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The company filed for Chapter 11 protection on Wednesday in the US Bankruptcy Court for the Southern District of New York. In its announcement, the company cited the need to reduce costs tied to its legacy operations in direct mail and ecommerce.

As outlined in court filings, PCH intends to use the bankruptcy process to wind down its long-standing direct mail catalogue marketing and magazine subscription businesses.

These traditional operations, once core to the company’s identity, have become financially burdensome. Instead, PCH will focus its efforts on strengthening its digital advertising and online sweepstakes ventures.

As part of its digital transformation, PCH recently entered into a partnership with SCCG Management, a gambling advisory firm.

The collaboration is expected to help PCH capitalise on the growing sweepstakes gaming market by leveraging its extensive first-party data.

The goal is to boost user engagement and create new revenue streams through targeted advertising and gamified experiences.

While PCH has not publicly confirmed plans to expand into real-money gaming or sweepstakes-based gambling, the partnership suggests a strategic interest in that direction.

The bankruptcy also provides an opportunity for PCH to either sell off its assets or find a strategic business partner who can support a sustainable growth plan focused on its digital platforms.

According to court documents, the company continues to attract users through its well-known sweepstakes, generating revenue by selling digital ads across its website and mobile apps.

NEXT.iohas attempted to contact company representatives for comment.

From land-based to digital

PCH’s journey began with direct mail sweepstakes paired with magazine subscription offers, eventually gaining national recognition through its televised Prize Patrol surprises.

These in-person prize deliveries became a hallmark of the brand, drawing significant public attention and a loyal customer base.

However, this fame has also led to regulatory scrutiny.

In 2023, PCH reached an $18.5m settlement with the Federal Trade Commission over allegations that consumers were misled into believing that making purchases would increase their odds of winning.

PCH denied any wrongdoing but agreed to the settlement to resolve the matter.

At the time, the company was already experiencing substantial financial strain.

The rise of online retail giants like Amazon and Walmart severely undercut PCH’s ecommerce operations, prompting the company to shutter that division.

Simultaneously, the costs of mailing, shipping, and television advertising climbed sharply, further eroding revenue.

Currently, PCH employs 105 people and reports approximately $38m in annual gross revenue, according to company data. It also holds assets valued at $11.7m, while its liabilities total $65.7m.

Notably, this includes around $11.5m in unclaimed cheques owed to more than 757,000 individuals.