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Ailing Gazoontite remedies site with closure

Health site Gazoontite.com closes its Web operations over the weekend yet maintains its brick-and-mortar stores, the company confirms.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
2 min read
Health site Gazoontite.com closed its Web operations over the weekend, fearing that an impeding cash crisis could prevent the company from shipping products, the company confirmed today.

"(Gazoontite) has temporarily put our Web operation on hold," said chief executive Daniel Korn, who last month took over for founder and former CEO Soon Chart Yu.

One of the first Web-only retailers to expand its business into the brick-and-mortar world, Gazoontite has four physical stores that will remain open. The stores, which sell asthma and allergy-relief products, are located in San Francisco, Chicago, Los Angeles and New York.

Gazoontite is perilously close to running out of cash, according to sources close to the company. Executives are currently in negotiations to raise new funds. Korn said that Gazoontite "did not want to risk being unable to fulfill" orders while it worked "to bring our negotiations to a positive resolution."

Korn declined to detail Gazoontite's financial situation or its negotiations with investors.

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Since the April stock meltdown, e-commerce sites have struggled to get continued funding. Many Internet companies have been reduced to waves of layoffs or outright closure after burning through initial rounds of financing.

Last month, San Francisco-based Gazoontite laid off about 50 workers, or 41 percent of its staff, as part of a restructuring. The company also decided to devote more of its resources to its brick-and-mortar operations.

Gazoontite garnered headlines last year for being among the first to break ranks with Internet retailers and to adopt an offline strategy.