FOSTER CITY, Calif. -- Deloitte & Touche, New York, said it questions the ability of Webvan here to continue operations through the fourth quarter of this year, the accounting firm noted in a filing last week with the Securities and Exchange Commission.
y also face delisting from the Nasdaq board, as its price has been under Nasdaq's one dollar-minimum for weeks.
The SEC filing said Webvan must increase its customer base, increase the number of orders from repeat customers and continue to improve operating efficiencies in order to realize profitability.
Webvan's distribution facilities are not operating near their capacities, according to the filing. It noted, "Webvan cannot assure that any facility will ever operate at or near its designed capacity."
The filing also said the short lifespan of the company makes it difficult to predict future results or growth.
"Webvan cannot assure that it can achieve or sustain revenue growth or profitability," the filing said.
It added that the company may be forced to cut corporate staff and close some facilities if additional funding is not secured.
Last month, Webvan closed its Dallas operations and announced it would not be entering any new markets. The company had originally intended to expand into Baltimore/Washington and northern New Jersey this year, but canceled those plans in January.
Charles Lemos, associate analyst with Deutsche Banc Alex. Brown, told SN, "A lot has to happen for an e-tailer to make it in grocery, and unfortunately it isn't working out for Webvan.
"There were a lot of logistical missteps along the way for Webvan, like acquiring HomeGrocer.com when they did. They probably should have waited a little down the line and paid much less."
However, despite the company's financial challenges, Lemos said those Webvan customers he has interviewed were quite happy with the service.
