Loot Crate was once a staple of pop culture, filling up Instagram feeds and YouTube with unboxings, reviews, and spoilers. Sadly, the once dominant monthly subscription box is filing for bankruptcy, and recently laid off dozens of warehouse workers. Loot Crate is still planning to ship all remaining boxes to paying customers, though that even seems like a stretch as in some cases, customers haven't received their merchandise in nearly three months.
As stated in a press release distributed overnight, Loot Crate is in the process of filing for Chapter 11 bankruptcy. LC has had financial difficulties as of late, such as defaulting on a $21 million loan from 2017. Eventually, LC hopes to sell the company. Recently, roughly 150 employees were laid off following a warehouse closure and transfer to a third-party logistics company, 50 employees were released last week, and now there are only 60 full-time workers still remaining.
"There's currently no plan to open a new warehouse, as the 3rd party logistics company and their warehouse afford us the opportunity to work out of a singular warehouse location for our primary shipping and receiving needs," a Loot Crate spokesman said to the LA Business Journal.
Loot Crate hasn't shipped goods tied to $20 million in sales, and the company owes more than $30 million in trade debt. It’s also behind on more than $5.87 million in sales taxes.
For those unfamiliar, a Chapter 11 bankruptcy generally means that a company plans to continue business as usual in the future, even with current woes, in hopes that all debt and asset concerns are addressed. This is different from Chapter 7 - which Mad Catz temporarily faced a few years ago - where a company is completely closed. Atari also filed for Chapter 11 bankruptcy, though it ultimately returned.
Loot Crate's CEO Chris Davis said, "Daily operations will continue as usual, unique and exciting fan items will be purchased, crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing. Our employees will continue to be paid as usual during this transaction."
As of writing, it's unsure to as of what the future holds for what was once called one of the fastest-growing companies in America. It all depends on the buyer - if there is one - to ultimately decide what the next steps are.