Former Pets.com CEO explains reasons behind company's shutdown
Company was not driven out of business by selling below cost, Julie Wainwright says
Former Pets.com Chief Executive Julie Wainwright discussed why Pets.com shut down, after a recent sfgate.com article made the comparison between Wainwright's pets.com and startup company, PetFlow.com.
In her comments , Wainwright said that her company did not go out of business because it was selling petfood for below cost, as the article claimed, and pointed out that the company's average order was around US$37, only half of which included petfood. She also noted that in 2000, the company had to employ more than 40 engineers because there were no "plug and play" solutions for ecommerce management and customer service, in addition to needing several IT staffers to ensure the site did not crash since cloud computing did not exist.
Wainwright also attributed the closure of Pets.com to the fact that of the US$260 million in funding needed to break even, the company had only raised US$180 million and felt it would be impossible to raise the rest. Pets.com believed that the company should be shut down to return money to shareholders instead of being forced to declare bankruptcy, according to Wainwright.