Retail chains are struggling, something that is made clear every few weeks when it seems another has filed for bankruptcy. Bed, Bath & Beyond, The Body Shop, Christmas Tree Shops, Express, Rue21 and Tuesday Morning have all had to declare bankruptcy and close stores. The issues are also affecting non-traditional retailers too, and a massive one just joined the ranks of bankrupt companies.
Chicken Soup for the Soul, the company that owns DVD kiosk brand Redbox, just filed for Chapter 11 bankruptcy. They purchased Redbox in 2022 for $357 million in stock and debt, and unfortunately, the 29,000 Redbox locations nationwide were not able to turn a profit for them, likely because DVDs are becoming less relevant with the onset of streaming.
Interestingly, Chicken Soup for the Soul also owns streaming brands including Crackle and Popcornflix, but they have not been enough to keep the company profitable. In fact, per Deadline, in Chicken Soup for the Soul's bankruptcy filing, they claimed just under $1 billion in debt. They declared bankruptcy after missing a week of paying their employees. In an email to those workers, the company explained, "Overnight we filed for Chapter 11 bankruptcy protection. In connection with the filing, we have applied for approval of a debtor in possession [DIP] loan. Upon court approval, we expect payroll to be funded early in the week and funding for this upcoming week's payroll to also be secured. We also expect to have the funds to reinstate medical benefits back to May 14, 2024 and going forward. We will provide regular updates."
The company's loan would be up for $100 million to help fund operations amid the bankruptcy. Earlier this month, they revealed their 2023 losses were $636.6 million, up from $111.2 million in 2012. No word yet on what will happen with the many Redbox kiosks.