Subsequent Events Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

11. Subsequent Events

On October 23, 2014, the Company committed to a plan to cease operations at its warehouse in Redding, California. The Company informed the impacted employees on this date, and the process of the warehouse closure is expected to be completed by the end of the first quarter of 2015.

Approximately 72 full-time employees and 39 part-time employees will be impacted as a result of this restructuring plan. The plan is expected to reduce operating costs by approximately $6.0 million to $7.0 million, annually. The Company estimates that gross profit from the current eCommerce operation would have been approximately $5.0 million in 2015.

The Company estimates that it will incur pre-tax costs between $2.5 million to $3.5 million during the fourth quarter of 2014 and the first quarter of 2015. The costs to be incurred relate primarily to severance, asset impairment, accelerated lease expense and disposal costs related to the warehouse closure. Approximately $1.0 million to $1.5 million of these charges are expected to be made in cash.

On November 4, 2014, the Company determined to exit the Company's Ijie operations in China by the end of the year. Cost information regarding this exit will be disclosed once determined. In connection with the Company's decision to exit its Ijie operations in China by the end of the year, David Liu, the Company's Co-Founder and executive officer in charge of Ijie, announced that he would cease to serve as an executive officer of the Company in connection with the exit of those operations.