This article was originally published in The Rose Sheet
Relocation of e-tailer to Memphis, Tenn. from San Francisco will help reduce PlanetRx' cash-burn rate by 50%, the company maintains Aug. 28. PlanetRx notes 75% of its current employee base already is located in its Memphis-based 175,000 sq. ft. center. In consolidating operations, the e-tailer expects to "eliminate redundancies," reduce operating expenses and lower consumer acquisition costs. In June, PlanetRx announced a 15% workforce cut and a reduction in ad spending (1"The Rose Sheet" June 26, In Brief). The company also names John McAlpin to president and chief operating officer, succeeding Michael Beindorff. McAlpin joined PlanetRx in 1998 as senior VP-distribution services
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Cost-saving measures include layoffs of 70 employees (15% of total workforce), evenly split between online drugstore's San Francisco headquarters and Memphis distribution center, as well as reductions in ad spending. PlanetRx.com, which now has approximately 380 employees, plans no further staff cuts. The e-tailer says it is moving toward meeting its goal of total cash expenditure reduction of 8%-12%, announced at the end of the first quarter. Second quarter revenues are expected to total $9 mil., less than previous projections. Also, Chief Technology Officer James Chong has resigned and will not be replaced. PlanetRx has retained Goldman, Sachs to review strategic options
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