Headline Feeds
Garden.com (Nasdaq: GDEN) became the latest addition to the ongoing dot-com casualty list Wednesday when the company announced a phased shutdown of its e-tail operations.
The Austin, Texas-based firm plans to sell its consumer business assets, including its product inventory, URLs, online gardening tools, content and photo library, as well as begin a phased layoff of its remaining 153 employees. Thirty percent of its workforce was let go in late September.
"I deeply regret that Garden.com is unable to see through the vision we started nearly five years ago," said president and chief executive officer Cliff Sharples. "We believe a phased shutdown of the company's consumer business operations, as well as our continued efforts to maximize the company's technology assets, serve as the best course of action in light of our current situation."
Writing on the Wall
Garden.com was launched in September 1995 and had its initial public offering (IPO) in September 1999, raising US$49.2 million. The Web site offered more than 20,000 products from over 60 suppliers, and had registered over a million members.
Although shares of Garden.com reached a 52-week high of $15 at the end of 1999, trading of Garden.com stock was halted at less than a dollar.
The company posted a first-quarter loss this week of $9.9 million, or 56 cents per share, compared to $1.45 per share in the same quarter last year. Revenues were $2.6 million versus $1.4 million a year ago.
Spring Planting
As early as last spring, Garden.com consulted with Robertson Stephens to evaluate alternatives that would allow it to stay in business, such as securing additional funding, selling the company or forming new partnerships.
Even though the company took steps to reduce operating expenses and refocus its marketing programs, Garden.com was unable to find another firm that was prepared to fund or acquire the company.
"Despite every best effort by the company and its management to rebuild stockholder value and ensure a future for Garden.com's consumer business, all possible avenues have been exhausted and it is clear that the only course of action available to us is to conduct a staged shutdown of our retail operations," Sharples said.
Never Promised Roses
Garden.com's announcement follows a series of dot-com closings this month, including MotherNature.com, Furniture.com, Pets.com, and Streamline.com. Garden.com will be conducting a "going out of business" product inventory sale to consumers before it officially closes its virtual doors.
"We believe that Garden.com was instrumental in helping to create the online gardening market and continue to believe that the Internet will be an effective retail channel in the long-term," Sharples said.
