Boo.com, one of Europe's highest profile online retailers, has gone into liquidation after failing to secure the additional $30m of funding needed to continue trading.
The retailer was launched simultaneously in several European countries last year, with $120m of funding from investors, including a branch of Italian fashion giant Benetton, with the aim of selling sports and leisurewear in 18 international markets.
A five-month delay in the launching of the jazzy, but bandwidth-hungry, Boo.com website, and an expensive overhead of five offices and over 300 staff, are being cited as the main reasons for Boo.com's failure. "We wanted everything to be perfect and we have not had control of costs," said Boo.com co-founder Ernst Malmsen.
Some analysts, however, believe that inconsistent management direction is equally at fault. "Between interviews, Boo.com's media-friendly leaders, Ernst Malmsen and Kasja Leander, steered the firm through several rapid about-faces," said Dr Therese Torris of Forrester Research.
"Originally positioned as a lifestyle site competing on premium brand selection and not on price, the site switched to offering 40 per cent discounts by January. And although the site revelled in rich content and rich media at launch, by April it had ditched its fashion newsletter, gagged virtual assistant Ms Boo, and launched paper catalogues as a low-tech alternative to its three-dimensional product presentation online," she added.
The company had employed the 300 staff in offices in London, Stockholm, Munich, Paris, Amsterdam and New York. A wave of cost-cutting saw the shedding of 90 workers this January, and by yesterday afternoon at the company's London offices, less than 30 staff remained waiting to hear whether last minute attempts to secure funding had been successful.
However, despite being able to point to rising sales and promising to introduce a radical restructuring, including office closures and mass redundancies, what remained of the sportswear vendor's management team failed to win over potential investors, who were unconvinced that the promised savings would make the company viable.
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