LONDON (Brand Republic) - Online toyshop eToys is closing down its European operations because of poor Christmas sales in the US, despite performing well over the holiday period.
Before its closure on January 19, merchandise on the UK website is being sold off at a 50% reduction. A distribution centre in Belgium will also be closed, resulting in a total of 74 job losses.
The parent company, which is based in Santa Monica, California, said that the UK subsidiary had performed well over the Christmas season, with sales more than double those of the same period in 1999.
However, in December the company warned that US sales would be below expectations and that it would run out of cash in March. The company said it had appointed Goldman Sachs to explore a merger, asset sale or restructuring options.
As well as disappointing US sales, eToys has been the victim of negative sentiment in the investor community towards dotcoms. Meetings with potential investors have not been positive so far, leaving the company with no choice but to cut costs by closing the UK site.