Reseller eXpansys has vowed to lead consolidation of the fragmented e-tail landscape after announcing plans to float on the Alternative Investment Market (AIM).

The Manchester-based online VAR, which draws in 400,000 separate visitors a day onto its 50 web sites, is aiming to raise £10m when it goes public in early April.

Roger Butterworth, chief executive of eXpansys, said: “This is the most cost-effective way to raise money to improve the value of our balance sheet and allow the business to grow.”

Butterworth stressed his priority was to acquire similar firms operating in the mobile phone and PDA arena either in the UK or overseas. It drew 53 per cent of its £54m turnover in 2006 from outside the UK.

The announcement comes just months after privately-held eXpansys reached an out of court settlement with Hewlett-Packard over grey market trading.

Jonathan Wall, marketing director at rival e-tailer dabs.com, a division of BT, said: “We regard eXpansys as a good competitor in niche markets such as mobile phones and PDAs. Whether it can be successful in a wider range of products such as printers and laptops – which is where the real money is – remains to be seen.”

The VAR’s flotation plans come hot on the heels of the demise of online resellers Savastore (part of Watford Electronics) in February and Excite IT in December.

Butterworth agreed that the e-tail sector was “shaking down”, but argued recent casualties only had themselves to blame.

“E-tailers need to be good at a couple of things to succeed,” he said. “Cost control is very important. Firms must also avoid outsourcing core parts of their business such as warehousing, where other players have suffered.”

Wall said: “It’s a good time for online resellers to acquire because there are several players teetering on the brink of extinction.”

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