The US-based on-line toy retailer eToys has announced that it is
pulling the plug on its UK operation later this month and is
abandoning plans to expand into the French and German markets. The
UK subsidiary employs 74 staff.
The UK subsidiary employs 74 staff in its London, Swindon and
Belgium offices, most of whom will be laid off this month, the
remainder staying on to wind down the company.
The eToys.co.uk home page today shows the children’s TV
character Bob the Builder with the message: “Can we fix it? No we
can’t! Sadly, eToys packs up its toy chest on January 19th, but to
thank you for all your custom, we’re offering 50% off the original
price of all stock!”
Another notice on the site explains,
“eToys.co.uk has performed really well,
quickly becoming the number one retailer of children's products in
the UK. But unfortunately, the disappointing recent performance of
the company as a whole and the negative capital market conditions
have forced us to close down.”
Etoys.com was rated the second most popular shopping site in the
US over the Christmas sales period, beaten only by Amazon.com.
However, sales were around 50% weaker than expected and the
loss-making US company is reported to be fast running out of
cash.
Negative market sentiment is causing funding problems for the
internet-only retailers, known as pure plays, while traditional
retailers have been able to subsidise their on-line operations.
According to research group Forrester, 88% of all on-line retail
spending in Europe will be accounted for by traditional retailers
rather than pure plays by 2005.
