The company’s back-office technology, including the software that powered the much-criticised website, has been sold to e-commerce solutions provider Bright Station.
Formed 15 years ago, Bright Station has developed and funded a range of internet services including search engine WebTop.com and online office supplier OfficeShopper.com. It has bought boo.com’s back-office technology, including the software that powered the much-criticised website.
An announcement regarding sale of the remaining elements of the business, including the boo.com brand and the website, is expected shortly.
Upon appointment as liquidator, business recovery partner Mike McLoughlin was keen to emphasise the strength of the dot.com’s infrastructure. He also gave potential buyers just 24 hours to pay a refundable deposit of £1m.
But today’s sale, which is rumoured to be worth only £1/4m, is likely to fall well short of the £25m owed to external creditors, mainly in the marketing and delivery and service sectors.
Responding to comments that the demand for £1m may have frightened off buyers, a spokesperson for KPMG told AccountancyAge.com that the move meant only serious buyers were left in the hunt.
‘It was a critical situation,’ he said. ‘With more than 30 interested parties it was essential we separated the wheat from the chaff.’
When the boo.com 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. The company spent six months in search of a financial director and when they did get one – Dean Hawkins from Adidas – he left after only two months.
This dealt a blow to boo’s financial credibility which proved to be their undoing. 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, liquidators were appointed.
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