Egghead soggy after sales take a dive

Etail pioneer Egghead.com has filed for Chapter 11 bankruptcy protection, laid-off 180 staff and sold off assets to retail chain, Fry's Electronics.

Egghead, already a high street brand rivaling Radio Shack, adopted a pure-play dot-com strategy in January 1998 and boasted of doubling sales in the following six months as a result.

However, the company has since suffered a severe drop in sales, according to Jeff Sheahan, president and CEO of Egghead.com.

Sheahan said in a statement: "We regret having to take this action, which was forced on us in recent weeks by a dramatic and unexpected decline in sales. That made it impossible to reach profitability in the fourth quarter."

Fry's Electronics will continue to operate the Egghead site, albeit in a significantly reduced form.

Sheahan is adamant the sale was in the company's best interests.

"We investigated a number of alternatives and were pleased with Fry's offer to purchase the assets of the company and continue running the business, as the Egghead brand name is a strong and vibrant one. We believe this action will allow the company to realise a value for its assets which will benefit our creditors."