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Merger talks end between Kozmo, Urbanfetch

After being locked in a year-long duel for New York's home-delivery market, merger talks between the rival online convenience stores break down.

Merger talks between rival online convenience stores and have broken down, both companies confirmed Tuesday.

Rumors have swirled for weeks that the two Web retailers, locked in a year-long duel for New York's home-delivery market, were in negotiations to combine the companies, which deliver convenience goods to customers' doors in about an hour.

A Kozmo spokesman confirmed the breakdown, which was outlined in a press release from Urbanfetch.

Kozmo is the larger of the two companies. Backed by, Kozmo has attracted more than $250 million in private investment and has expanded into 11 cities, including San Francisco, Chicago and Los Angeles, over the last year.

At the same time, Urbanfetch moved into London. Both companies have earned headlines for dispatching delivery people on bicycles, motor scooters and vans to transport goods such as videos, CDs and potato chips.

Both companies have cut their staffs recently, and last month, Urbanfetch surprised industry watchers by announcing it was dropping videos from its product offerings.