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Webvan Group Drives Off into Sunset

LOS ANGELES-The online grocer closes operations and permanently furloughs remaining 2,000 workers. A year ago, some experts said the dot-com's seemingly boundless future would dramatically lower demand for traditional supermarket space.

By David W. Myers | Updated on July 09, 2001

LOS ANGELES-Webvan Group Inc., the online grocer that some experts said only a year ago would drastically lower demand for traditional supermarket space, shut down its operations today and announced plans to file for Chapter 11 bankruptcy protection.

The company, which raised about $800 million from venture capitalists since its inception roughly two years ago, had recently abandoned several markets in an effort to conserve cash. Before today’s announcement, it was focusing on about 750,000 active customers who ordered home-delivered items online in seven areas: LA, Orange County, San Diego, San Francisco, Seattle, Chicago and Portland, OR.

The company started out by taking electronic orders for groceries, but quickly expanded into delivering everything from household goods to compact discs and books. It told the SEC in April that it would need a large cash infusion in order to stay in business, and its own outside auditor attached a note to the company’s 2000 financial results that said there was “substantial doubt about Webvan’s ability to continue.”

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