Egghead Software

Egghead, Inc.

Industry	Retail
Founded	1984 (1984)
Founder	Victor D. Alhadeff
Defunct	Template:End date and age
Fate	Bankruptcy; Domain name acquired by Amazon.com
Headquarters	Spokane
Products	Computer software

Egghead Software was a U.S.-based retailer specializing in computer software. Established in 1984, the company declared bankruptcy in 2001, after which its domain name was purchased by Amazon.com.

History

Victor D. Alhadeff founded Egghead in 1984, starting with a single outlet located in Bellevue, Washington. The business grew swiftly, and by June 1987, it operated 50 stores along the West Coast of the United States.

Egghead went public through an initial public offering in June 1988. However, within a year, its share price declined from $17 to $11 amid legal actions concerning nondisclosure of inventory and financial irregularities.

By the end of 1989, the chain had expanded to 206 stores but subsequently shut down 20 locations due to operational losses and inventory complications.

In June 1993, Egghead introduced its inaugural software product called Egghead Express, which allowed customers to place and manage orders online.

By 1995, the company relocated its headquarters from Issaquah, Washington to Spokane, employing approximately 2,500 people across retail outlets in 30 states.

Leadership transitions took place in 1996 when George Orban assumed the role of chairman and was appointed CEO in January 1997. During that year, Egghead divested its Corporate, Government & Education division to Software Spectrum for $45 million. The company's shares traded around $6 each amid rumors of potential acquisitions.

Confronted with financial difficulties, Egghead closed 77 of its remaining 156 stores early in 1997 and acquired rival Surplus Software Inc. for $31.5 million.

In January 1998, the company announced losses and decided to shut all remaining 80 physical stores to concentrate exclusively on online sales through Egghead.com. This announcement caused an 18% decrease in its stock price.

During the dot-com boom in July 1998, investor enthusiasm pushed Egghead's shares up to $25 as internet-based companies gained favor.

In 1999, Egghead merged with OnSale.com in a stock-for-stock transaction valued at $375 million. The combined entity continued operating under the Egghead.com brand with OnSale's CEO Jerry Kaplan leading as chief executive officer.

In December 2000, shortly before the holiday season, Egghead experienced a security breach that compromised servers and potentially exposed credit card information belonging to over 3.7 million customers. After initial denials, Visa and other banks were informed; numerous credit cards were subsequently canceled amid public concern. Subsequent investigations determined that no actual credit card data had been stolen.

Egghead filed for bankruptcy in August 2001. An attempted purchase by Fry's Electronics collapsed due to disagreements over financial disclosures. By December that year, Amazon.com had acquired the Egghead.com domain name.