[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.
