Cutting costs, CDNow closes London office
The online retailer shuts its doors in the United Kingdom but says it isn't cutting its efforts abroad.
The company said it closed the office earlier this month but added it is not cutting its efforts abroad. One editorial staff member remains working for CDNow in the United Kingdom, the company said, and two others have moved to the United States to work. Two marketing executives also have left the company.
The Fort Washington, Pa.-based company announced in March it would cut costs by about one-third to reduce its losses, which have totaled $212 million since it began doing business in 1994. The company has also been searching for investors or a merger partner.
CDNow said this week it is continuing to negotiate with several interested parties. At the beginning of June, it projected wrapping up a transaction before the end of the month. But it is now saying there are no assurances something can be completed by then.
On news of a potential merger or investment, shares of CDNow gained 111 percent on June 2 to close at $4.88.
The stock has since settled back down. At the close of regular trading today, the price was $3.06. The stock hit its 12-month high last July when it reached $23.25.
Last month, the company posted a wider-than-expected first-quarter loss of $28.2 million, or 92 cents a share, on revenues of $43.6 million.
The company also announced this week that Patrick Kerins of Grotech Capital has resigned from the board of directors.
In addition, CDNow said it has struck a one-year marketing deal with Time Inc. The deal gives CDNow promotions throughout the publishing company's online and offline magazines; it also gives Time exposure through CDNow.
Bloomberg contributed to this report.