The ailing dotcom sector was rocked yesterday by news that London-based Boo.com, the largest internet retail funding ever in Europe, has been put into liquidation by its shareholders.
Launched just six months ago amid a fanfare of publicity, Boo boasted it would become the world's "first truly online retailer of sportswear and fashion". However, dogged by stock and technical problems from the very outset, it yesterday collapsed through lack of funds. Despite rising sales, appeals to investors to raise an additional $30m (£20m) in funding went unheeded.
At the core of Boo’s failure was its inability to win enough paying customers to offset its massive set-up costs. Three hundred staff will lose their jobs: 200 at the Carnaby Street, London, HQ; the remainder in offices in Stockholm, Paris, New York and Munich.
Initially, the venture was munificently funded, a range of high profile shareholders – including French millionaire entrepreneur Bernard Arnault, Benetton and investment banks J P Morgan and Goldman Sachs – between them stumped-up $120m (£80m).
News of the collapse follows hard on the heels of a study published yesterday by accountants PricewaterhouseCoopers [WAMN, 17-May-00], which revealed that one in four or all dotcoms recently floated in London is in danger of running out of cash
News source: BBC Online Business News (UK)