Natural Wonders Inc., the new owner of World of Science Inc., has closed its local Internet division and filed for bankruptcy.
The Internet operation, which was expected to provide the e-commerce service worldwide for the California-based company, employed 14 workers. It was the last remaining corporate operation of the once-thriving local science retailer.
On Dec. 17, Natural Wonders, citing weak holiday sales as a main reason, filed for protection through a Chapter 11 proceeding in U.S. Bankruptcy Court in Oakland, Calif.
The science and nature products retailer based in Fremont, Calif., bought World of Science for $5.45 million in September.
By Jan. 4, Natural Wonders’ Internet division will move to Louisville, Ky., where the firm’s corporate offices moved several months ago, said Joe Reed, vice president of IT at Natural Wonders.
Natural Wonders is consolidating office sites to cut costs, Reed said.
Three months ago, 60 of the some 90 local employees that worked at World of Science’s corporate office and warehouse lost their jobs.
The decision to file for Chapter 11 came when Natural Wonders started to evaluate alternatives after seeing disappointing overall holiday retail season sales, said Peter Hanelt, CEO and chief financial officer.
“We were unable to work out an alternative with our secured lenders quickly enough to protect the other constituencies of the company, including our shareholders, employees, vendors, and landlords,” Hanelt said.
Last month, Natural Wonders said its third-quarter losses increased nearly 25 percent to $4.86 million. That prompted the company to file for bankruptcy court protection.
“We are having similar results and impact as retail sales nationwide,” Reed said.
The company operated 309 stores as of Dec. 17 with more than 4,000 employees. Filing for protection from creditors would help it reorganize and continue operating, company officials said.
“Over the coming months, we envision operating our successful stores with minimal disruption from the filing, while allowing us to make changes and position the company to be stronger long term in the nature and science gifting retail category,” Hanelt said.
Company leaders are optimistic about the future for the company’s Internet division.
The firm’s Internet sales equals the combined revenues from roughly four stores, Reed said.
“This year’s Internet sales are drastically improved over last year’s year-to-date figures,” Reed said.
With the closing of the Internet operations here, Natural Wonders has put all of its local warehouse and corporate office space-totaling 142,000 square feet in two facilities-on the market.
One building is at 900 Jefferson Road which is being brokered exclusively through NAI/Pyramid Brokerage Co. Inc. The other facility, at 200 Mushroom Blvd., served as the company’s distribution center and is 110,000 square feet.
World of Science was founded here in 1969, primarily as a manufacturer of science kits. It opened its first retail store in 1984 at the Rochester Museum & Science Center.
Roughly 25 staffers continue to operate the local World of Science stores.
The company went public in July 1997 with an initial offering price of $6 a share and in the past year, the stock traded as low as 50 cents.
For the fiscal year ended last January, World of Science reported $61.1 million in sales. But the company also reported its first loss after a quarter-century of profits.
The 13-year-old Natural Wonders saw its sales dip 1.8 percent in fiscal 1999 to $147 million. The company also posted a net loss for the year of $8.5 million, compared with a $1.9 million loss in fiscal 1998. Natural Wonders was last in the black in fiscal 1997, with a $1.4 million profit.
Last week Natural Wonders’ ticker symbol on NASDAQ changed from NATW to NATWQ, and trading was halted until the company satisfies NASDAQ’s request for additional information.