Another once-hot Pan-European Web merchant is on the verge of bankruptcy. Letsbuyit.com, a British-Swedish enterprise headquartered in Amsterdam, has effectively stopped operating and has gone into receivership.
The company had 1.1 million customers in 14 countries, including the United Kingdom, Germany and France, and was listed on Frankfurt's new market. It specialized in “co-shopping” — group buying of products to achieve maximum discounts.
Letsbuyit.com launched in Sweden in April 1999 and had a difficult initial public offering on the Frankfurt market last July, when its shares were sold for 3.50 euros. They had tanked to 40 euro cents when the company went into receivership.
In November, the company tried and failed to raise additional capital of 80 million euros (about $70 million at the time, when the dollar was higher). It lost 26 million euros and 42 million euros, respectively, in the second and third quarters last year.
This is the third Internet company that tried a Pan-European launch from a Swedish base and failed. Boo.com went out of business in May (and has re-emerged as a fashion advisory site), while apparel merchant Dressmart collapsed in August.
The Amsterdam District Court gave Letsbuyit.com protection from its creditors just before the new year and appointed a Dutch law firm as administrators. Management resigned Jan. 3 when John Palmer, a founder, was named temporary CEO.
Palmer and the administrators will look for new financing in the next four weeks with a view to “resuming sales as of the earliest possible date,” according to a press statement on its Web site. Analysts do not think the company has much of a shot at new money.