Dot-com delivery service Kozmo ran out of fuel Monday, ceasing all operations and firing all of its nearly 1,100 employees, including 71 workers in the Washington, D.C. area.

The NewYork-based company, which began delivering to Georgetown students in fall 1999, cited a $280 million loss, poor management decisions and declining profitability for its sudden and unexpected closing.

“Given more time and more hospitable market conditions, Kozmo would have succeeded in rounding the corner and would have continued to grow,” Kozmo President and CEO Gerry Burdo said in a statement issued last week. “Some decisions made early in the company’s development combined with current market conditions prevented Kozmo from overcoming the challenges associated with conquering the last mile.”

The statement emphasized that Kozmo was not declaring bankruptcy, but that it was liquidating its assets and would use the money to pay its creditors and pay severances to its employees.

Kozmo’s closing may not be such bad news for Georgetown students who frequently used the service, and presents a great opportunity for Movie Mayhem, according to Dominic Ambrosio (COL ’02).

“We’re looking forward to an increase in business,” Ambrosio, the director of the Students of Georgetown Inc.’s video rental store, said.

The Corp considered a delivery service, according to board member Roger Gill (MSB ’02), but “any way you worked the numbers, it just wouldn’t have worked.”

Ambrosio said that Movie Mahem would need to double its staff before it could consider delivering movies, and cited Kosmo’s demise as a barrier to begin a service. He did say that the store is starting to expand its more than 2,000-title selection and may install drop boxes at different campus locations to help increase operations.

Kozmo’s closing came unexpectedly as the company reported increasing sales and membership. Company figures showed membership more than doubled last year from 150,000 to 400,000, and the total amount per order almost tripled to $25. Kozmo even reported profits in December in three of its nine markets. Boston, New York and San Francisco, also unexpected in a declining dot-com market. The company also had services in the Atlanta, Chicago, Los Angeles, Portland, Ore. and Seattle markets aside from their Washington, D.C. operation.

Originally the company rented only movies to D.C.-area customers when it opened its warehouse on 14th and S Streets N.W., but it expanded to sell almost any product found in a grocery store and even limited take-out food items. The company was planning on expanding service to 30 new markets and selling stock in an initial public offering in the next few months. Kozmo called off negotiations with coffee giant Starbucks to place drop boxes in every store just last week, after nearly sealing a deal.

Kozmo’s time in the district was neither purely profitable nor without controversy. Area residents filed a class-action lawsuit last year accusing Kozmo of not delivering to district neighborhoods with higher in minority demographics, particularly in predominantly black neighborhood areas. Company officials did not mention the lawsuit in their statement, and calls placed to the customer service line went unanswered.

Kozmo shut down its Web site last Thursday but left a single Web page instructing customers to return rented items to drop boxes by onday of this week. The portion of the site that identified drop box locations was shut down with the rest of the site last Thursday.

Kozmo was one of a handful of Internet-based delivery firms and follows in the footsteps of competitor Urbanfetch.com, which closed in October 2000. Some delivery service companies such as Southern California-based convenience service PDQuick, online grocers HomeRuns.com, Peapod.com and WebVan.com are still surviving, but many are close to failing because of the recession.