Egghead gets Fry-ed
Egghead.com Inc., one of the first and most enthusiastic sellers on the web, has filed for Chapter 11 bankruptcy and agreed to sell all assets to Fry`s Electronics. It is the end of a bold experiment that transformed a chain of software stores into a web-based pure-play retailer.
Menlo Park, CA-based Egghead.com said it will continue to operate its business under Bankruptcy Court supervision pending close of the sale. After that, Fry`s is expected to operate the Egghead.com site under the Egghead brand. Fry`s Electronics is a privately held chain of electronics superstores based in San Jose, CA.
A third of Egghead.com`s employees have been asked to remain for the transition period. Others have been terminated, and assets of the company not acquired by Fry`s are expected to be sold under Bankruptcy Court supervision.
"We regret having to take this action, which was forced on us in recent weeks by a dramatic and unexpected decline in sales," said Jeff Sheahan, president and CEO of Egghead.com. "That made it impossible to reach profitability in the fourth quarter. We investigated a number of alternatives and were pleased with Fry`s offer to purchase the assets of the company and continue running the business, as the Egghead brand name is a strong and vibrant one. We believe this action will allow the company to realize a value for its assets which will benefit our creditors."
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