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08-15-01, 10:56 PM
Egghead to file for bankruptcy
By Troy Wolverton CNET News.com
E-tail pioneer Egghead.com is filing for bankruptcy protection and selling its assets to retail chain Fry's Electronics, Egghead announced Wednesday.
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The company is laying off two-thirds of its staff as part of the transition and plans to sell the assets that Fry's does not acquire under the supervision of the bankruptcy court. Fry's plans to continue operating Egghead's Web site, Egghead said in a statement.
Egghead suffered a deep decline in sales recently, which forced the bankruptcy filing and asset sale, Jeff Sheahan, Egghead's chief executive, said in the statement.
"We investigated a number of alternatives," Sheahan said in the statement. "We believe this action will allow the company to realize a value for its assets which will benefit our creditors."
Egghead representatives did not return calls seeking comment.
The move represents a bulking up of Fry's online efforts and could mark the end of its flirtation with electronics e-tailer Cyberian Outpost, an Egghead rival.
Fry's, which has a successful chain of 18 electronics stores in California, Texas, Oregon and Arizona, has done little online beyond selling DSL access through a rudimentary Web site. But the company bought a stake in Cyberian Outpost, which runs Outpost.com, in May, and made a bid to take over the company in July.
On Friday, Fry's withdrew its offer to take over Cyberian Outpost. Fry's, which owns 11 percent of Outpost, did not explain the withdrawal of the offer at the time.
Fry's representatives did not return calls seeking comment.
In June, executives at the Menlo Park, Calif.-based Egghead authorized a reverse stock split as part of a strategy to avoid being delisted from the Nasdaq.
By Troy Wolverton CNET News.com
E-tail pioneer Egghead.com is filing for bankruptcy protection and selling its assets to retail chain Fry's Electronics, Egghead announced Wednesday.
More resources from CNET:
• More Tech News
• Download Free Software
• Find Product Reviews
• Check Latest Prices
The company is laying off two-thirds of its staff as part of the transition and plans to sell the assets that Fry's does not acquire under the supervision of the bankruptcy court. Fry's plans to continue operating Egghead's Web site, Egghead said in a statement.
Egghead suffered a deep decline in sales recently, which forced the bankruptcy filing and asset sale, Jeff Sheahan, Egghead's chief executive, said in the statement.
"We investigated a number of alternatives," Sheahan said in the statement. "We believe this action will allow the company to realize a value for its assets which will benefit our creditors."
Egghead representatives did not return calls seeking comment.
The move represents a bulking up of Fry's online efforts and could mark the end of its flirtation with electronics e-tailer Cyberian Outpost, an Egghead rival.
Fry's, which has a successful chain of 18 electronics stores in California, Texas, Oregon and Arizona, has done little online beyond selling DSL access through a rudimentary Web site. But the company bought a stake in Cyberian Outpost, which runs Outpost.com, in May, and made a bid to take over the company in July.
On Friday, Fry's withdrew its offer to take over Cyberian Outpost. Fry's, which owns 11 percent of Outpost, did not explain the withdrawal of the offer at the time.
Fry's representatives did not return calls seeking comment.
In June, executives at the Menlo Park, Calif.-based Egghead authorized a reverse stock split as part of a strategy to avoid being delisted from the Nasdaq.