WEB EXLUSIVE: Kozmo.com shuts down

Students must find another place to satisfy midnight cravings for Ben and Jerry’s Ice Cream and Krispy Kreme Donuts after online retailer Kozmo.com shut down its operations permanently April 11.

“Are you kidding?” said sophomore Joseph Brovenzano after hearing news of the closing. “(Kozmo) was the most convenient source for video games, movies, everything. My father cancelled my credit card because I ordered so much.”

The company posted a message on its Web site last week thanking its customers and announcing the company’s closing.

The doors of Kozmo’s D.C. headquarters on 14th and R streets were locked last week and a notice on the door explained that the new owners applied for an alcohol permit, with a hearing scheduled for early May. Employees, set to leave Friday, were tight-lipped, expressing their regret about the shut down.

“We are liquidating our assets,” said Stephanie Cohen Glass, director of corporate communications for the company. “We have no plans to re-open in the future.”

After launching in 1998, Kozmo expanded its operations to nine cities in two years. Last year, Kozmo’s membership doubled from 150,000 to 400,000 customers, according to a company press release. Delivering food, videos and other goods to GW students since its November 1999 launch in D.C., former Kozmo employees said they appreciate the business GW students gave the company.

The company informed its 1,100 employees of the decision to close the day after the announcement, and some will receive severance pay, Glass said. In August, the privately owned company ended its attempt to go public and announced three rounds of lay-offs in the last six months.

The service company turned a profit in Boston, New York and San Francisco last December, but Kozmo was unable to find an overall profitable formula, according to a Reuters wire service report.

“Given more time and more hospitable market conditions, Kozmo would have succeeded in rounding the corner and would have continued to grow,” said Gerry Burdo, president and CEO of Kozmo, in the April 11 press release.

Many students said Kozmo.com was a convenient source for snacks and video rentals.

“I used (Kozmo) pretty often,” freshman James Capo said. “Where do you go and rent movies now?”

“I have been using Kozmo since I got to school for dinner, Red Bull (energy drink), Krispy Kremes,” freshman Jack Spencer said. “But I am not disappointed because they started adding a delivery fee and the stuff took longer to get here.”

Kozmo.com instituted a $5 minimum charge and a delivery charge for purchases less than $30 last fall. The delivery fee helped increase the average order size from $10 to $25 last July according to the press release.

Some students said they will not miss the service.

“They were unreliable and they stopped caring about the customer when they starting charging a fee, and I stopped using them,” sophomore Ben Caplan said. “It would be nice to have other services but I am not disappointed that they closed.”

Students cited Homeruns.com, an online grocery delivery service, as another online retailer they use to purchase goods, and said they hope for more options in the future.

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