The PennySaver, an advertising newsletter that was a fixture in Southern California mailboxes for decades, is going out of business.
Employees said they were told late Friday that the company was ceasing operations immediately, without warning or further explanation.
“They said, ‘That’s it. We’re done. We’re closing. Everybody pack up your things and leave,'” said one employee, who asked that her name not be published because she was unauthorized by the company to talk to the news media.
The Brea company employed hundreds of people and circulated by mail throughout Southern California.
Employees said they were not given their final paychecks and were not told how to extend their healthcare coverage.
PennySaver Chief Executive Ronald Myers said in a statement Sunday that the company was forced to shut down after its lender “unexpectedly ceased our funding.”
“We empathize with our employees during this difficult time and are continuing to work through several options for the company, including ongoing discussions with a potential buyer and working with our lender to re-secure the line of capital to continue operations,” Myers said.
Los Angeles investment firm OpenGate Capital acquired the PennySaver from Harte-Hanks in September 2013. OpenGate’s portfolio includes businesses throughout North America, Europe and Latin America with combined annual revenues of about $3 billion, according to OpenGate’s website.
Asked for an explanation of the sudden closure, OpenGate forwarded Myers’ statement to The Times but did not elaborate.
On its website, OpenGate said the PennySaver is the largest direct mail shopping publication in the United States, reaching 11 million people weekly. The publication includes coupons for a variety of businesses and advertisements for garage sales, pets, rental homes, new and used cars, and other items and services.
Startled employees were still searching for an explanation Sunday.
“I have a mortgage like everybody else. Now I have to pay for medical insurance,” the employee said. “How do you afford it? You can’t live on unemployment. What are you supposed to do?”