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Garden.com Snips Workforce, Sows New Division

Garden.com, an online retailer of gardening products, information and services, Thursday cut its workforce by 30 percent, affecting 93 people. The action is meant to lower operating expenses and streamline operations.

Simultaneously, Garden.com debuted its Trellis business division, which is an attempt to add a business-to-business component to the company's focus. Garden.com said it plans to commercialize the company's virtual supply chain technology and services solution. Trellis is a Web-based customer-centric system intended to streamline business supply chains and ensure positive end-to-end customer and supplier experiences.

By putting roots in the Trellis technology, the company hopes to establish a new business model and reap additional revenue streams.

"We believe the virtual supply chain model is powerful for a wide variety of businesses," said Cliff Sharples, president, CEO and co-founder of Garden.com. "The key to delivering a superior customer experience is to maintain control, quality, and visibility throughout the supply chain, while minimizing the investment and overhead of owned distribution centers and inventory. This is the solution Trellis can deliver."

Trellis provides a virtual warehouse system with flexibility, adaptability and scalability, enabling deployment across a wide range of supply chains whether they be e-commerce enabled, traditional cataloguers, physical retail or business-to-business, according to Sharples.

"Both customers and suppliers have full visibility across the entire supply chain process from the front-end shopping process through delivery," he said. "The solution enables a purely virtual supply chain, but can also enable a tiered distribution strategy in which the system offers an extended one-stop-shop that augments existing distribution centers.

The system is designed to scale in more complex and high-volume operations with advanced features such as multiple fulfillment methods, integrated bar-coding, scales and logistics.

"After reviewing the funding options available to us at this time, we found that the current cost of capital was unacceptable to continue to fund the growth and operating plan we have been executing on for the past year," he said. "We made the tough decision to reduce our workforce, so that we could refocus our energies, leverage our critical skills and assets, and evolve our business model to more accurately reflect existing market conditions."

In connection with the launch of the Trellis division, Garden.com and Lowe's Companies Inc., a leading home improvement retailer, announced their intent to negotiate a license of the Trellis technology, and leverage Garden.com's virtual supply chain technology and expertise to implement virtual supply chain solutions for both its retail and e-commerce businesses.

Garden.com expects that its first quarter revenues will be in the range of $2.3 million to $2.5 million, falling short of analysts' estimates of approximately $3.3 million to $3.7 million.

By comparison, first quarter revenue for the same period in the prior year was $1.4 million.

Garden.com anticipates that its net loss in the first quarter to be in the range of $10.0 million to $11.0 million including a restructuring charge of $2.5 million to $2.8 million, or approximately a loss of $0.57 to $0.62 per share.