E-tail Sector Reels as Three Big Names Flounder

08 November 2000

As if to underscore the problems of the ailing e-tailing sector, three high profile companies yesterday announced serious problems.

Former stock market darling, the publicly-quoted San Francisco online retailer Pets.com, yesterday greeted its 320 staff as they arrived for work with news that it is to cease trading. Two hundred and twenty-five workers were dismissed immediately, while the remainder stayed on to effect an orderly closedown. Said investor-relations manager John Cummings: “We still have obligations as a company and there are still a lot of relationships that have to be unwound."

Closing the company was the best option, according to the e-tailer’s founder, chairman and chief executive Julie Wainwright: "In the end, we thought it was the best thing for our shareholders, who are our primary concern, since we're a public company. Obviously, that's sad."

Referring to the online pets sector as a whole, Matt Stamski, a senior analyst at Gomez Advisors opined that the closure of pets.com "symbolizes the worst excesses of the capital market. People were betting on ideas that were almost stillborn. It's almost unprecedented to see an entire sector go from an idea to heavily funded to defunct in just a year and a half."
News source: Wall Street Journal

Another casualty is online vitamin and supplements trader MotherNature.com, which yesterday announced its liquidation and dissolution. A shareholders meeting is scheduled for November 30 to approve liquidation plans, and the company intends to sell certain assets, including intellectual property and other tangible and intangible assets. These are expected to be valued at $15.8 million, or $1 per share.
News source: Advertising Age - Interactive Daily

Ebay Inc
San Jose-based Ebay announced plans to let go 15% of the workers at its Butterfields auction house, axing 32 jobs out of about 200 positions.

General manager Geoff Iddison said the layoffs were "across the board" in all areas of the group, and part of a broader restructuring in which Butterfields will focus on the West Coast market after a failed attempt to expand into the Midwest. "This restructuring is aimed at giving more profitability to the live business," insisted Iddison.

Butterfields, the fourth-largest "offline" auctioneer in the US, is the market leader in a number of categories, including firearms, armor and celebrity memorabilia.
News source: Wall Street Journal

News source: Various media