Internetshop's Losses Doubled in the Past Year
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[Berlin, GERMANY] Internetshop, a Jena-based software provider, saw its losses more than double in the past year. The company reported Wednesday in Frankfurt on Main that their net loss was 39.3 million euro (76.9 million German marks). This is a deficit increase of over 113 percent compared with 1999, when the deficit of the e-commerce systems provider amounted to 18.4 million euro (around 36 million marks). For the coming year, financial manager Wilfried Beeck expects "a loss on last year's scale".
Stephan Schambach, Internetshop's chairman of the board, said he was convinced that the Enfinity product will put them in a very good position for the long term. "But we have to take greater advantage of this market position," said Schambach.
In the fourth quarter, new customers such as Nextra, Pechiney, Tele Danmark, American Express UK, and Compaq Computer Japan chose Internetshop as their platform. "Despite many new customers, the fourth quarter ended very disappointingly compared with our expectations. While we saw a considerable sales increase of 12 percent to 24.7 million euro compared to the third quarter in our European home market, we had to accept big losses in America," Schambach said.
The slowdown in sales in America can be traced back to two main factors. The first is that numerous orders that were expected towards the end of the fourth quarter were temporarily postponed by customers expecting a slowdown in the US economy. The second factor that had a negative influence on growth was the weak market penetration in the USA.
As for his company's perspectives, Schambach said that the reaction to this will be a reorganization of US business operations. There will be a focus on selected B2B markets where Internetshop has a competitive advantage. An example of this is "supplier enablement", which enables suppliers to sell their products through electronic marketplaces and trade platforms. Partnership with CommerceOne is an important prerequisite. Due to a "company-wide restructuring program", around 200 jobs will be cut throughout the company in January.