Support NeoGAF

[zeorhymer]

LA Times

Subscription box startup Loot Crate Inc. filed for Chapter 11 bankruptcy with plans to sell itself after running low on cash.

The Los Angeles company ships curated fan boxes filled with “geek and gamer products” to subscribers each month, Chief Restructuring Officer Stuart Kaufman said in a court declaration filed in Wilmington, Del. The contents include figurines, shirts, gear, gadgets and limited-edition collectibles tied to science fiction, gaming, sports and pop culture. They’re shipped to more than 250,000 recurring subscribers, court papers show.

But the company is now in dire financial straits. Its credit-card processor is withholding customer billings, Loot Crate hasn’t shipped goods tied to $20 million in sales, and the company owes more than $30 million in trade debt, Kaufman said. It’s also behind on more than $5.87 million in sales taxes.

I've known people who bought some boxes and got a few nifty items. I never thought it was worth the stuff.

 

[NickFire]

250k subscribers and they can't make it profitable? WTF

 

[Trojita]

Loot Crate hasn’t shipped goods tied to $20 million in sales, and the company owes more than $30 million in trade debt, Kaufman said. It’s also behind on more than $5.87 million in sales taxes.

Wow, you really had to fuck up to end up like that. This is with the fact that the shit loot crates had overproduced merchandise that wasn't worth the full price. What were they blowing all the money on?

 

[48086]

Mailing people plastic junk every month isn't a viable business? Huh, shocking.

 

[BlackOlivesMatter]

Literally the first thing I thought of.

Very Cool....

 

[Danny Dudekisser]

The entire business was built around overpriced tchotchkes. What did you think was going to happen?

 

[NickFire]

The entire business was built around overpriced tchotchkes. What did you think was going to happen?

With 250k subscribers I'd expect them to leverage their purchasing power to sell overpriced toys at a tidy profit. But somehow they screwed that up.

 

[Kadve]

Can Funko Pop be next please?

 

[DTU]

Gah fuck. I hope they honor the 5 years of Lootcrate that I prepurchased for my best friend and mentor, Mr. Gadwell.

 

[Newly Vacant]

I subscribed to Loot Crate for a few months, but nothing was worth the price. It was $35 a month, and there's nothing that felt remotely close to being "worth it." I think the only thing I have around from those 4 or 5 boxes is a couple of magnets on my refrigerator. I think the idea of getting new geeky, or videogame-themed items every month is cool, the execution wasn't. Or maybe, the price for well-made items needed to be higher than the market would pay?

 

[newtypepilot]

Loot Crate became the nation's fastest-growing start-up, then it laid off over a quarter of its staff

Loot Crate Chief Executive Chris Davis now says he may have done what seemed unthinkable: grown the company too fast.

www.latimes.com

provides a more detailed story why they failed.

Expanded too fast on niche crates without much analysis beforehand thus thinning their own margins. Just lots of bad management decisions.

250k subscribers is actually not that impressive when you consider they've been around since 2012. I mean, they should be leveraging their initial success on securing more licensing deals because it's other companies' IP that'll make people subscribe, but I guess they didn't do that.

 

[Deft Beck]

A lot of Lootcrate stuff would end up at thrift stores or overstock places. Not surprising that they're going out of business.

 

[Space Runaway]

Junk box for youtubers though I did enjoy Ashens videos, at least.

 

[Potato Chip PRO]

I see alot of lootcrate shirts at my local thrift shops

 

[kingwingin]

I had a 6 month sub once, was cool to e
Get a little surprise box every month.

Shirts were tiny tho. Couldnt fit my BHM body

 

[Nymphae]

Yes please sign me up for another sub service that ships out low quality overstocked merchandise that I don't get to choose for myself. I saw a few of these boxes and it was always junk. Do you think they're going to send you out a box of awesome shit for less than what it cost? No, you're getting unsellable stuff, at a premium. Total bugman service for collecting useless trash.

 

[just_some_nut]

must've been the mega crates that done it

 

[DeepEnigma]

Wish this would happen to games that include them.

 

[StreetsofBeige]

Probably went like this:

1. Hey morons, sub to us monthly and get $50 worth of shit for only $40/month

2. Cost of goods only $35 so our company makes $5 per month! Multiply that by all the subs and that's big money!

3. But what about all the costs of overhead, office leases, warehousing, returns, marketing?

4. Oh shit, didn't think of that

 

[Mobile Suit Gooch]

I was a Lootanime subscriber a few years ago. Decided to drop them cause I felt it wasn't worth the price. There are better subscription boxes out there.

I see alot of lootcrate shirts at my local thrift shops

I seen quite a few at cons.

 

[Potato Chip PRO]

I was a Lootanime subscriber a few years ago. Decided to drop them cause I felt it wasn't worth the price. There are better subscription boxes out there.



I seen quite a few at cons.

They are $1.25 per shirt at the Salvation Army thrift thats a few minutes away... Get them while they're hot!

 

[SlashBringingHasher]

these kind of things don't make a profit unless you literally ship millions or charge more. their subscription is cheap and they make no money off it unless they can ship so money the logistics kind of average out and they can set up more complex shipping methods and warehouses that make it cheaper.

I looked at their prices and I have no idea how they make money. it doesn't make any sense to ship tiny amounts of goods when shipping storage and other associated costs add up on small items more so than less but big items. its quite obvious why they failed.

 

[MayauMiao]

I think going to thrift stores and finding loot that is truly valuable to you personally is a much better experience. At least my loot won't be generic like the other 250,000 subscriber.

 

[Deleted member 738976]

Can Funko Pop be next please?

So long as idiots keep buying them they will keep existing. A shame there can't be a figure company that makes every character ever made just about cheap and affordable but they actually look like what they are supposed to instead of having those big soulless eyes.

Kidrobot is no better but these were perfect for what they are. Why their Mega Man ones had to look shit is beyond me.

They should have been like these. Only Problem I have with them is that they are way too small. That and like the Sonic ones I posted they are in blind boxes.

 

[CSmath22]

I'm surprised they tricked 250,000 people into giving them money for dollar store bullshit.

 

[yeahokaywhatever]

I was a Lootanime subscriber a few years ago. Decided to drop them cause I felt it wasn't worth the price. There are better subscription boxes out there.



I seen quite a few at cons.

Outside of maybe two cool shirts, the other stuff was manga series that were already available or cheap tchotchkes. Maybe a cute lil' figurine, but nothing was worth the full price of the loot box. Cons always use them as cheap blindbag items.