling at reasonable prices in there. The more novel feature of it was that it was a pretty random selection of products; one page might be garden supplies while the next might be pool toys then power tools then kitchen accessories.

    Now did I ever buy anything from it? No. So I am in part responsible for its demise as well.

    I'm more concerned about the possibility of this becoming an excuse for the airlines to raise fares yet again. If skymall paid the airlines even $3 per seat to have their catalog in every seat back, the airlines will tell us that losing that contribution will increase the cost of every ticket by at least $20 (expect this to show up as an a la carte fee along with pillows, blankets, snacks, and seat belts).

    • I'm more concerned about the possibility of this becoming an excuse for the airlines to raise fares yet again.

      This really doesn't make much sense. Looking at any kind of macro trend air travel has never been this cheap.

    • The airlines might actually be happy they don't have to deal with it any more. After all, there's the logistics of getting it into every seat, the time wasted picking up copies that have been dumped on the floor, the extra weight to carry around ... my guess is that this magazine was there only because of inertia.
      • That's got to be a large part of it; they're a waste of space. Imagine a stack of hundreds of those things, turned on their sides. They would occupy a whole seat. With Skymall gone they can compress your knees further into the back of the guy in front of you and cram in an extra row of pig crates.

  • Sure (Score:2)

    by msobkow ( 48369 )

    It had nothing to do with a melange of overpriced and useless crap in the pages...

  • I used to flip through SkyMall just so I could laugh (or cry) at all the stupid things people invented. I couldn't fathom how someone could invent a speaker in the shape of a rock, and then sell it for 3x the price of a normal outdoor speaker. Then there were the pet accessories, tie racks, and a host of other useless crap.

    I guess I wasn't alone - people didn't buy enough of it to keep the company alive.

    Now I feel better as an inventor of things that can actually be useful.

    • Re: (Score:1)

      by Mr Z ( 6791 )

      My favorite things to laugh at were:

      Well, among everything else in there. It seems that SkyMall has moved on from these favorites. But, they were reliable point-and-laugh items when I was flying regularly a few years ago.

  • Upon idly flipping through the inflight magazine, she asks, "So when do we get to the SkyMall?"

  • Atlantic Article (Score:2, Informative)

    by Anonymous Coward

    It's a couple years old now, but there was this interesting article in the Atlantic [theatlantic.com] about the connection between SkyMall and the company that acquired it, Xhibit. It points out some very suspicious details related to their financial situations.

  • entertaining part of air travel from us!
  • Most of the comments here assume people were ordering stuff on SkyMall for themselves. My assumption was always that, like holiday catalogues, the target audience was a gift shopper. Someone older who wants to order a nice gift for someone but can't think of anything their giftee actually needs or doesn't already have. Those shoppers have a lot more choices now.

  • In two very stressful situations our reptilian brains were exposed to, the only forms of entertainment we were allowed were the mind-numbing airline magazine or skymall. Now that we can use electronic devices in those situations, skymall becomes pointless. Some foreign airlines still require turning off electronic devices during take-off and landing. Those could have make use of skymall but skymall was a lazy business. They didn't expand internationally and didn't tap into the new medium. (people could have

  • But there's always SkyMaul! (Score:3)

    by dskoll ( 99328 ) on Saturday January 24, 2015 @08:36PM (#48895985) Homepage

    SkyMaul [skymaul.com] has more interesting stuff, and only slightly more ridiculous.

  • When I want to shop for overpriced stuff I didn't know I needed, what search term would I possibly use on ebay? That's where the logic falls apart. Skymall is failing because their products are stupid and rich people, their customers, don't take their brand name seriously.

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