FRAMINGHAM (08/16/2000) - After just 13 months in business, including three months as an online partner with Amazon.com Inc., Internet furniture store Living.com Inc. closed its doors Tuesday, citing a lack of continuing capital investment.
The Austin, Texas-based online retailer posted a terse message on its Web site to announce the closing. The company said it is filing for bankruptcy and is laying off 275 workers.
In a written statement, Shaun Holliday, Living.com's CEO, said the action came because "the recent downturn in the capital markets has substantially impaired our ability to raise the capital required to achieve profitability. After exhausting all apparent alternatives, we have no choice but to file Chapter 7."
A spokeswoman for Seattle-based Amazon could not be reached for comment early today.
Back in May, Amazon.com had excitedly announced its partnership with Living.com, touting a new "Home Living" tab on Amazon's home page that would lead customers directly to a wide range of furniture products.
That US$145 million deal, which required Living.com to pay Amazon $29 million annually to be included as a furniture tab on Amazon's home page, helped seal the company's fate, said Jeff Quinn, an analyst at Gomez Advisors Inc. in Lincoln, Mass.
"They had chosen some very expensive deals at a time when [investment] cash was freely available," Quinn said. "Today, that is obviously not the case."
"They just made difficult decisions that obviously didn't pan out in their behalf," he said.
Also in May, the company announced the layoffs of 50 workers to help reduce costs.
Living.com was founded in 1998 and launched its site in July 1999. The company's strategic partners included Benchmark Capital, Austin Ventures, Comdisco Ventures, Pivotal Asset Management, GE Capital, Amazon.com and Starbucks Corp.
Living.com sold furniture, bedding, home textiles, accessories, window treatments, lighting, rugs and garden and cooking items. The site had recently been recognized by Gomez.com as being the "Best Online Home Furniture" and "Best Online Home Furnishings" store.
A note on the Living.com Web site advises customers with pending orders to continue to visit the site to learn the status of their orders.
The note states: "We regret that circumstances beyond our control have forced us to discontinue operations."