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Loot Crate is going bankrupt... but does this mean game over?
It’s kind of hard to believe that anything could ever take down the ultimate geek subscription box, but Loot Crate is officially going under. Cue anguished sighs heard round the internet.
The company, which has been curating (mostly) genre-themed boxes of collectibles and swag since 2012 — and still has around 250,000 subscribers — has just announced that it is filing for Chapter 11 bankruptcy. Loot Crate has been laying off workers and plans to sell its assets to the highest bidder within the next 45 days. It also promises to fulfill all pending orders during that time period. But that might be an issue when it still has $20 million in outstanding orders to go.
"We have worked diligently to overcome challenges …we are very pleased with our progress from an operational efficiency standpoint, however, the company still faces liquidity issues," Loot Crate's CEO Chris Davis said in a press release. "After careful review of a wide range of available options, management determined that a sale of the Company is in the best interests of all parties, including our valued Looters (customers) and employees."
In the meantime, Loot Crate and its remaining 60 full-time employees will stay afloat wit a $10 million bankruptcy loan from Money Chest LLC, one of its investors. This isn’t the first time the company has run into financial problems, having defaulted on a $21 million loan just two years ago.
Loot Crate may have grown into a behemoth too fast. It started out with just one geeky subscription box whose theme changed every month, but soon started adding more loot, such as box upgrades, limited-edition themes like Ghostbusters and Star Trek (above), and eventually (in addition to its regular box) separate subscriptions for gamers, comic enthusiasts, and just about everything else in pop culture.
Most Looters still come from the realm of geekdom. There have been Loot Crate booths and exclusives at San Diego Comic Con, New York Comic Con, and numerous other cons for years now. Even Robert Downey Jr. invested in this company. That’s like saying Stark Industries approved.
So does this really mean game over?
"This transaction represents good news for our employees, our customers, and our other constituents,” said Davis. “It will provide Loot Crate with greater access to the financial resources necessary to continue to prosper and grow. By utilizing the Chapter 11 process, we are able to ensure an expedited and orderly transition."