Gazoontite asks investors to cough up vital cash

Gazoontite.com, one of the first pure Internet retailers to open brick-and-mortar stores, is trying to avert a financial crisis that could halt operations as early as next week, sources close to the company said.

Gazoontite executives are scurrying to raise money and are in talks today with former investors and potential new ones, sources said. The company sells asthma and allergy-relief products.

"As always, Gazoontite continues to explore all options to best serve our customers and investors," said Gazoontite chief executive Daniel Korn. "We are in active discussion with our investors to further our vision for both the traditional retail and e-commerce sides of our business."

Korn declined to detail Gazoontite's financial situation or its negotiations with investors.

Since March, when technology stocks began to lose their value, the investment community has greeted e-commerce companies like pariahs. Most Internet companies that burned through their cash have since struggled to find new backing. As a result, many have been forced to close or to lay off large numbers of workers.

Last month, Gazoontite, based in San Francisco, laid off about 50 workers, or 41 percent of its staff, as the company restructured its business. The company also decided to devote more of its resources to its brick-and-mortar operations. Korn, a former chief executive at two other retailers, including one online company, was brought in to replace founder and former chief executive Soon Chart Yu.

Gazoontite garnered headlines last year for being among the first to break ranks with pure Internet retailers and to adopt an offline strategy. The company opened its first store in San Francisco in May of last year and has since opened other stores in Chicago, Los Angeles and New York.