Possible SkyMall Savior: I'm Not Bidding Without Airline Deals
Contrary to a lot of the buzz that’s taken on a life of its own on the Internet, Scott Jordan does not officially own SkyMall yet. And if the airlines don’t cooperate with the entrepreneur, the perceived savior of the kitschy, iconic product catalog may back out of the bidding altogether.
Jordan, the CEO of ScottEVest, a company that’s profited by being featured in the shopping mecca, told TravelPulse Wednesday that the prospects of him bidding at the Mar. 13 bankruptcy auction are directly tied to the airlines’ willingness to work with him.
And right now, the airlines aren’t taking his calls.
“I’ve reached out to every airline and right now, I’ve only got one callback and that happened today,” said Jordan (pictured above). “I’m not putting up a nickel unless I have agreements in advance of this auction and right now, that prospect is not looking good.”
The problem is that the debtor behind the bankruptcy, Xhibit Corp., has put the catalog company up for sale as is – and as it stands right now, SkyMall’s carriage deals with the airlines have either expired or about to expire.
Airlines like United and American stopped carrying the magazine soon after they announced their bankruptcy intentions in late January.
“Having the print product on the planes is absolutely essential to my interest in SkyMall,” Jordan said. “I have extensive plans to extend the brand, but my team and I believe that having that tangible print product in your hand is still very essential to the value moving forward.”
Jordan said he takes issues with Xhibit’s many explanations behind the demise of SkyMall as stated in their bankruptcy filing – copouts such as the rise of Wi-Fi access on planes and a crowded retail environment. Per the filing, the company’s revenues sank 41 percent in a year, from $98.7 million in 2013 to $57.8 million in 2014.
“These are all issues that can be overcome if you steer the brand the right way, and we think we can do that,” he said.
Jordan is the only suitor to take his plans to bid on SkyMall public, but he knows he’s not the only bidder. He fully expects competition.
He said Xhibit has set up the bankruptcy auction as a stalking horse bidding, meaning that a preferred bidder could emerge that will be given preferential terms ahead of the auction. The stalking horse is used to set a base price going into the bidding and generally leads to a better selling price for the debtor.
The stalking horse bidder and the debtor agree to a selling price ahead of the auction, which then serves as the starting point for bidding. Then the stalking horse bid gets a percentage refund on its bid if it is not accepted.
Xhibit has not announced any tentative agreements heading into the Mar. 13 auction.
“It’s one of many factors that have really complicated this issue and may make the concept of bidding unrealistic for us,” Jordan said. “But if we can’t get the airlines to come to the table, we’re simply not putting up any hard dollars here.”
Why are the airlines balking at talking with Jordan? One factor in play is the money saved by not carrying SkyMall.
Wired Magazine estimated that one airline, American, could save more than $350,000 in fuel costs just by not carrying the catalog.
“That’s a real factor here. I understand those savings. The debtor has really pushed the timetable on this bidding and not given us much time to work out deals with the airlines,” Jordan said.
Jordan understands that cash is king when it comes to the bankruptcy auction. Nonetheless, he’s taken his plans public. Jordan is no stranger to publicity. He walked away with a “no deal” on a contentious and dramatic season three episode of “Shark Tank” but parlayed the publicity into profits for his apparel company.
He’s garnered much publicity as the only public bidder here, the white knight coming in to save a beloved quarter-century-old institution. The publicity will only help sales of his products, but Jordan has made it clear that this is far from a publicity stunt.
He has brought in former PC Magazine editor Jim Louderback to head the SkyMall re-launch team. Louderback told Yahoo Travel that he and Jordan are looking to evolve the print product into a higher-brow product, like a J. Peterman catalog.
“We’d not only include listings for, say, noise-canceling headphones, but also an article explaining how the technology actually works,” he told Yahoo. “We’re going to make it an entertaining experience, a curated shopping journey targeted at real travelers and their interests.”
There will be the quirky tech products like the USB-charging paper towel stand. But they’ll also be more wider-appealing but yet still unique products.
“We want the readers to continue to have the experience of the unexpected, of wonder, of delight,” Louderback explained, “so you’ll be seeing stuff like the next pet rock, the new fake Google Glass-type gag, whatever may tap into that month’s zeitgeist,” but it’ll be a small part of the magazine, sort of comic relief along with the real items.
Jordan said that his team is looking to the print product as the centerpiece to an empire building on the brand, much like the evolution of the “As Seen on TV” brand.
“Sure, there will be a vibrant app, but you could have SkyMall airport shops and many other offshoots of the brand,” said Jordan, who plans to release a more extensive version of his vision for SkyMall via LinkedIn later this week.
Some, like Runway Girl, have pondered if SkyMall could be a purely digital play moving forward, partnering with inflight entertainment companies.
Jordan reiterated that the print product is still the centerpiece of the appeal for his team.
“This is nothing for us without having that catalog on the planes,” he said.
Jordan said he has far from given up on his bid, but made an impassioned plea to the airlines to hear him out.
“Vendors, advertisers, they’re all very excited, but it all hinges on getting a deal done with the airlines,” he said. “If I could say one thing, I’d say to the airlines, please return my calls. I’d love to be partners and make this deal happen.”
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