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Priceline WebHouse Club closes
Editor in Chief
The Priceline WebHouse Club, a privately-held licensee of priceline.com, which enables consumers to name their own price for gasoline and groceries is shutting down. The company says it will undertake the closing "on an orderly basis over the next 90 days." The WebHouse Club said that all customers with unredeemed gas and groceries would receive a full refund of any prepaid amount, plus extra money to cover the estimated savings they were expecting to receive at the grocery store and gas pump. This announcement does not apply to any services offered by priceline.com, including airline tickets, hotel rooms, mortgages, new cars, rental cars and long-distance services. Priceline.com services are not affected by this announcement. Priceline issued a statement today stressing that the Priceline WebHouse Club licenses the name from priceline. Priceline.com also reported that it received a warrant in WebHouse Club and recorded a non-cash gain of $189 million in the 4th quarter 1999. The Company will take a non-cash loss for the full carrying value of the warrant in the 3rd quarter 2000. All WebHouse Club customers will receive an e-mail detailing the automatic refund process. Customers owed a refund will automatically receive it on their credit card. Refunds will be processed no later than Friday, October 20. For customers who priced items within the last two weeks and wish to pick up their unredeemed items instead of receiving a refund, green WebHouse Club grocery cards and blue WebHouse Club gasoline cards will remain active until 12:01 AM EST on Saturday, October 7, 2000. Customer service at the WebHouse Club will remain fully operational during the 90-day wind-down period. The WebHouse Club decided to shut down operations because management determined it would be unlikely to raise the substantial capital next year that would be required to complete its business plan and achieve profitability. WebHouse Club said that its cash reserves of approximately $50 million, as well as $20 million of additional working capital, would be more than sufficient to satisfy all obligations to customers, employees and suppliers.