Online grocer Webvan shuts down, files for bankruptcy
 
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Online grocer Webvan Group Monday announced that it is ceasing all operations and filing for Chapter 11 bankruptcy, due to a considerable decline in order volume during the second quarter ended June 30.
Webvan, which allowed customers to order groceries online and have them delivered to their homes, said that all existing orders will not be filled and that it is not accepting any new orders in any market.
The move, effective immediately, entails the termination of approximately 2,000 employees, the company said.
The company also said it has no plans to resume operations and will begin selling off all of its assets.
Given this, the company added that it is canceling a recently announced reverse stock split and that its common stock will be delisted from the NASDAQ stock exchange.
The company said that the drop in order volume coupled with a tough climate for raising new funds led to the company shutting its doors.
Webvan CEO Robert Swan said in a statement that the company decided to close down "rather than continuing to operate with high losses and decreasing cash," adding that "the clock has run out on us."
The online retailer served the San Francisco Bay, Los Angeles, San Diego, Orange County, Chicago, Portland and Seattle markets.
The IDG News Service is a Network World affiliate.
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