London-based online vendor of fashion and sporting apparel and accessories, which staged a massively hyped launch last year as one of the first global online retailers, is up for sale after disillusioned shareholders (including French entrepreneur Bernard Arnault and US investment bankers J P Morgan and Goldman Sachs) decided there was scant prospect of raising additional funds.

Their decision demonstrates investors’ mounting impatience of the turbulence experienced by once highflying dotcom stocks. It also suggests that European internet companies may no longer be able to count on the public market to fund their ambitious expansion plans.

Comments a London technology analyst with Germany's Deutsche Bank, Michael Wand: "This is just the beginning. There are lots of people who have burnt a lot of cash and who haven't achieved their expected sales".

Last year raised some £70 million ($109.1 million) in venture capital, at that time the largest private fund raising in Europe. It already is running short of cash, after a massive ad campaign backing the global launch of its service.

Neither, its investors or advisers were willing to comment publicly, although shareholders expressed concern at the speed at which funds were being consumed – some analysts estimate the company has spent more than half its start-up capital of £70m in just a few months. Around €25 million has gone on advertising in movie theaters, prime-time television and over 50 publications, including Elle and Rolling Stone.

Potential buyers could include sporting-apparel makers or retailing groups seeking a quick global presence, say industry observers. US-based internet companies anxious to boost their presence in Europe also are thought to be possible buyers.

Wall Street Journal