In yet another twist in what has become an e-commerce soap opera, New York-based Fashionmall.com announced Thursday that it has acquired embattled British e-tailer Boo.com. The agreement comes just as upscale e-tailer Foofoo.com revealed that it is shutting down after only a year in operation.
Fashionmall, considered a rarity in the e-commerce world for having made a profit prior to its IPO, hosts other e-tailers on its site but does not operate as a merchant itself.
The acquisition reportedly involves Boo.com’s entire Web site, including brands, trademarks and online content — but not its much-ballyhooed software that allows customers to view items in 3-D. British computing company Bright Station bought the 3-D technology earlier this week.
Fashionmall did not reveal the purchase price of the company, but Boo.com reportedly spent almost $135 million (US$) in operating expenses before investors finally pulled the plug.
“We will be working diligently over the next few weeks to position Boo as the ultimate global fashion portal — to deliver all the great things you loved about Boo,” reads a statement from Fashionmall that appears on the Boo.com Web site.
In published reports, Ben Narasin, CEO of Fashionmall, said his company plans to expand Boo.com’s retail offerings. “We are looking at Boo.com to expand what has been a U.S. fashion portal, in Europe initially and globally over time.”
Surrendering To a Volatile Market
Foofoo debuted last summer, offering content from upscale magazines and access to products from specialty e-tailers such as Sharperimage.com.
The company made its money from a percentage of sales purchased from its affiliated e-tailers. Once users had experienced the novelty of visiting Foofoo, however, many realized it was unnecessary to return, since the site was not heavy on original content and they could access most of what it offered directly.
“Foofoo is another casualty in a long list that’s growing by the day,” said Heather Dougherty, digital commerce analyst for Jupiter Communications. “There was not a whole lot of reason to go through Foofoo as an intermediary.”
Although a statement published on its Web site informed users, “Regrettably, we are closed,” some e-tailing affiliates were caught by surprise at the sudden shutdown.
E-tail Shutdowns Imminent
Boo.com and Foofoo have become high-profile symbols of how the so-called e-commerce shakeout is putting the brakes to the days of rampant over-spending and under-capitalization among e-tail sites.
Another prime example is Toysmart.com, the Disney-backed site for educational toys. Launched last year with $45 million from Disney, the site ceased operations last month. In fact, a number of other recently closed sites also had impressive backing, including Boo.com. That venture attracted such established investors as J.P. Morgan and Goldman Sachs.
“I think right now what we’re seeing is a real shift in investor confidence in dot-com companies, and that was the one thing that was holding dot-coms up for a long time,” said Seema Williams of Forrester Research.