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News > International
Letsbuyit finds saviour
January 25, 2001: 10:14 a.m. ET

Investment firm promises $46M, e-tailer drops bankruptcy bid
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LONDON (CNNfn) - Troubled e-tailer Letsbuyit.com bounced back from near-bankruptcy Thursday after getting a last-minute 4 million euros and a promise of more.

The U.K.-based company said it had received graphic4 million ($3.69 million) in funding commitments from a number of investors and a promise of another graphic50 million from German venture capital firm Kimvestor.

Letsbuyit CEO John Palmer told CNNfn.com that the company still planned to go ahead with its attempt to raise graphic40 million in funding from various investors.

He said the company was not committed to just one backer.

"We need to do a round of funding now. Schmitz is not the only option -- we have lots of options. We are not by any means locked into anybody," Palmer was quoted as telling Reuters.

Letsbuyit (ALBC) shares surged 162 percent to hit 63 euro cents on Frankfurt's Neuer Markt. The stock is worth a fraction of its year high of graphic6.50, which it hit on its market debut on July 21.

Palmer said the company's fourth quarter revenue reached graphic18 million, nearly double the previous quarter's. Revenue for the full year reached graphic39 million, from graphic2.2 million in 1999.

Full financial results will be released in mid-February.

Kimvestor, run by self-described "world famous hacker" Kim Schmitz, told Reuters that he expected Letsbuyit.com to return to profit in 18 months.

"The strategy will be a restructuring of the business, four offices will be closed, we will concentrate on the offices in Germany, UK and France and with the investment we are going to put in we aim to reach profitability within 18 months," he said.

Analysts were less than enthusiastic about Letsbuyit's prospects.

"They made 38 million euros in sales last year, and spent double that on marketing. They'll have to grow sales without putting any money into advertising. I'm not very hopeful," said Heidi Fitzpatrick of brokers Lehman Brothers. "They'll have to change their business model entirely to generate a return."

Schmitz has been known since his adolescence for hacking into computer networks at NASA, the Pentagon and at least one major bank.

He launched Kimvestor last January as a venture capital firm for Internet startups and is planning an initial public offering for the firm, which he values at graphic200 million, according to IPO documents.

CoShopper still interested

Norwegian Internet retailer CoShopper said it was still interested in buying

parts of Letsbuyit.

"We are still interested in doing something," CoShopper chief executive Frode Lervik was quoted as saying by Reuters.

A Dutch court had given Letsbuyit until today to come up with the funding or face a bankruptcy ruling.

The loss-making company has been looking to raise money to make up for the shortfall from its initial public offering, which only reaped about $60 million from a planned target of $180 million.

But investors' tastes for Internet retail stocks have soured after a slew of

high-profile online retailers failed last year, including pet supplies e-tailer Pets.com, fashion site Boo.com, and online price-comparison service Productopia.com

The Letsbuyit Web site, which invites buyers to pool their purchase orders to enable them to buy at discounted bulk prices, has a notice advising potential customers it is currently unable to take orders.

Senior management of the Internet retailer quit en masse earlier this month.

--ュfrom staff and wire reports graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: テつゥ 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices テつゥ S&P Dow Jones Indices LLC 2018 and/or its affiliates.