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 andphoto library, as well asbegin a phased layoff of its remaining 153 employees. Thirty percent ofits workforce was let go in late September.
“I deeply regret that Garden.com is unable to see through the vision westarted nearly five years ago,” said president and chief executive officerCliff Sharples.”We believe a phased shutdown of the company’s consumerbusiness operations, as well as our continued efforts to maximize thecompany’s technology assets, serve as the best course of action in light ofour 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 productsfrom 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 of1999, 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 56cents 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.
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 refocusits marketing programs, Garden.com was unable to find another firm that wasprepared to fund or acquire the company.
“Despite every best effort by the company and its management to rebuildstockholder value and ensure a future for Garden.com’s consumer business,all possible avenues have been exhausted and it is clear that the onlycourse of action available to us is to conduct a staged shutdown of ourretail 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 inventorysale to consumers before it officially closes its virtual doors.
“We believe that Garden.com was instrumental in helping to create the onlinegardening market and continue to believe that the Internet will be aneffective retail channel in the long-term,” Sharples said.