Buy.com is laying off 40% of its staff—50 employees—to cut costs. Second quarter revenue was $94.9 million down from $193.2 million in the second quarter of last year.
Buy.com is laying off 40% of its staff-50 employees-in an effort to find profitability, the company has announced. The company expects the lay-offs to save about $4.3 million a year.
Buy.com, the online electronics retailer, announced last week that it has entered into a merger agreement with SB Acquisition Inc., a company owned by buy.com’s founder Scott A. Blum. SB Acquisition will pay 17 cents a share for buy.com. That sale is expected to be completed by December. As part of the merger agreement, SB Acquisition will immediately provide buy.com with interim financing of up to $9 million, subject to certain conditions.
Bu.com also announced its second-quarter results today:
--Revenues for the second quarter 2001 were $94.9 million, down from $193.2 million in the same period a year ago.
--Gross profit was $11.1 million compared to $11.8 million in the second quarter 2000. --Cumulative customer accounts increased 43% to 4 million versus 2.8 million in the second quarter 2000.
--Repeat orders represented 70% of orders during the quarter, up from 61% in the first quarter 2001.
--Net loss was $5.7 million, an 83% improvement over the $33.6 million in the second quarter of 2000.
--Gross margins, which include fulfillment expenses, increased to 11.7%, an improvement from 6.1% in the second quarter 2000. Gross margins were 11.6% in the first quarter 2001.
--Operating expenses in the second quarter 2001 decreased 38% to $18.5 million from $29.8 million in the first quarter 2001, excluding the first quarter restructuring charge. Total operating expenses were $64.5 million during the first quarter 2001.
--Average order was $167, up from $162 in Q1 but down from $192 in Q2 2000.
--Customer acquisition cost $24 vs., $22 in Q1 and $39 in Q2 2000.