Losses Polish Off Furniture.com
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Furniture.com, the Framingham, Mass., Internet retailer, has permanently shelved its business plan and laid off 76 of its 88 employees.
"The 12 remaining employees will ensure the professional management of matters relating to the closure, including the review of available options for sale of the company's assets," the company said in a statement issued this morning.
A Furniture.com spokesman did not immediately return phone calls seeking comment.
All laid off employees received severance packages. Furniture.com will also provide refunds to customers with undelivered orders. Since late May, customer payments have been deposited in an escrow account. Customers will be contacted by the escrow agent within 60 days and told how to submit refund claims.
Earlier this year, Furniture.com laid off 110 employees, in two separate rounds, to cut costs. The firm, which counted CMGI as a minority investor, lost $46.5 million last year on revenues of $10.9 million.
In January, Furniture.com filed for a $50 million IPO. But it postponed, and ultimately pulled, its offering when Internet retailing stocks hit the skids in April. Instead, the company had to settle for a $27 million in venture capital.
The furniture sector has had more trouble than other retailers in converting to a Web model. Shipping costs are high, and while buyers may use the Internet to research a furniture purchase, many simply won't buy a mattress or sofa without lying or sitting on it first.
Forrester Research of Cambridge, not known for its conservative estimates, predicts that just 5 percent of furniture sales will take place over the Net in five years, leaving a batch of firms scrambling for less than $4 billion worth of business.
Closer to home, FurnitureChannel.com, a Sudbury online furniture seller, changed its name to FurnitureFan.com (meant to evoke an image of furniture enthusiasts), and its business plan. The year-old company is now an online directory of brick-and-mortar furniture stores and products.
Despite the failure of the company, Furniture.com, in what will likely be its last press release, claimed it "dominated" the online furniture business since its launch in January 1999. In September, the website attracted roughly 1 million unique visitors. Unfortunately for Furniture.com, and its employees, not enough were buying.