Liquidator called in at Boo.com
KPMG has been appointed as liquidator for online retailer Boo.com, which last night admitted it only had $500,000 left in the bank and a cash burn rate of $1m per week.
When the company was set up by two Swedes, former model Kajsa Leander and chief executive Ernst Malmsten, it managed to raise $135m, making it one of the best-funded business-to-consumer dot.coms in Europe.
But from the outset Boo.com was plagued with problems. The hi-tech website that was to enable the company to sell in 18 international markets was five months late and when it did finally go live, it was criticised for being too slow.
The company soon became an easy target for dot.com critics who mocked the clothing styles and the decision to locate the customer support team in Carnaby Street.
In the last few days, despite a promising upturn in revenues, it became clear that Boo was in trouble. A rumoured sale came to nothing and the dot.com began hunting an additional $30m to sustain business. When it became clear that backers would no longer tolerate heavy losses, a liquidator was appointed.
Yesterday, professional services firm PwC warned that dot.coms were in danger of running out of money because of unsustainable cash burn rates. If analysts are to be believed, Boo.com could be the first in a number of high-profile casualties in the new economy.
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