BOSTON – Direct online marketer Egghead.com announced Wednesday that it has filed for Chapter 11 bankruptcy and will be selling its assets to retail chain Fry's Electronics.

Egghead, which sold technology and related products over the Internet, said it will continue operating under bankruptcy court supervision pending the close of the sale and that Fry's is then expected to operate the Egghead.com site. Any assets not acquired by Fry's will be sold under the court's supervision.

The Menlo Park, Calif.-based company said it laid off two-thirds of its staff and is keeping the remaining third to serve customers through the transition.

The decision to file for bankruptcy was prompted by "a dramatic and unexpected decline in sales" in recent weeks, Egghead.com Chief Executive Officer Jeff Sheahan said in a statement.

The transaction is expected to close by the end of September, the company said, subject to approval by the bankruptcy court.

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