Amazon Closing Down Money-Losing Quidsi Division

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Amazon will be closing all the sites operated by its Quidsi division, as they are not profitable. The e-commerce giant confirmed to Bloomberg that it will shut down Diapers.com and other Quidsi websites.

Amazon tried its best to keep Quidsi running

On Wednesday, the e-commerce giant said it is closing down Quidsi, which it bought for $545 million in November 2010. This division included flagship brands like Diapers.com, Soap.com and BeautyBar.com. The e-commerce giant bought Quidsi after it rose to prominence for shipping soap, diapers and other household staples largely for free.

Over the past several years, Amazon has invested a lot of money and time into Quidsi’s business to increase profitability. The e-commerce giant even brought the individual sites to mobile devices and launched new brands like green grocer VineMarket.com. However, Amazon did not see much profit in the division, despite running it for several years.

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An Amazon spokeswoman said, “We have worked extremely hard for the past seven years to get Quidsi to be profitable, and unfortunately we have not been able to do so. Quidsi has a great brand expertise and they will continue to offer selection on Amazon.com.”

Further, she said that the division’s software team will be transferred to AmazonFresh, the U.S.-based online retailer’s grocery business.

Quidsi shutdown to affect over 250 employees

According to documents filed with the New Jersey Department of Labor, over 263 employees will lose their jobs at Quidsi’s Jersey City headquarters. Bloomberg notes that only some of the employees will be able to work for Amazon.com. Currently, the online retail giant has announced no official date to shut down the division, and it looks like consumers have not been notified yet.

“It is likely that Prime has grown to the point where members no longer separately shop on Diapers.com or Soap.com so maintenance of separate product-specific sites makes less sense,” said Michael Pachter of Wedbush Securities.

Quidsi was originally co-founded by Marc Lore, who worked with the unit for about three years after the e-commerce giant acquired it. Lore later started another e-commerce startup dubbed Jet.com, which was bought by Wal-Mart Stores in 2016 for $3.3 billion. Currently, Lore is heading Wal-Mart’s U.S. online operations, notes MarketWatch.

On Wednesday, Amazon shares closed up 2.14% at $874.32. Year to date, the stock is up almost 17%, while in the last year, it is up almost 50%. The stock has a 52-week high of $786.44 and a 52-week low of $585.25.