The failing on-line retailer eToys yesterday announced that it will
lay off its remaining 293 employees, all of whom are based in the
US, by 6th April unless a solution to its financial crisis can be
found.
The failing on-line retailer eToys announced yesterday that it will lay off its remaining 293 employees, all of whom are based in the US, by April 6 unless a solution to its financial crisis can be found.
Just a month after eToys sacked 70% of its staff and closed down its European operations, the toy retailer predicates that current funds will be exhausted and the business will have to be shutdown this spring.
EToys has debts in the region of $200 million. An informal committee of creditors, including Hasbro, Lego Systems and Mattel has extended its standstill agreement with the company until 15 February while decisions about the future are made. In order to carry on, eToys requires a huge capital injection which it does not believe will be available. However, the US investment bank Goldman Sachs is still exploring eToys’ strategic alternatives, which include a takeover or asset sale.
News of eToys’ anticipated collapse nudged its share price down yesterday to just 28 cents. EToys’ stock has not only plummeted from its $86 peak in 1999 but the current low has also put the company at risk of being delisted from the NASDAQ exchange. NASDAQ has given eToys notice that its shares have traded at under the $1 minimum for 30 consecutive days and the company must regain compliance within 90 days.
See also:
Trade mark twist in the eToy story, OUT-LAW News, 29/01/01
eToys cut 70% of staff in struggle to survive, OUT-LAW News, 05/01/01
eToys to close its UK operation, OUT-LAW News, 04/01/01.
