Webvan Group Inc.'s founder and largest single shareholder quit its board of directors yesterday.
Louis Borders resigned from the Foster City, CA, company's board, citing unspecified personal reasons. The move comes only five months after Borders gave up his title as chairman to George T. Shaheen, formerly head of Andersen Consulting.
“Our day-to-day operations do not change, and we're focused on profitability goals,” said Amy Nobile, spokeswoman for Webvan.
“We respect his decision and we're sad to see him relinquish his official duties, but that's really what he always had in mind,” Nobile said. “He's the ideas person behind companies and he then kind of steps back and relinquishes the reins.”
Border's departure comes less than two weeks after Webvan partnered with PETsMART Inc. to open a co-branded store. The PETsMART.com store replaced Webvan's pet section.
The PETsMART deal came only days after Nasdaq warned Webvan that its stock would be delisted from the tech-heavy index if its share price did not climb above $1 in the next 90 days and stay there for 10 consecutive days. Webvan has been quoting at less than $1 since late November.
In fourth-quarter results declared last month, Webvan recorded a loss of $109.1 million, compared with $56 million in the same period a year ago. Revenue for the fourth quarter was $84.2 million, up from $19.8 million in the year-ago quarter.
While it ended the fourth quarter last year with $212 million in cash, the company admits it may need $40 million to $60 million in extra funding by 2002.
Borders and his brother in the early 1970s founded Borders Books and Music, now the country's No. 2 bookstore chain after Barnes & Noble Inc. He went on to establish Webvan.com in 1996 as an online grocer and was chairman and president/CEO until September 1999. He remained chairman until Shaheen replaced him.
“He remains the biggest shareholder,” said Bud Grebey, vice president of corporate affairs at Webvan.
Grebey denied suggestions of a board putsch.
Webvan's board includes Shaheen and industry heavyweights such as Tim Koogle, chairman/CEO of Yahoo Inc.; Michael Moritz, general partner at Sequoia Capital; and Christos M. Cotsakos, chairman/CEO of E*Trade Group.
Also aboard are Mary Alice Taylor, former chairman/CEO of HomeGrocer.com, recently acquired by Webvan; and Jim Barksdale, partner at The Barksdale Group.
“We have a very active board of directors,” Grebey said. “They are very active and involved in supporting the business and providing strategic counsel. It is not an honorary board where people get together, want a recorder and that's it.”