boo.com

"Three days later, on Monday, 17 January, we delivered our estimated cost reductions to the board. Over the next year our proposed cutbacks would save us $27 million. In total, 131 staff would lose their jobs. Besides Boom, most of the job cuts would be made by scaling down the customer service teams and streamlining the local offices. The figure represented over a quarter of boo.com’s total workforce. The meeting went better than we could have expected. The board approved our restructuring plan and also J.P. Morgan’s revised funding strategy: the bank now planned to raise $50 million from new and existing shareholders and then go straight to an IPO in the second quarter. We had come through yet another crisis, but it was impossible to feel happy. As the meeting broke up and our board members rushed off to catch their planes, I thought: This is the day that we lost our innocence."

"Then, in the afternoon, I received a call from Rory O'Sullivan, head of Robertson Stephens’s internet division in Europe. He must have received his copy of the memorandum, I thought. In the past few days he had been so friendly and helpful that in my buoyant mood I half imagined that he had rung up to congratulate us. But now his voice was sombre. ‘Hi, Ernst,’ he said. ‘I’m afraid we've got some bad news.’ ‘Oh?’ ‘We've decided that we’re not prepared to go ahead. We feel very uncomfortable about the idea of an IPO in the second quarter. It’s too early.’ In my brief tenure as CEO of boo.com there had been many shocks, but this one was off the scale. “What’s the problem?’ I asked. ‘Basically, our retail analyst, Lauren Cooks Levitan, doesn’t think institutional investors will go for it yet,’ O’Sullivan said. ‘She thinks you need more revenue momentum. There has to be strong evidence that your sales are growing at a steady rate and that the business model is actually working.’ Cooks Levitan also felt that before proceeding with a pre-IPO round, we needed to sign some more big suppliers and Dean Hawkins, who was due to begin as our new CFO at the beginning of February, needed to be fully integrated into the business for at least a couple of months. ‘We're really sorry,’ said O’Sullivan, “but this process is analyst-led and we can’t move forward if she doesn’t support it.’ ‘Look, we’ve got to talk to her,’ I said, still having trouble believing what I was hearing. ‘Can’t you set up a meeting? She hasn’t even spoken to us yet.’ ‘Sure. I can do that, but I don’t think it will make a lot of difference.’"

"Ernst Malmsten and Kajsa Leander, joint founders and major shareholders of boo.com, the active streetwear online retailer, have issued the following personal statement: We are deeply disappointed that it has been necessary to ask KPMG to become liquidators of the company. ‘The senior management of boo.com has made strenuous efforts over the last few weeks to raise the additional funds that would have allowed the company to go forward with a clear plan. This plan involved a restructuring of the retail operations, the development of an e-fulfilment business using our unique advanced technology and operations platform, and _ the identification of strategic partners. It is disappointing to both the management and staff alike that we were not able to bring this plan to fruition particularly against the background of steadily- improved trading. Tt will be of little consolation to our staff, but we wish to thank them for their fortitude, patience and commitment. They have had to endure weeks of media speculation about the"

"- Yet for all the euphoria, there was a realization that implementing it would involve more pain for the company than ever before. What was the absolute minimum required to run the two companies? This was the unpalatable question that provided the starting point for our discussions. If our plan was to be attractive to investors, then both new companies would need to be pared to the bone. boo.com, the international retailer, for example, would sell in eighteen countries but operate from a single London office."

"Finally, at 3.21 p.m., after repeated calls to the customer service centre, he received confirmation of his order: ‘Eighty-one minutes to pay too much money for a pair of shoes that I’m still going to have to wait a week to get? The first time I wrote about boo.com, everyone wanted to know what the name meant. Now I know: It’s the sound a reviewer makes.’ Et tu, Brute, 1 found myself thinking as I read the piece. The first time James Ledbetter wrote about boo.com he had noted, correctly, that we were ‘adamant about not being a “discount” site’. But now"

"business and had continued to apply themselves with great enthusiasm despite these adverse circumstances. Recognition should also go to our suppliers who have maintained their support for us throughout this difficult period. We thank them for this. “We believe very strongly that in boo.com there is a formula for a successful business and fervently hope that those who are now responsible for dealing with the company will be able to recognize this.’"