By Keith Regan E-Commerce Times
03/30/01 10:11 AM PT
PlanetRx closed its online store earlier this month, referring
its customers to longtime competitor Drugstore.com.
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PlanetRx.com said Thursday that its board of
directors approved a plan to liquidate all of the
e-tailer's assets, in an attempt to regain some cash for its shareholders.
Holders of PlanetRx stock will vote on the plan -- which marks
the abandonment of previous intentions
to enter the US$14 billion a year specialty drug
market -- at a company meeting scheduled for June 12th.
The liquidation plan includes selling off all remaining assets, including
a distribution center in Memphis, Tennessee. PlanetRx has already put
several of its key domain name holdings up for sale.
Last Round?
"PlanetRx.com's Board of Directors has concluded that a plan of
liquidation presents the best option to preserve remaining shareholder
value," chairman and chief executive officer Michael
Beindorff said, adding that the plan was
agreed upon "after months of deliberations and evaluations."
The company hopes that the liquidation plan will enable PlanetRx to
avoid bankruptcy. According to Beindorfff, the liquidation plan,
which is being refined by its attorneys and accountants, is
designed to sell off the assets in an "orderly and efficient manner."
Looking for Niche
In February, PlanetRx announced that it would get out of the
health and beauty e-tail business as of March 12th, when it shuttered its
online store and referred prescriptions and other customers to longtime
competitor Drugstore.com.
At the time, PlanetRx also said it had entered into an agreement to
acquire a small, unnamed company in the specialty drug field and intended to
enter that market. PlanetRx said that the niche market for
drugs used only by a small percentage of the population
is worth $4 billion a year in the U.S.
Early Orbit
PlanetRx had one of the more dramatic stock price run-ups in
1999, peaking at $292 a share in October of that year. On Thursday, it
closed at 27 cents, just above its 52-week low of 22 cents.
When it reported earnings for the fourth quarter last month, the
Memphis, Tennessee firm said that it had less than $9 million in cash on
hand, down from more than $116 million a year before, and had lost $10
million during the previous quarter.
PlanetRx also warned at the time that an upcoming audit would raise
questions "regarding the company's ability to continue as a going concern."
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