Kozmo dumps Houston and San Diego

Silicon Alley delivery dotcom Kozmo has ditched its Houston and San Diego businesses and cut around five per cent of workers.

The company said the service, which delivers products such as tobacco, food, videos and medicine ordered through its Website to customers in one hour, failed to take off in these two cities. The move results in around 120 staff cuts at the three-year-old company.

Last June Kozmo ditched plans to IPO and cut 3,000 staff. Talks to buy rival Urbanfetch also fell through in October - days later Urbanfetch abandoned its consumer online delivery service to focus solely on what it said was the more lucrative corporate delivery business.

"We're no different to any traditional retailer," a representative told The Register today. "We are constantly evaluating our markets."

She added that Kozmo's top markets were currently New York and Seattle, followed by San Francisco, Boston and Washington. The company now operates in nine cities.

Its largest selling items have changed from entertainment to food, and its average order has risen to $30 - from $10 at this time last year. It also expects to announce details of its next round of investment within the next month.

Kozmo claims to serve 400,000 punters either too lazy or too busy to go out and shop. ®

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