Why Isis Parenting suddenly went out of business

January 15, 2014, 10:52 PM UTC

FORTUNE — For the past decade, Isis Parenting has been a refuge for new and expectant mothers in Boston, Atlanta and Dallas — offering education, companionship and all sorts of retail goods. But this morning the company announced that all of its 13 centers are closing immediately, stunning its clients (hundreds of whom have taken to Facebook to express their sadness and grief). No explanation for the shutdown was provided.

So what happened?

In short, Isis isn’t going out of business because it failed its customers. Isis is going out of business because it didn’t work as… well, as a business.

“The company has been struggling for the past two of three years,” says a source close to the situation. “And it had a bad holiday retail season, which really pushed it over the edge…. The CEO is exceptional and tried everything she could, but investors were pretty deep into this, so there was no attempt to recapitalize.”

At issue was that Isis was catering to a very small niche, and one that was not likely to create long-term repeat business. While new mothers were likely to take all sorts of classes (both pre-natal and post-natal), they were less likely to utilize such services for second or third children. Moreover, they also didn’t need to shop Isis retail next time around. Not only because of ever-present hand-me-downs, but because they already knew what was needed and had easier ways to purchase.

“Making a go of brick-and-mortar in maternity is extremely difficult right now, particularly because of Amazon (AMZN),” the source said. “Twenty years ago, or even 10 years ago when Isis was starting, this could work. Now I’m not sure it can. Even Babies”R”Us — which is catering to a less affluent population than Isis — is having some troubles.”

Isis also didn’t manufacture its own branded product lines, unlike larger rival Destination Maternity (DEST).

According to SEC records, Isis had raised over $8 million in venture capital and debt funding, from such firms as Affinity Capital Management and Coppermine Capital.

Fortune did attempt to reach Isis for comment, but no one was picking up phones at its headquarters. We also left a message on the voicemail for CEO Heather Coughlin, and will update this post if she responds.

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