Deciding that its sock puppet dog just wouldn't hunt, Pets.com today announced that its online pet-supply store is being shut down -- adding another company to the growing list of dot-com failures.
The San Francisco-based company laid off 255 of its 320 employees and said it plans to try to sell off its major assets, including its Web site, product inventory, distribution center equipment and its well-known sock puppet character.
In today's announcement, Pets.com said the shutdown decision came after "a lengthy and exhaustive effort" to find new financing or a buyer for the company. The retailer hired New York-based Merrill Lynch & Co. to help with the search and said it cut "as many operating expenses as was prudent" in an attempt to conserve cash.
But "fewer than eight" of the 50-plus companies contacted by Merrill Lynch were even willing to meet with Pets.com to explore a possible purchase or financing deal, the company added.
"It is well known that this is a very, very difficult environment for business-to-consumer Internet companies," said Pets.com CEO Julie Wainwright in a statement. "With no better offers and avenues effectively exhausted, we felt that the best option was an orderly wind-down with the objective to try to return something back to the shareholders."
A brief notice posted on Pet.com's Web site said the company plans to stop taking orders from customers on Thursday. Officials at the online retailer didn't return several calls seeking additional details on the shutdown process.
The decision by Pets.com comes just one day after Furniture.com Inc., an online furniture and home furnishings retailer based in Framingham, Mass., announced that it was closing after failing to find needed new financing.
Both companies claimed to be the top online retailer in their different niches. But their revenue intakes were still miniscule: Furniture.com said its sales totalled $22 million in the first nine months of the year, while Pets.com last month projected that it would do $35 million in business for 2000 as a whole.
Pets.com, which lost $21.7 million on sales of $9.4 million in the third quarter, counted Amazon.com Inc. among its investors and was a participant in the Seattle-based online retailing giant's Amazon Commerce Network program. Three months ago, Amazon disclosed that its financial agreements with some of the program's participants were being restructured to lower the cash payments it got from the struggling companies.
Pets.com is the second Amazon affiliate to go out of business in recent months. Living.com Inc., an Austin, Texas-based rival to Furniture.com, shut down in August after running short of money.