Webvan, one of the few remaining independent Internet grocery operations, has announced it is halting operations and filing for bankruptcy debt protection.
"The company has no plans to resume operations and it will pursue an orderly wind down of its operations and sale of its assets and business," said a statement from the company based in Foster City, California.
It said the company, which was operating in seven US metropolitan areas, would file for protection under Chapter 11 of the US Bankruptcy Code.
"We've made significant progress in reducing our operating losses and burn rate, as well as improving the economics on each order we delivered," said Robert Swan, chief executive officer.
"However, our order volume declined considerably during the second quarter ended June 30, accelerating our need for capital. In light of the tough climate for raising new funds and our second quarter order volume, we have made the difficult decision to end all operations effective immediately."
Some 2,000 workers have been laid off as a result of the announcement.
The company said it had halted all operations including deliveries of existing orders.
The Internet retailer had served the Chicago; Los Angeles; Orange County, California; Portland, Oregon; San Diego, California; and San Francisco areas.
Last year, Webvan announced plans to acquire rival HomeGrocer.com in a stock swap deal worth an estimated 1.2 billion dollars that would have expanded the service to 13 US cities.
AFP