Publishers Clearing House (PCH), a decades-old marketing and sweepstakes company, has filed for Chapter 11 bankruptcy protection amid financial strain. The company aims to transition to a “pure digital advertising” model, where it will continue to offer free-to-play entertainment and prizes.
In an announcement on Wednesday, PCH stated that the bankruptcy process would help it “finalize a shift away” from its legacy business of direct-mail, retail merchandise, and magazine subscriptions. The company is seeking funding through debtor-in-possession financing from Prestige Capital to support operations during its restructuring.
Despite the financial challenges, PCH plans to continue operating in a “business-as-usual manner” throughout the bankruptcy process, with the Prize Patrol team delivering awards across the US. The company’s roots date back to 1953, and it has awarded over half a billion dollars in prizes to date.
PCH’s struggles are attributed to rising operational costs, changing consumer habits, and increased competition from major retailers like Walmart and Amazon. The company has faced scrutiny from regulators and incurred costly legal settlements, including a $18.5 million payment to resolve FTC allegations in 2018.
As of March, PCH had total assets of nearly $11.7 million and total liabilities of about $65.7 million. The company currently employs 105 people and generates an annual gross revenue of approximately $38 million.
Source: https://finance.yahoo.com/news/publishers-clearing-house-known-prize-194544259.html