ONLINE GROCERS CONTINUE TO TAKE A HIT

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(July 16, 2001) -- The online grocer sector continues to collapse. Webvan Group, which ceased operations July 9, filed for Chapter 11 bankruptcy protection Friday. The move precedes a sale of the company's remaining assets.

Meanwhile, Webvan competitor Peapod is set to be sold to Dutch supermarkets firm Koninklijke Ahold NV for $35 million.

According to Reuters, Ahold will launch a tender offer for the 42% of Peapod it does not own. Once the deal is done, the company will merge Peapod with one of its subsidiaries. The acquisition is expected to be completed in the third quarter, at which time Peapod will no longer be listed on the Nasdaq.

Late last week, a third company in the category, Homeruns.com, closed its doors. -- Adrienne Mand

Copyright July 2001, Crain Communications Inc.

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