eToys nears the end
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February 5, 2001: 5:32 p.m. ET
Online toy seller tells employees to prepare for the worst
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NEW YORK (CNNfn) - Financially beleaguered online toy seller eToys has told its remaining employees that it is unlikely they will have their jobs after the end of March.
The Los Angeles-based company said Monday that the remaining 293 employees located in its Ontario, Calif., and Blairs, Va., distribution centers have been given job elimination notices as it continues to seek a buyer or merger partner for its flagging business.
eToys (ETYS: Research, Estimates), which last month reported a loss of $74.5 million on $131.2 million in sales, has said it has only enough cash to keep its business going until the end of March. It has hired Goldman, Sachs & Co. as its financial advisor to explore strategic alternatives for the company.
In a statement released after the close of trading Monday, eToys said it does not believe that additional capital will be available to the company.
Already, eToys has cut 700 jobs in an effort to save money.
"We're working with Goldman to find some kind of strategic alternative for the business, but we've stated that our cash goes only until the end of March," said Gary Gerdemann, a company spokesman.
"Clearly, the end of March is a very important date, and if we don't have a buyer by then, you can connect the dots," Gerdemann added.
The company also said it has received a notice from Nasdaq that its stock has failed to maintain the minimum requirements for listing on that exchange since its shares have fallen to below a minimum bid price of $1 for 30 consecutive trading days.
As a result, Nasdaq has provided the company with 90 days to regain compliance with this requirement or be delisted from trading, which eToys said it is unlikely to be able to do.
eToys shares fell 3 cents to 28 cents on Nasdaq ahead of the news and were halted in after-hours trade.
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