INTERNATIONAL BUSINESS; Boo.com, Online Fashion Retailer, Goes Out of Business By ANDREW ROSS SORKIN
Published: May 19, 2000
It was supposed to follow the dot-com fairy tale script. Two young entrepreneurs devise an idea for the next big e-commerce Web site, raise enormous sums of cash, spend lavishly on advertising, lose money on every sale, take the company public and make every employee a billionaire. Today, Boo.com, a European fashion e-tailer backed by the French luxury goods magnate Bernard Arnault, the Benetton family, Goldman, Sachs & Company and J. P. Morgan, among others, is insolvent and has been forced to call the liquidators, six months after its Internet debut. The concept for Boo.com seemed plausible enough. Ernst Malmsten and Kajsa Leander, two 29-year-old Swedes, founded Boo.com here in 1998, planning to create an online fashion retailer that would provide global service in seven languages and multiple currencies. And, of course, the site would use the most advanced technology. Boo.com bragged of its ability to let users view products in three dimensions from 360 degrees, giving them a true sense of how a garment looked.
Investors were so taken with the idea and its two founders -- Ms. Leander had been an Elite model and both had started an online bookstore called Bokus.com -- that Boo.com was able raise $125 million almost immediately from an elite roster of the extremely wealthy. Before even starting Boo.com, the founders promoted the site in trade journals and glossy fashion magazines. But it was also clear that the founders were excessively ambitious. The company established its headquarters on swanky Carnaby Street in London, with satellite offices in New York, Paris, Stockholm, Amsterdam and Munich. The staff expanded from 40 initially to more than 400. Employees routinely flew first class and stayed in five-star hotels, according to a former staff member. Many were given laptops and Palm Pilots for home use, according to this...
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