The news follows reports that Urbanfetch was in negotiationswith Kozmo.com, its only competition, to merge. Kozmo reportedlyabandoned plans to acquire the company they once sued for stealingits business plans because of weak finances. While Kozmo claims tohave adequate financial backing from various investors, Urbanfetchwas suffering from a lack of capital. Now it is slashing prices onexisting merchandise and requiring a $60 minimum order fordelivery. It will move out of their corporate offices at 538Broadway and its warehouse at 560 W. 34th St. About 160 employeeswill be laid off, 60 of them in the London satellite operation.

Urbanfetch Express, the recently developed courier service willremain, but will not operate through the Web site, which will beshut down when the last of the inventory is sold. The courierservice is now contracted to work with Ernst & Young,Pricewaterhouse Coopers and Condé Nast, among others.

Kozmo.com is now the only online delivery service in New YorkCity. Joseph Park founded Kozmo in 1998, prior to Urbanfetch'slaunch in 1999, making home base here. Distribution centers in NewYork, Boston, Washington, DC, Atlanta, Houston, San Diego, LosAngeles, Portland and Seattle allow users there to have goodsbrought to them by bike, car or van within an hour. Real timeinventories by zip code allow for buying items available in thatwarehouse then. Delivery staffers pick up items stored on shelvesor in a giant refrigerator and use a digital map to find theirdestination. Kozmo announces on its site that it will beginoffering users anywhere the ability to "Kozmo someone a gift" toone of the cities listed above.