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STREAMLINE HIRES BANK IN FUNDS SEARCH

WESTWOOD, Mass. -- Streamline.com here said it has hired an unnamed investment bank to explore strategic and financing alternatives.The announcement came as little surprise, said Barry Stouffer, a securities analyst for J.C. Bradford, Nashville, Tenn."They've been looking for financing for some time," Stouffer told SN. "The only real piece of news is that they've hired somebody to help them accomplish

WESTWOOD, Mass. -- Streamline.com here said it has hired an unnamed investment bank to explore strategic and financing alternatives.

The announcement came as little surprise, said Barry Stouffer, a securities analyst for J.C. Bradford, Nashville, Tenn.

"They've been looking for financing for some time," Stouffer told SN. "The only real piece of news is that they've hired somebody to help them accomplish that."

Streamline had approximately $21 million in cash April 1, the end of its fiscal first quarter, said Tim DeMello, chairman of Streamline. He added then that he was confident the Internet grocery-delivery company would receive additional financing shortly.

Availability of funding will be a major concern for Internet grocers, particularly in light of the stock performance of the sector's publicly traded companies, Stouffer said.

Along with Streamline, which was trading near a 52-week low of $2 last week, other companies -- including Webvan, Foster City, Calif.; Home Grocer, Kirkland, Wash.; and Peapod, Chicago -- were at or near historical lows, making additional funding through the capital markets prohibitively expensive.

Earlier this year, Peapod came close to ceasing operations and lost 80% of its stock value when a private-financing deal dissolved. Peapod eventually struck a deal with Dutch supermarket operator Ahold.

Peapod's funding needs were seen by some as typical of consumer-based e-tailers that have lost money and fallen out of favor with investors anxious to see profits. Barron's magazine in March ranked Peapod fourth among more than 200 Internet companies in danger of running through their cash in the shortest time frame. Streamline ranked 52nd on that list of potential "burn victims," which was based on fourth-quarter revenues, operating expenses and losses.

Streamline said in a statement that the type of transaction it would enter into, if any, was unknown. Stouffer said partnering with another Internet grocer would be unlikely because most have the same need for financing.

Ironically, the downturn in the market comes at a time when those companies are performing well, Stouffer added.

"The capital markets are different today than they were six months ago," he said. "But these guys are all executing on their plans. The business is doing better than ever."