The move follows similar programs from Target and Amazon.
Buy gets bought; Egghead gets Fry-ed
Buy.com Inc. and Egghead.com Inc., two teetering pure-play online retailers, both found buyers last month.
The best that can be said is that they’re not going out of business. Buy.com Inc. and Egghead.com Inc., two teetering pure-play online retailers, both found buyers last month.
Scott A. Blum, who founded buy.com but resigned in 1999 before the company went public, is buying back his creation. Blum’s SB Acquisition Inc. will provide $9 million in interim financing to keep buy.com in business, then pay 17 cents a share for the company. Buy.com went public in February 2000, selling 16.1 million shares at $27 each.
Buy.com last month laid off 40% of its staff-50 employees. Second quarter revenues were $94.9 million vs. $193.2 million a year earlier. Net loss was $5.7 million, an 83% improvement over $33.6 million in Q2 2000.
Menlo Park, CA-based Egghead.com filed for Chapter 11 bankruptcy and agreed to sell to Fry’s Electronics, a San Jose, CA-based electronics retailer, which is expected to continue to operate the Egghead.com site. Egghead was an early proponent of online retailing, closing all its stores to sell only on the web. Egghead.com will continue to operate under Bankruptcy Court supervision pending close of the sale.
On the brink for some time, Egghead was forced into bankruptcy by what the company characterized as “a dramatic and unexpected decline in sales.” Said Jeff Sheahan, president and CEO: “That made it impossible to reach profitability in the fourth quarter.”