Oops. I was talking about Boo.com… got confused. Thanks JayPee for outing me on my Freudian slip.
At 01:07 PM 04/05/00 -0700, you wrote:
>I can’t remember posting anything about Foo.com to FOIB before, but I’ve
>been watching their swan dive with a grin on my face for the last 18 months.
>In the early going, FOO was positioned as high-fashion snob culture meets
>geekdom and the twentysomething prodigies who founded it, with their black
>ribbed turtleneck sweaters and oh-so-chic hipster glasses, were lauded as
>icons of generation Vest. Behind it all, though, none of them had ever
>done a startup before, let alone worked in the business, so they didn’t
>have a clue what they were doing. Without having the street sense to be
>able to separate fact from fiction, you tend to believe whatever people
>For starters, they obviously took the advice of your typical art-snob
>web-geeks who built a web site so technically complex that only the
>uber-wired could use it without crashing their browser. Stupid
>mistake. This just in… my mother has a Pentium 166. So do most of the
>rest of us.
>Next, they delayed their launch by six months for inexplicable
>reasons. Ouch! This is probably because they took the advice of a bunch
>of Andersen Consulting guys who expensed Concorde trips to New York for
>”Business Development” purposes and failed to deliver an eCommerce solution
>Third, they had basically loaded their whole ad budget into the first six
>months (as most .com companies do), so that when their launch was delayed
>they either had to pay kill fees (what you pay to radio/tv/magazines when
>you pull your ads at the last minute) or let the ads run, pointing
>potential new customers to a “coming soon” banner. Wow: Impressive
>customer conversion strategy, guys!
>Fourth, when they did launch, the honeymoon with the press was long over
>and all of the articles had moved on to slamming them for the delays and
>for their technical sins. They got virtually zero good PR, had no money to
>spend on advertising, and couldn’t generate the hype they needed to drive
>any but the most anxious of customers back to the site.
>Finally, the founders got out. Everybody got fired. The company’s culture
>was gutted. Now they’re just another failed startup, though the corona
>from this spectacular $120 million flameout is pretty impressive. That’s
>US Dollars, kids!
>Proof that a bunch of euro-trash fashion victims posing as web geeks get
>what they deserve. I love .comMunism!
> > Boo’s blues
> > By Dianne See Morrison
> > Redherring.com, May 04, 2000
> > With a name like Boo.com, it was perhaps a star-crossed company from
> > the very start. The Internet-only clothing retailer, backed by some
> > of Europe’s most prominent dot-com investors and savvy offline
> > players, is seeking a buyer after burning through its cash six months
> > after its launch.
> > Investment banks familiar with the company’s woes say Boo.com Group
> > has contacted them seeking fresh funds to survive, most likely by
> > selling itself outright. “The deal was going around to act for
> > Boo.com to help them raise more money in any shape or form, including
> > finding a buyer,” said Gerard van Hamel Platerink, an Internet
> > analyst at Salomon Smith Barney in London.
> > Boo.com declined to comment on whether the company is up for sale,
> > which was first reported today by the Wall Street Journal
> > Europe, and would not disclose its funding situation. The company put
> > a brave face in the possible problems it faces. “We’re doing quite
> > well,” said Dina Cholack, the company’s communications director, and
> > pointed to Boo.com’s $670,000 revenues for February, which she
> > indicated was “in line with our internal goals.”
> > Yet Mr. van Hamel Platerink and a source at another investment bank
> > both indicated that a sale was the most favored option. “But as far
> > as I know, none of the banks would touch it,” added Mr. van Hamel
> > Platerink. Finding a buyer for Boo.com won’t be easy, since there is
> > speculation that a staff exodus is imminent due to the current
> > problems.
> > BOO HOO
> > It’s a big setback for the company, whose investors include the
> > French millionaire Bernard Arnault, the Italian clothing company
> > Benetton (NYSE: BNG), the London-based venture fund Zouk, the U.S.
> > fund Bain Capital, as well as the U.S.-based investment banks J.P.
> > Morgan (NYSE: JPM) and Goldman Sachs (NYSE: GS). Together, they
> > ploughed a reported Â£75 million (British pounds; approximately $120
> > million) into the company since its formal launch in November 1999,
> > after many months of delays.
> > An investment bank familiar with the matter said that potential
> > buyers include Adidas-Salomon, Reebok (NYSE: RBK), and the U.S.
> > sporting goods site Fogdog (Nasdaq: FOGD). The person noted that
> > Adidas already shares an informal relationship with Boo.com: the Web
> > site’s former chief financial officer had previously come from the
> > German shoe and sports equipment maker, although has since departed
> > for a post at Chello Broadband, an Amsterdam-based Internet service
> > provider.
> > To be sure, many of Boo.com’s troubles were self-inflicted. Although
> > well-hyped, it failed to execute well. The company first formed in
> > November 1998, yet took a year to launch — for reasons the company
> > never disclosed — after a number of false starts. At launch,
> > shoppers complained that the Flash-heavy site often crashed their
> > browsers, and did not work at all on Apple (Nasdaq: AAPL) Macintosh
> > computers.
> > The launch delays themselves dealt a heavy blow. As the launch was
> > pushed back farther and farther, media spots on TV had already
> > booked, and the company had to shell out a hefty sum in kill fees,
> > according to one media buyer familiar with the situation. More
> > generally, the company’s huge marketing spend depleted its cash. It
> > went so far as to get film director Roman Coppola — the high-profile
> > music video director and son of Francis Ford Coppola — to film
> > Boo.com’s television spots.
> > In January, the site began discounting their products by 40 percent,
> > though it originally had said it would never stoop to such measures.
> > In February, its chairman and cofounder left the company. In the same
> > month, it fired 70 staff.
> > BOO SCARES EUROPE
> > However, Boo.com’s problems are a symbolic slap to the broader
> > Internet economy in Europe. On the run-up to its launch, the company
> > was regarded as an innovative and viable Internet player — an
> > example that a completely new brand could be established on the Net
> > and one that played to Europe’s traditional strength relative to the
> > U.S.: clothing fashion and design.
> > Yet it now seems likely to suffer the same fate of other suffering
> > startups in Europe’s fledgling Internet economy, such as
> > Lastminute.com (Nasdaq: LMIN) and World Online, which both have
> > failed to meet their original lofty expectations. “This is just what
> > people don’t want to hear right now,” said Mr. van Hamel Platerink.
> > “It’s just more doom and gloom for the market — maybe we should all
> > jump off a tall building right now,” he said.
> > Part of the company’s concerns might be attributed to the
> > characteristics of the market sector and Boo.com’s investors’
> > impatience. Analysts note that in the competitive fashion world,
> > retailers do not expect to make a profit until at least two years
> > after starting. And competitors saw Boo.com’s problems early on. Eva
> > Pascoe, the UK managing director of Zoom.co.uk, a fashion site owned
> > by the UK clothing group Arcadia, had already sounded Boo.com’s
> > warning bells.
> > “Fashion is a long-term business,” she said, commenting directly on
> > Boo.com’s business prospects during an interview in March. “You have
> > to be in it for the long haul, not just for the next ten minutes,
> > which is what the VCs are in it for,” Ms. Pascoe said.