Webvan Exits Dallas Market; Company to Focus on
2001 Profitability Goals for Nine Markets
FOSTER CITY, Calif.--(BUSINESS WIRE)--Feb. 20, 2001--Webvan Group,
Inc. (Nasdaq:WBVN) announced today that it will halt service in Dallas
in order to conserve operating capital and focus on the profitability
of its nine other markets.
"We are taking this action in light of Webvan's 2001 strategic
priorities -- bringing our regional operations to profitability and
conserving capital," said George T. Shaheen, chief executive officer
of Webvan Group, Inc. "While we regret the impact this decision has on
our employees and customers in the Dallas Area, we firmly believe that
this is a necessary and right step for the long-term viability of
Webvan.
"Dallas is our least developed and most competitive market. Given
these dynamics, gaining the necessary customer base to bring our
Dallas operations to profitability within our strategic timeframe
would require a large investment in marketing and working capital. We
believe that these resources can be more effectively and efficiently
utilized to bring our nine other, more established markets to
profitability," Shaheen added.
Webvan announced last month that it believes it has sufficient
capital to fund operations through 2001. The company also said that it
expects to achieve a company-wide positive cash flow in the second
half of 2002.
"This was a difficult decision because of the impact it has on
members of our local Webvan family," added Shaheen. "On behalf of all
Webvan employees and customers, I want to thank our Dallas-based
Associates for their outstanding contributions. They are pioneers in
the effort to introduce consumers to the benefits of online retailing.
We are committed to working with our Dallas colleagues to help them
through this transition."
Webvan's Dallas operations employ approximately 220 workers. The
company entered the Dallas market through its acquisition of
HomeGrocer.com in September 2000. HomeGrocer.com launched its online
service in the area in May 2000. The service adopted the Webvan brand
name earlier this year, but it has not been converted to Webvan's
technology platform or business model.
About Webvan
Webvan Group, Inc. is setting a new standard for Internet
retailing, combining the convenience of online shopping with a
personalized courier service that delivers products into customers'
homes within a timeframe of their choosing. Through its Web site,
webvan.com, Webvan offers a broad selection of quality
products at competitive prices. The company's relentless focus on
customer service, innovation, and value saves its customers time and
money. Webvan's corporate headquarters are located in Foster City.
Safe Harbor Statement under Private Securities Litigation Reform
Act of 1995: The statements contained in this press release that are
not historical facts, including statements relating to the sufficiency
of capital to fund operations in 2001 and the timeline for
company-wide profitability are forward-looking statements that involve
certain risks and uncertainties, including but not limited to: the
risk that the assumptions underlying the 2001 operating plan may
change and that the Company will need additional cash to fund
operations in 2001, the risk that the time and cost required to
complete the integration of the company's businesses and move to a
common technology platform will be greater than expected, the risks
relating to the ability to achieve favorable operating margins at our
facilities, including by improving operational productivity and
aligning capacity with demand, and the ability of our business systems
to scale to designed capacity, as well as other uncertainties detailed
in the Company's filings with the Securities and Exchange Commission.
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CONTACT: Webvan Group, Inc., Foster City
Bud Grebey, 650/627-3558
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