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Fry's Hashes Out Egghead Deal

8/15/2001 06:36:00 PM Eastern

Menlo Park, Calif. - Egghead.com today filed for Chapter 11 bankruptcy protection and reported that Fry's Electronics will purchase the online retailer's assets.

The deal's financial details were not disclosed, but Fry's is expected to continue operating the e-commerce site under the Egghead name. The assets not being acquired by Fry's will be sold off under bankruptcy court supervision. The web store will continue to operate under the court's supervision until the deal is completed, which is expected to happen in late September.

About one-third of Egghead's staff will stay on after the take over, but the remaining 200 were let go.

The prospect of another profitless quarter due to a dramatic decline in sales forced Egghead's CEO Jeff Sheahan to make this move. 'We investigated a number of alternatives and were pleased with Fry's offer to purchase the assets of the company and continue running the business,' he said.

Prior to Eggheads incarnation as an online computer and consumer electronics retailer the company operated a national chain of computer hardware and software stores.