Publishers Clearing House Files for Bankruptcy

Publishers Clearing House, the company that sold many boomers the dream of becoming millionaires with just a few magazine subscriptions, has announced that it has filed for bankruptcy.

The Wall Street Journal reports that the company filed for Chapter 11 bankruptcy protection to restructure its balance sheet and reduce expenses from its e-commerce and historical direct mail businesses.

The organization’s well-known sweepstakes “will continue to be a cornerstone of our experiences, and we intend to continue offering free-to-play entertainment and awarding prizes in the ordinary course of business,” said Andy Goldberg, the company’s chief executive, in a statement to the outlet.

According to court documents submitted to the U.S. Bankruptcy Court in New York, the Publishers Clearing House sweepstakes still draw millions of participants despite the times, which enables the business to make money by selling digital advertising through its web and app-based platforms.

As a “carpool for publishers,” the company’s original business model involved requesting individuals to subscribe to multiple periodicals with a single direct mail offer. Publishers Clearing House would receive a percentage on the sale if a customer decided to sign up for its newsletter. Later, the company used its experience in direct mail to offer books, collectibles, and other goods.

Further, per its bankruptcy filing, Publishers Clearing House employs 105 people and generates over $38 million in gross revenue annually. The business has $11.7 million in total assets and $65.7 million in total liabilities, which includes over 757,000 unclaimed checks totaling over $11.5 million.

Publishers Clearing House Is the Latest Company To File for Bankruptcy

Though Publishers Clearing House is the latest company to file for bankruptcy protection, a filing isn’t necessarily a death knell for a company, as Big Lots has proven.

Earlier this week, Big Lots announced that it is reopening nine sites in six states under new ownership following a bankruptcy case that resulted in the closure of roughly 1,000 stores.

USA Today reported that the nine locations reopened on April 10. The locations are as follows:

• 1342 Indian Mound Drive, Mount Sterling, Kentucky
• 755 Veterans Memorial Blvd., Metairie, Lousiana
• 2605 W. Main St., Tupelo, Mississippi
• 5778 Hwy 80 E., Pearl, Mississippi
• 1432 E. Dixie Drive, Asheboro, North Carolina
• 1041 S. Riverside Drive, Clarksville, Tennessee
• 744 Nashville Pike, Gallatin, Tennessee
• 220 Dickson Plaza Drive, Dickson, Tennessee
• 2911 Hershberger Road NW, Roanoke, Virvinia

The company will be reopening 55 additional stores on May 1, with more to come through June in two additional rounds of store openings.