Online grocer Webvan closes down, files for bankruptcy

Online grocer Webvan Group Inc. announced Monday 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 to have 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 Foster City, California-based company said.

The company said that it has no plans to resume operations and will begin selling off all of its assets.

Given this, the company added that it is cancelling 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 Chief Executive Officer 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, San Diego, Chicago, Portland and Seattle markets.

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More about: SWAN, Webvan
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