The European internet retailer LetsBuyIt.com announced on Friday
29th December that it has stopped taking customer orders and a
Dutch court has granted it a suspension of debt repayments. The
news caused a slump in the value of the company’s shares which are
listed on the German Neuer Markt stock exchange. Trade in the
shares was suspended.
LetsBuyIt.com operates what it calls a “co-buying” business
model. The company negotiates discounts with suppliers or
manufacturers which are proportional to the number of buyers it can
attract on its site. Items are posted for sale with a price which
reduces over a buying period as the number of users who choose the
same item increases. Since its launch, over one million users have
registered and 450,000 products have been sold in 14 countries. The
company was incorporated in the Netherlands, is managed in the UK
and makes more than 50% of its sales in Germany.
LetsBuyIt.com's chief executive has said that his company is in
talks with potential investors to raise the funds needed to reach
profitability, estimated at around £51 million. With funding,
profitability is forecast for 2002. Without new cash, analysts say
the company will be unable to continue beyond the middle of this
year.
