Let's Leg It, Says Management Team
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[London, ENGLAND] The management team at troubled European online retailer Letsbuyit.com has resigned, despite having won a moratorium on debt payments.
Late on Wednesday, members of the management team led by Chief Executive Martin Coles tendered their resignations. The company, which is seeking US $75 million to emerge from administration and continue business, is now being run by John Palmer, its founder.
Last week, Letsbuyit.com sought temporary protection from creditors by applying to the courts in Amsterdam for a moratorium on its debts -- a wish that was immediately granted.
Now the company appears to be in deeper trouble. Its share price slumped early this week on the the Neuer Markt in Frankfurt by 53 percent -- although it rose along with all the others in the wake of the U.S. interest rate cut.
Letsbuyit has recently been hailed by experts as a good idea in need of a lot more cash than the investors were originally prepared to offer. One observer suggested that it would have needed at least US $150 million to become properly established.
The idea behind Letsbuyit is simply that of "aggregation" -- of using the Internet to bring together people who wish to purchase the same item, then buy it in bulk at a cheaper price. However, the logistics of such an operation are not as straightforward as they first appear.
Letsbuyit raised over US $50 million at its flotation, but has spent over US $25 during the last three months and now has just US $12 left.
According to a statement from Letsbuyit issued late Wednesday, the company will continue to seek further investment. In the meantime its site is still online, but taking no further orders.