RealTime IT News

Danish Investors Put Millions into Clothes Site

[London, ENGLAND] Undaunted by the recent collapse of online fashion house Boo.com, several Danish firms have pumped an additional $12 million into designer label factory outlet Haburi.com.

Among the backers are technology company Maersk Data A/S, department store operator Magasin and insurance company Tryg-Baltica, three prominent Danish businesses. Funding is also coming from Venture Partners, 2M Invest and UniInvest.

Haburi.com launched in April 2000 and has already been rolled out to 14 European countries. It sells designer labels at factory prices -- a business concept that rarely fails in the real world but has not been tested online in Europe in any major way until now.

Michael Vad, chief executive officer at Haburi.com, reported "an excellent start" and said both the technology and the supporting logistics had exceeded expectations. The number of customers making purchases had reached what he called "a satisfactory level at this stage."

"We are now ready to continue our expansion, first of all in the rest of Europe and then Eastern Europe in the autumn. This new cash flow is essential to our continued expansion," said Vad.

Among the backers, Magasin announced in May that it would launch Denmark's oldest department store on the Internet next year. Its support for Haburi.com is partly intended as a way of gaining online selling experience.

"Even though the business concepts are and always will be completely different, there is no doubt that we can learn a lot from each other both in the short term and the long term," said Magasin's Chief Executive Henrik Smith.

Each company, it appears, has a different reason for investing in Haburi.com. Maersk Data has done so because it expects to get a good return on its investment.

"Haburi.com has a strong concept and we believe that the launch was timed very well," commented Kenn Herskind, chief executive of Maersk Data's e-commerce division.

Michael Mathiesen, chief executive of 2M Invest is chairman of the board at Haburi.com. In April, Venture Partners, 2M Invest and UniInvest put in first round financing of around $6 million.