The Dutch administrators of internet retailer LetsBuyIt.com have
announced that they are seeking to put the company into bankruptcy.
The application will be dealt with by an Amsterdam court on Friday.
The current management of the company had been hoping that a
last minute buyer would rescue it, having failed to find necessary
funding estimated at around £25 million.
There are reports that at least one creditor will oppose the
bankruptcy application on the grounds that the trustees had agreed
to give the management until 8th March to find additional
funding.
Until recently, LetsBuyIt.com operated a “co-buying” business
model. The company negotiated discounts with suppliers or
manufacturers which were proportional to the number of buyers it
could attract on its site. Items were posted for sale with a price
which reduced over a buying period as the number of users who chose
the same item increased. The investment in the company to date is
around £115 million.
The business model began to prove itself in the run up to
Christmas with the company reporting total European sales for 2000
up five-fold on sales in 1999. However, the company ran out of cash
before it could break even.
The company was founded in Sweden and is listed on the German
tech-biased Neuer Markt, although trading in its shares has been
suspended. The company was managed in London and registered in
Amsterdam.
