Buy.com wins financial rescue

24 Aug 2001 09:23

A last-minute rescue package from Buy.com's founder saves the company's relationship with its credit card processing company

Just days after warning that it was in danger of going out of business, Internet retailer Buy.com announced that it had won the financial support needed to renew its credit card processor agreement.

The financial support was provided by Scott Blum, the company's founder, in addition to interim financing of up to $9m (£6.2m) that he agreed to provide as part of a previously announced merger agreement, the company said on Thursday. The renewal will allow the ailing e-tailer to continue operations.

"I am pleased to report that it's business as usual," Buy.com President Robert Price said in a statement. "All of us at Buy.com are pleased with the renewal of our credit card processor relationship."

The company that handles its credit card transactions was scheduled to sever its relationship with Buy.com as of 1 September, according to documents filed with the Securities and Exchange Commission.

Credit cards account for about 90 percent of Buy.com's revenue, the company said in its report. The name of the credit card-processing company or the reason why the relationship was ending was not included in the filing.

Buy.com was once among the elite of Internet shopping sites. But for the past year, the company has languished amid layoffs, lawsuits, executive shake-ups and, this month, a delistment from the Nasdaq.

A possible reprieve came this month when the company announced that founder Scott Blum had agreed to buy the company for about $23.2m, or 17 cents per share. The deal, which Buy.com management has already endorsed, is subject to shareholder approval.

News.com's Greg Sandoval contributed to this report.

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Story URL: http://news.zdnet.co.uk/internet/0,1000000097,2093729,00.htm