BOO.COM DESIGNS STRATEGIES FOR REBOUND
Byline: James Fallon
LONDON — The troubled e-commerce site Boo.com believes in giving the good news with the bad.
The online retailer of activewear and athletic shoes announced a string of tenancy agreements with such leading European portals as Yahoo, Wanadoo, Freenet and Ilse, which should further raise its profile. In addition, the normally secretive Boo.com also revealed some sales data, including the fact that its normal basket value in Europe is $110 — higher than that in the U.S., although it didn’t reveal the U.S. figure.
But the bad news was that its finance director, Dean Hawkins, resigned after only two months to join another Internet startup. Hawkins is leaving to join the Dutch Internet Service Provider Chello, which is preparing an initial public offering.
His departure is a further blow to Boo.com, since he was one of the company’s highest-profile recent recruits. Hawkins, 38, joined Boo.com at the end of January from Adidas-Salomon AG, where he’d been finance director since 1996 and also responsible for its Internet strategy.
“Dean Hawkins has been offered an exciting opportunity at Chello and we are sad to see him leave Boo.com,” Ernst Malmsten, one of the company’s founders and its chief executive, said in a statement.
But Malmsten insisted that Boo.com is experiencing strong trading conditions, with fourth-quarter net revenues — excluding value-added tax, returns and discounts — of $680,000. In the month of February alone, it had net revenues of $657,000.
“These are in accordance with Boo.com’s internal targets,” Malmsten said. “Top-selling brands on the site are DKNY, Helly Hansen, Maharishi, Puma, Paul Smith and Timberland.”
But industry observers remained unimpressed with the figures. Boo.com had earlier claimed its fourth-quarter sales target was $2 million, they said. And even if the February sales rate doubles, or even triples, over the next 12 months its net revenues would still only total $15 million to $25 million a year. The amount is tiny for a site with startup capital estimated at $125 million to $200 million — and one that’s backed by high-profile investors.
Boo has signed deals including one with the pan-European youth lifestyle portal and ISP Spray, and another with cable television operator Telewest to appear as a retail partner on its new interactive shopping service.