Menu selling itself to founder selling itself to founder

In yet another sign of the financial depths to which many online retailers have sunk, struggling has announced a deal to sell itself to company founder Scott Blum for just US$23 million.

As part of the deal, an investment company owned by Blum will pay 17 US cents in cash for each share of's stock. Blum will also immediately provide the California-based retailer of computer and electronics products with interim financing of up to $9 million, the two companies said.

The buyout deal climaxes a rapid fall from grace for, which did $787.7 million worth of business last year and was the second-largest online retailer in the US, behind Seattle-based But like many other e-commerce ventures, including Amazon, was hit hard by lower-than-expected sales that started during last year's holiday shopping season.

In February, the company announced a series of cutbacks, including a sharp decrease in the number of products it sells and the divestment or closing of all of its international Web sites. That was quickly followed by the resignations of's CEO and chief financial officer and the disclosure of plans to lay off almost half of its employees. in April reported a first-quarter net loss of $50.1 million on revenue of $124.6 million, down 40 percent from the year-earlier sales level of $207.6 million. The company was also facing a possible delisting of its stock by Nasdaq Stock Market, which held a hearing on the matter last month.

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