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.

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