LONDON (Brand Republic) – Share dealing in online retailer Letsbuyit.com has been suspended and the company has stopped taking orders as it attempts to raise more cash.
Letsbuyit.com’s Dutch holding company has applied to a court in the Netherlands for deferral of debt payments –- a legal move similar to the US’s Chapter 11, which protects companies from creditors as it seeks a buyer or additional financing. The company is due to meet a court-appointed lawyer today.
Letsbuyit raised €66m (£41.6m) from its flotation on the German Neuer Markt in July, but this was only about half of what it had hoped to raise. It is understood to have about €20m (£12.6m) left in the bank, and has been trying to raise a further €80m (£50.4m) in additional financing in order to remain afloat.
This could involve a strategic partnership with an established retailer. Martin Coles, Letsbuyit.com’s chief executive, said that the company was in talks with three or four interested parties. Job cuts among its 350-strong workforce are also expected.
The company made a loss of €26m (£16.3m) in the third quarter and cut 20% if its staff in August. Letsbuyit blames its problems on the disappointing flotation and on the difficult dotcom climate, which makes it hard to find additional backing.